Who should pay for aged care?

The sensitive question about who should pay for aged care continues to perplex governments, providers and consumers alike.

A recent discussion paper by the University of Technology Sydney Ageing Research Collaborative (UARC), reopened the debate. One approach put forward by UARC is to require consumers who have the capacity to pay to make fair contributions to the costs of their services, challenging the traditional notion that the government fund this expense.

The UARC paper highlights the stress that the aged care system has been under, noting that ‘a sustainable aged care system is crucial to current and future senior Australians and their families’.

The final report of the Royal Commission into Aged Care Quality and Safety outlined systemic issues within the aged care sector over the last 20 years, recognising that funding has seriously lagged behind the rising costs of care by almost 50%. The recommendations were clear that additional funding is required.

The Commission also recommended that individuals receiving residential aged care should not be required to contribute to the costs of the care component of the support that they receive, as well as prescribing minimum staff time, increased remuneration and minimum qualifications and registration of personal care workers.

With an ageing population, the long-term sustainability of the sector was also reviewed by the Royal Commission, proposing to introduce or at least investigate an aged care levy. This was rejected by the previous government.

With the recent announcement of an increase in the minimum wage by 5.2% and a 4.6% in the modern award, providers will be under more pressure. There has been a tendency of government to only pass on a portion of wage increases, leaving the sector to determine how it funds the increase in costs.

Aged & Community Care Providers Association (ACCPA), the new peak body representing aged care providers, welcomed the Fair Work Commission’s decision increase the wages of lower paid workers, but warned that urgent government action on appropriate indexation of Commonwealth funding was critical.

We must address this issue sooner rather than later, to ensure that older people receive the high-quality care that they deserve. It is time to show we care about aged care.

Opinion piece by Darren Birbeck,
Chief Executive Officer,
Resthaven Incorporated