While Prime Minister Anthony Albanese has ruled out changes to the treatment of the family home in means testing, there are other options the Government could consider for increasing consumer contributions to make aged care funding fairer and more equitable.
Leading aged care accountants StewartBrown have been advocating for changes to consumer contributions as far back as 2020. We have been advocating for the changes too through Plan B.
Possible measures to increase consumer contributions - that don't include the family home - include:
- Deregulating the everyday living charge by lifting the minimum cap to $80 per resident per day, covering the actual cost plus a small margin.
- Removing the annual and lifetime caps on Means Tested Care Fee.
- Increasing the Maximum Permissible Interest Rate (MPIR) on aged care accommodation to a ‘rental’ rate. The MPIR currently sits at 8.38%, and ideally would stay above 8%.
- Lifting the current $550,000 on Refundable Accommodation Deposits (RADs) as recommended by David Tune in his 2017 Aged Care Legislated Review.
- There are also the options for providers to charge for additional services, for example, an extra $20 for entertainment and dining options, or extra services, such as higher standard meals or quality linen.
- Implement a deferred rental component on RADs.
The Aged Care Taskforce was established to explore ways to make funding fairer and more equitable.
No doubt some of the measures above will make an appearance in the Taskforce's Final Report when it is finally released - even if changes to the treatment of the family home in means testing is not.