One of the key themes we’ve picked up over the last few days of the Royal Commission’s hearings into funding, financing and prudential regulation, has been this idea that individuals need to contribute more to the cost of their own care.
The comments from Mike Callaghan, former Chair of the Aged Care Financing Authority, encapsulated this in his appearance before the Commissioners last week.
“There’s very large growth in inheritances,” he said.
“To me, part of it is instead of that growth in inheritances, people should be using the assets, when they have them, they should be using more of those assets to fund the range of goods and services that they need.”
These comments take us back to August’s hearing where Senior Counsel Assisting Richard Knowles QC said there was a need for people to start thinking earlier about how their homes will meet their future needs as they aged.
“People should plan ahead,” he stated.
“But that requires there to be available alternatives that better meet their future needs. It also requires greater public awareness of those alternatives.”
Retirement villages provide one such option
The Commission’s 7th Research Paper, Models of Integrated Care, Health and Housing, which you can find here, positions retirement villages as the way to fill this need.
“We suggest there are advantages to the Commonwealth recommitting itself to promoting and supporting alternative accommodation options for low-income older people in the aged care system. Retirement villages present one possible option,” the report says.
“Residents of these facilities often enjoy a sense of community, as well as higher levels of support, compared to living at home.”
The Royal Commission’s Final Report is due to be complete in February.
What’s becoming increasingly clear is the recommendations, whether they’re adopted by the Government or not, will provide opportunities for retirement community operators to step in, provide innovative solutions and profit.
Whether the industry seizes these opportunities, is another question.