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COTA, LASA lukewarm on Budget

Medicare co-payment, changes to pension and aged-care payroll tax biggest gripes.

“Measures in the budget simply tinker around the edges without putting in place any sustainable measures to plan for the demographic change,” seniors advocate Ian Yates has said.

In the Budget speech, federal Treasurer Joe Hockey said people should “celebrate the fact that Australians are living longer but we must prepare for the adjustments in our society”.

However, Yates, the CEO of COTA Australia, said despite the treasurer’s apparent public anxiety about the impact of an ageing population, the Budget has no real strategy to address it.

The Budget announcements garnered mixed reaction from the industry. Big topics included co-payments, changes to the age pension and the redirection of the workforce supplement.

The industry did welcome initiatives such as Restart, which will provide incentives for businesses to employ older workers, and the announcement of the Young Carer Bursary program.

However, there were several concerns.

Co-payment not popular

Many believe the introduction of the $7 co-payment, along with an 80¢ rise in prescription charges for pensioners, could put basic healthcare out of reach for many seniors.

The CEO of the Australian Healthcare and Hospitals Association, Alison Verhoeven, called for implementing systems that improve access to healthcare for those most in need, rather than creating more barriers.

“Australians already have high out-of-pocket expenses for medical care and many avoid or delay medical care due to cost,” she said. “Evidence from numerous sources shows that the elderly and those with chronic disease are hit hardest by co-payments, resulting in them delaying or avoiding seeking care.”

Yates agreed; he said the move was counterintuitive and would probably cost the government more in the long term.

“Conditions that may have been easily treated in the early stage will worsen and put pressure on the more intensive and expensive end of the healthcare system – hospital care and surgery,” he said. “Older people are, in fact, being hit with a triple whammy as large users of healthcare and medicines – getting slugged for visiting a doctor, for having a blood test and then for filling their prescriptions.”

Changes to pension

Asset and associated income test thresholds for the pension will be indexed between now and 2017, but then remain at fixed levels for three years, Hockey announced.

Also, building on the move by the previous government, the retirement age will be lifted to 70 by 2035.

“With these changes, pensions will always increase with the cost of living, and the value of the pension will continue to rise, but the system will be much better placed to meet the challenge of a significant increase in demand,” Hockey said.

However, older people will see changes to the indexing of the aged pension as an attack on their quality of life, Yates said, whilst stating that pensioners would be $100 a week worse off in a decade.

“This is a massive cut to the income of older people who simply can’t afford to absorb it,” he said.

Workforce supplement redirected, payroll tax supplement cut

Leading Age Services Australia CEO Patrick Reid had mixed reactions to the Budget.

He welcomed the redistribution of the $1.5 billion workforce supplement, which will now be directed into the general aged-care funding pool and will include a 2.4 per cent increase in funding for residential aged-care facilities.

However, he raised concerns about the removal of the aged-care payroll tax supplement, which will mean a cut of just over $650 million and, he said, will “directly erode capacity for providers to deliver frontline care services to older Australians”.

“It is of considerable concern that the government has implemented this measure without consulting industry regarding what we understand to be a significant impact,” he said. “While Treasurer Hockey says it is ‘now our turn to contribute, our turn to build’, as potentially the highest growth industry, aged care providers say now is not the time to compromise its capacity to serve Australia’s most vulnerable.”

Yates is also concerned with the axing of the tax, suggesting providers might pass on the cut to consumers in higher accommodation charges.

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