Aged care responds to Commission of Audit

Adjunct Professor John Kelly, Aged & Community Services Australia (ACSA) chief executive, claimed reducing duplication in all aspects of financial reporting for the aged care sector and reducing other regulatory requirements for aged care providers was “sensible” public policy.

“ACSA offered 14 areas of red tape reduction in its submission to the National Commission of Audit and we are pleased the Commission has included this in its recommendation,” Professor Kelly said.

The Commission also recommended using the full value of the principal residence in the aged care means test and implementing arrangements to allow older Australians to access equity in their principal residence to pay for part of the cost of their aged care services.

“These moves would give older Australians who are asset rich and cash poor the ability to pay for the services they require,” he said.

According to Professor Kelly, introducing a fee for aged care providers to access the accommodation bond guarantee, or the requirement for providers to take out appropriate private insurance to cover the risk of default, would add to the cost of providing aged care services, as would the termination of the Payroll Tax Supplement.

Another peak body for the aged care industry, Leading Age Services Australia (LASA), acknowledged the need for fiscal responsibility and was prepared to continue to lead the industry to work smarter and reduce red tape.

In doing this, LASA seeks a firm commitment from the federal government that Australia’s most vulnerable older Australians will be protected and receive the care and services they need to live well.

Patrick Reid, LASA chief executive, claimed LASA’s advocacy had been acknowledged with the significant move to enable older people to utilise equity in their home to offset the costs of aged care.

Alongside this, the treatment of the family home as a full asset in the means test would assist in the sustainability of aged care.

“By treating all assets the same there will be no bias towards aged care residents favouring Daily Accommodation Payments over Residential Accommodation Deposit’s (lump sum bonds),” Mr Reid said.

LASA warned government that a significant reduction in lump sum bonds would critically impact the industry’s ability to raise capital to develop more aged care beds in accord with current demand.

Longstanding advocacy surrounding red tape had been firmly acknowledged and LASA looked forward to seeing the removal of duplication and burdensome red tape that does not promote quality care or services, Mr Reid said.

Industry would need to assess the ramifications of the introduction of any requirement for providers to fund or source insurance to protect the Accommodation Bond Scheme.

With $14.2 billion held in bonds, LASA seeks an assurance that industry will play a key role in developing any new process along with any transitional arrangements.

“The removal of the payroll tax supplementation is another attack on an industry that has already borne the brunt of funding cuts (through a removal of indexation in the 2012 budget),” Mr Reid said.

“Some eight months after the federal government gave assurances on a more equitable distribution of more than $1 billion of workforce funding remains trapped in the budget process,” he added.

Specifically the Audit Commission recommends:

• Increasing the superannuation preservation age to five years below the pension age (62 by 2027)
• Changing pension indexation arrangements
• Increasing the pension age to 70 by about 2053
• Including the full value of the family home in the current aged care means test
• Introducing a single means test to the Age Pension which would include the family home above a threshold from 2027
• Private health insurance for higher income earners for basic health services instead of Medicare
• General patient $15 co-payments for all Medicare funded services; $5 for concession card holders
• Increasing the General Extended Medicare Safety Net to $4000