The ‘Caring for Older Australian’s report appears to be a hot topic for the media currently and Hal Kendig, Director of the Ageing Work and Health research unit at University of Sydney has passed comment through online current affairs publication, The Conversationalist.
For anyone previously unaware, the Productivity Commission (PC) is proposing an important set of reforms enabling us to move ahead with integrated aged care funding.
The PC is the Australian Government’s independent research and advisory body.
Since the mid 1990’s aged care people and their families have been asked to stump up the bill to pay for the capital cost of residential care for low-care units. Much of this due to politicians making it difficult for people to make capital contributions for residential accommodation.
Brendan Burwood, Managing Director ipac Financial Care said “The issue is the system doesn’t work and a significant investment is required into the aged care system in the form of work force, facilities but also financing”. He added, “There is a push for government backed reverse mortgages, the current model requires the individual remain in the home. Obviously if they are moving out into an aged care facility that is not viable”.
He added, “They are trying to create structures that don’t punish people for moving into care, removing the negative outcomes between peoples pensions benefits and the aged care system”.
so should the public sector pay for it?
The Productivity Commission this week recommended for the first time that the value of the family home should be taken into account when determining how much a person should contribute towards the cost of their aged care, as the system struggles to cope with our aging population.
However making the call regarding age care might not be the only obstacle that people have to deal with. Declining standards from within the sector, including lack of nurses, low wages and tired medical staff are causing some people to consider other options for their loved ones.
financing aged care
Under the new improved arrangements people would be given the means to be able to pay an accommodation bond, and therefore contribute their own money up to a certain amount.
The bond would then be returned to them according to how long they’ve been in care and essentially the money to cover capital costs.
People can also use is the equity within their home without having to sell it although they will have to remain mindful that the size of their estate will be smaller upon death due to the need to pay aged care.
Mr Burwood said, “I can’t see how it won’t be considered at some point, the overwhelming statistics regarding the growth in aged care needs, the government has to enable other forms of financing, it cannot keep continuing with the current system”.
“For planners it’s about new opportunities to engage with clients either through advice or product services and that is what the financial services industry is adept at doing, working with changing consumer needs”.
ipac – helping you make the right choices for aged care
Aged care is a difficult decision confronting us today. It’s an issue that can affect any one of us at any given time and we need to be as prepared as possible so that we can handle any issues that might arise before they happen, whether regarding a loved one, close family member or friend.
Moving into aged care can be both confusing and complex for those involved. Questions our advisors regularly get asked include; how much will it cost? How do I make sure that we’re receiving our maximum government entitlements. How do we make the money last and considered all the required financial options.
At ipac our advisers assist you in making the right decision for your family and their loved ones.
Our job is to help you understand how the aged care decisions you make can affect you or your relative’s financial position and how long the money will last. We can also take care of the paperwork!
If you’re interested in finding out more about our aged care services visit our website or call 1800 626 881 to speak to an adviser today.