The Royal Commission has recently released a Consultation Paper to discuss options into the future of Aged Care funding in Australia.
The problem in a nutshell: Financing Aged Care presently is sufficiently managed, however Australia’s population is an ageing population. Naturally, this is going to increase pressure on Aged Care spending budgets. Therefore, a sustainable method of Aged care funding needs to be sourced and implemented for the future.
The Commissioners commented that, “The aged care system needs a secure and sustainable source of funding now and into the future. Australians in need of aged care must have the certainty that their future is secure and that there will be the funds available to ensure that their need for quality aged care will be met when called upon. We must therefore have in place a secure, predictable and appropriate funding mechanism for those long term future needs”
The Royal Commission is inquiring into and aiming to make recommendations on how the Australian Government and community can strengthen the system of Aged care and can best deliver Aged Care in a viable way. This will mean exploring ideas such as funding models used in other countries and engaging in debate or discussion of introducing social insurance schemes or using private insurance companies. Ultimately, the goal is refining current models of Aged Care funding into something new and improved.
“At the moment, aged care is paid for through a mix of pay-as-you-go public funding, sourced through the general taxation system, private contributions in the form of means tested fees and co-payments for certain services, and public and private capital financing” – Australian Government contributes near 75%.
Below is an example specifically looking at Allied Health funding for the elderly. The two main categories are: Living in the community – accessing Commonwealth Home Support Programmes & Home Care Packages and Living in Aged Care Facility – Residential Aged Care.
Living in Community— Commonwealth Home Support Programme and Home Care Packages
- Partly funded by Australian government, and significantly funded by out-of-pocket expenses and private health insurance. Partly funded by Australian Government through the aged care system, with some co-contributions and income testing in Home Care Packages.
Living in Aged Care Facility— Residential Aged Care
- Mainly funded by Australian Government through the health care system with some co-contributions. Partly funded by Australian Government through the aged care system, with some co-contributions (means tested care fee) and additional fees.
What remains to be seen however, is the Final Report by the Royal Commission. The report will give a clearer picture of what changes to Aged Care in Australia can be expected in the near future.
Author: Amol Londhe