Henry Tax Review’s proposed aged care changes
The Henry review has supported radical changes in the financing of aged care, calling for consumers with the means to pay more and for greater personal choice of services.
Mark Metherell has reported in the Sydney Morning Herald that the review’s report questions why, at a time of growing cost to taxpayers, the aged-care system subsidises the accommodation costs for people who could afford to pay for their everyday living costs.
People in nursing homes “should generally pay for accommodation and living costs provided through aged care with user charges equal to the cost of their provision, as these costs are personal responsibilities outside the aged-care system,” the report said.
It also pointed to the possibility of big changes to the private health sector, saying that in the light of earlier reform proposals, tax arrangements for private health insurance and the Medicare levy surcharge needed to be assessed in the light of a review of the sector.
The Government’s proposal to means test the 30% health insurance has been blocked by the opposition. The review warned that means testing risked inaccurate assessments of income and could lead to debts.
If the government wanted to increase fairness and sustainability of health insurance subsidies, it could consider other ways of limiting the subsidy, which now costs taxpayers $4 billion a year.
Alternatives could be to limit the type of eligible policies or capping the value of subsidies paid.
