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Re-orienting the system

The PC has done a great job of drawing together the main threads of reform discussion over recent years, writes Ian Yates.

The draft presents a coherent and integrated way forward that re-orients the system around the consumer and entitlement, within a sustainable funding framework.

However, it is important to remind people that this is a draft, on which the commission is genuinely seeking significantly further substantive input.

There are a number of areas in which the PC itself indicated it wants more views, including on models of care and the detailed operation of the gateway, implementation and transition arrangements, and the user contributions framework.

Compared to other reports of recent years this is the first to redesign the basic architecture of aged care, which has remained unchanged since the mid 1980s.

Among the aspects we particularly like is the consumer the focus, the freeing up of funding and service systems so support and care can be designed around the needs and circumstances of the consumers, and the separation of the funding of care from accommodation and living expenses.

We also like the gateway approach, which will streamline access to high quality information and assessment, and the proposal for nationally consistent user charges based on fair and equitable principles, which we don’t have now.

That being said, COTA believes all aspects of the user contribution proposals need further discussion and review, including the level of the income and assets tests, the percentages of care costs and the safety net arrangements; to consider their practical implications.

It is vital to see what the proposals will mean in practice for people in a wide variety of situations. It is fundamental to COTA that no-one is denied equitable access to care and support because of insufficient means.

Separate to care the Commission recommends that people should be responsible for their own accommodation costs as they have been all their lives, with safety nets for those who do not have the means.

There has been some negative publicity around the idea of people paying bonds to access residential aged care. We need to get a few facts right about this. The reforms will mean many more people will get to be cared for at home with much better packages of service and no bond. People have paid bonds to access residential care (hostels) since the early 1980s and ‘extra- service’ high residential care for the last 13 years. A bond is just a loan – your estate gets it back. The loan is used to fund buildings and, because loans aren’t allowed in standard high care, not enough high care is being built. The PC recommends limits on the amount of bonds – they are currently uncapped. You don’t have to pay a bond, you can pay a daily charge, or some mix of these. The proposed equity release scheme will mean you can borrow against the value of your home if you wish, rather than sell it. And, finally, if you sell your house the money left over after the loan is paid can go into an indexed government bond and be exempt from the pension income and assets tests.

Further, both the proposed government equity release scheme and the “pensioner bonds” are imaginative responses.

It is a draft report so it needs to be approached in that vein. From COTA’s viewpoint its real weakness is that it does not sell forcefully and clearly enough what it is about. For example, it is not obvious to many readers that its recommendations lay the foundations for a much better community care system. Similarly the unions have criticised the report for not being strong enough on better wages, whereas the commission has said clearly that the wages gap between aged care and other sectors is a major issue and is unsustainable.

Ian Yates is CEO of the Council on the Ageing (COTA)

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