Ageing to pay more for nursing home care

Mark Metherell -Apr 12, 2012

The Gillard government is looking at measures to soften the pain of big changes to aged care financing that will mean more elderly Australians will have to draw on the value of the family home to pay for care.

Under consideration are believed to be a range of options, including subsidised equity release schemes that would enable people to retain more of the original value of their homes than would be the case with existing schemes such as reverse mortgages.

The government has signalled it wants to widen the obligations on people with the means to pay for their care but also moderate the soaring cost of bonds, now averaging $264,000, imposed on residents in low-care nursing homes.

The Ageing Minister, Mark Butler, who has criticised the ''forced fire sales'' confronting people urgently needing a nursing home bed, yesterday confirmed the government was looking at home equity release schemes as a way of financing greater user payment of aged care.

Changes were needed to meet ''an extraordinary shift'' in demand facing Australia from the looming surge in ageing baby boomers.

Mr Butler said the schemes proposed by the Productivity Commission last year were ''very substantial … but what I have said is that any of those recommendations are better than the current system.

''Almost 40 per cent of residents in aged care homes now have had to pay a bond … to get there.''

The government now has the backing of most aged care organisations for radical user-pays reforms.

The National Aged Care Alliance, representing 28 organisations, appealed yesterday for the government to announce reform in next month's budget, warning the system faced ''collapse'' without more secure funding to ensure every aged Australian had a secure entitlement to aged care in their home or in a nursing home.

The chief executive of the Council on the Ageing, Ian Yates, said the system was struggling to cope with changes which now meant there were often ''appalling'' delays for people to get services so they could remain at home, because of the dominance of nursing home care.

Catholic Health Australia's chief executive Martin Laverty said the current system meant that only one in five of those getting care could remain in their own home. Yet people who had sold their houses for millions of dollars could get high level nursing home care for the regulated accommodation charge of $32 a day.

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