With four weeks to the May Budget, the independent think tank has released its wish list of measures to fix the black hole in the Budget – and a fairer aged care system is at the top of the list.
The 58-page ‘Back in black? A menu of measures to repair the budget’ report outlines a number of recommendations aimed at relieving pressure on the country’s structural debt, which it forecasts will be close to $70 billion by the end of the decade – including counting more of the family home in the means test for residential aged care.
Its reasoning for this is simple.
“The current means test for residential aged care support incorporates only the first $193,219 of the aged care resident’s home, and only when there are no remaining protected residents such as a spouse or dependent children still living in the family home,” it states.
Compare this to New Zealand, where the family home threshold is $250,000.
The means test could include the full value of the home or its value above a threshold, the report notes. Residents could draw down on the equity in the home to pay for extra aged care costs, via the Home Equity Access Scheme, if they didn’t want to sell. This option could also be available to people accessing home care.
“In the longer term, more substantial reforms – such as recouping the cost of aged care from people’s estates (again while maintaining a generous buffer) – may be needed to ensure that funding for quality aged care services is sustainable,” the report adds.
In short, the report backs Plan B – or a greater contribution to the costs of aged care services by those who can afford to pay.
Why?
Because this would not only relieve pressure on the Budget, but it would deliver a fairer system for all Australians.
With aged care spending expected to rise – the report forecasts the soon-to-start 15% wage increase for aged care workers will cost an estimated $2.3 billion a year – and the taxpayer base continuing to narrow, the aged care bill will fall disproportionately on younger Australians and working families.
Is that what their parents and grandparents want? We think not.
With the countdown to the May Budget on, this is a conversation where we should all be making our voices heard.