O'Donnell Kerr Financial Planners
  • 10 March, 2021

Aged Care Royal Commission - what can we expect?

In October 2018, the government established a Royal Commission to examine the state of Aged Care in Australia.

After receiving more than 10,500 submissions and listening to testimony from 640 witnesses, the two Commissioners - Tony Pagone QC and Lynelle Briggs AO - delivered their final report, Care, Dignity and Respect to the government on 26 February 2021.

The report is very comprehensive and extends to five volumes. And, if you consider the extended volumes three and four, you could take the count to eight.

If you are interested in reading any of the report, I would recommend volume one - the Summary and Recommendations - which is a brief 340 pages.

So, what is in the report?

A total of 148 recommendations have been made by the Commissioners. It’s important to be aware that there is some disagreement between the Commissioners on a number of the recommendations that have been made.

Several of the more important recommendations can be best summarised as: .

  1. Establish a new Aged Care system and structure, including a new Aged Care Act, which is more resident-centric.

  2. Introduce new quality standards and star rating system with greater obligations on the general duties of providers.

  3. Develop a skilled workforce with better training, qualification requirements and improved remuneration.

  4. Introduce a minimum level of staffing which directly relates to the number of residents in an aged care home.

  5. A universal entitlement to an integrated program of aged care based on needs rather than availability.

  6. Improved access to aged care services in regional, rural, and remote areas.

There was also a recommendation which was widely reported in the media about the introduction of a specific aged care tax levy similar to the Medicare levy. I understand that in the last week the Treasurer has stated that the government was not in favour of this proposal.

Another interesting recommendation with regard to funding was the phasing out of the Refundable Accommodation Deposits by July 2025. To ensure that providers are not left with a substantial budget shortfall because of this recommendation, the government would establish an Aged Care Accommodation Capital Facility to provide the necessary capital.

The current means test which is used to calculate a residents ongoing Means Tested Care Fee would also be reviewed. The recommendation does appear to suggest that if a person is in receipt of an Age Pension or a Service Pension, they would not be subject to this fee. This is certainly different to the current means test.

Recommendation 145 asks that by the 31 May 2021 the Australian Government prepare a response to each of the 148 recommendations, stating which are to be accepted and which are to be rejected and giving the reasons why. I am sure that you would agree that this is an extremely short and ambitious time frame.

The government will present its 2021/2022 Budget on 11 May. At this stage it is too early to say whether any of the recommendations to change funding or on the calculation of ongoing fees will be mentioned in the budget. Whatever recommendations are accepted or rejected, the ongoing cost to the Australian community will be substantial and the means of funding this cost will be a difficult issue for not only this government but for future governments.

However, the care of our elderly is a true reflection on our society. I believe that most of the care that is provided in our residential aged care facility is very good, but there is always opportunities to improve and there are isolated of instances of abuse which underline the need for change.

We all need to now understand that caring for our aged and infirm with care, dignity and respect is expensive and as a society we need to be prepared to fund the costs. Whether we are seeking ways to self-fund, or support those who are unable to meet the costs, we need to have a system in place to provides quality care for all in need.

When mum or dad need to enter aged care, we should be confident that they are receiving the best possible care that is available. . Let us hope that, whatever recommendations are accepted and implemented, that we see changes for the better for our current and future aged care residents.

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