Under landmark changes to the aged care system, more people will get to keep their home, and more people will get to stay in their home as they receive aged care.
Prime Minister Julia Gillard and the Minister for Ageing, Mark Butler, today announced a 10 year plan to reshape aged care, beginning 1 July 2012.
The Gillard Labor Government will deliver the $3.7 billion Living Longer Living Better plan to deliver more choice, easier access and better care for older Australians and their families.
To make it easier for older Australians to stay in their home while they receive care, we will:
* Increase the number of Home Care Packages- from 59,876 to almost 100,000 (99,669).
* Provide tailored care packages to people receiving home care, and new funding for dementia care.
* Cap costs, so that full pensioners pay no more than the basic fee.
To make sure more people get to keep their family home, and to prevent anyone being forced to sell their home in an emergency fire sale, we will:
* Provide more choice about how to pay for care. Instead of a bond which can cost up to $2.6 million and bears no resemblance to the actual cost of accommodation, you will be able to pay through a lump sum or a periodic payment, or a combination of both.
* Give families time to make a decision about how to pay, by introducing a cooling-off period.
* Cap care costs, with nobody paying more than $25,000 a year and no more than $60,000 over a lifetime.
For the first time, we will also introduce fairness into the payment system. Right now, pensioners often pay more than people with hundreds of thousands of dollars in assets and a private income. As a result, pensioners are subsidising the accommodation and care costs of millionaires.
From now on the system will be fairer, based on capacity to pay. The amount you pay for aged care services will be capped and underpinned by tightened means testing, meaning older Australians will not be forced into a fire sale of the family home in order to get access to aged care.
This will not affect the million people already in the system, who will not pay a cent more than they would have under the current arrangements.
To ensure there are immediate improvements as well, the government will also:
· Increase residential aged care places from 191,522 to 221,103
· Fund $1.2 billion to improve the aged care workforce through a Workforce Compact.
* Provide more funding for dementia care in aged care, and more support for services.
* Establish a single gateway to all aged care services, to make them easier to access and navigate.
* Set stricter standards, with greater oversight of aged care.
This package reflects in large part what older Australians, their families and carers, and aged care providers have told us is wrong with the system, along with the valuable input of the Productivity Commission report, Caring for Older Australians.
These reforms will enable older Australians to get the help they both need and deserve so they can remain living in their own homes for as long as possible. Labor's plan will help older Australians keep their own home for as long as they want.
They replace an aged care system designed a quarter of a century ago and which is now ill-equipped to meet the needs of retiring baby boomers and their parents who are living longer and healthier lives.
Implementation of the reforms will be overseen by a new Aged Care Reform Implementation Council. The new reform package will be implemented in stages to enable providers and consumers to gain early benefits of key changes and have time to adapt and plan for further reform over the 10 years.
Further details:
Under Living Longer Living Better the Gillard Government will invest:
* $1.9 billion to deliver better access to aged care services;
* $1.2 billion over five years to tackle critical shortages in the aged care workforce;
* $80.2 million to improve aged care linkages with the health system;
* $54.8 million to support carers;
* $268.4 million to tackle the nation's dementia epidemic;
* $192 million to support the diverse care of Australia's ageing population.
Home care
Older Australians want to receive care in their own home. Over the next five years, the number of operational Home Care packages will increase from 59,876 to 99,669. This will mean less waiting time for people who need care.
Under new means-testing arrangements for Home Care packages, which will start from 1 July 2014, a consistent income test will be introduced. This will ensure that people of similar means pay similar fees - regardless of where they live - with safeguards for those who can least afford to pay.
The means test will not include the family home, which remains exempt.
People currently receiving a Home Care package will not be subject to the new arrangements while their current care continues.
In addition, to protect care recipients with higher than average care needs, an indexed annual cap of $5,000 for single people on income less than $43,000, and on a sliding scale of up to $10,000 for self funded retirees, will apply to care fees. A lifetime care fee cap of $60,000 will be introduced.
Residential care
From 1 July 2014, the maximum accommodation supplement that the Government pays to aged care providers when people are unable to meet the cost of their accommodation will be increased from $32.58 to around $52.84 per day. This will help more aged care homes to be built or refurbished.
As a result, we expect aged care places to increase from 191,522 to 221,103.
At the same time, we will give older Australians more choice about how to pay for their care, ensuring no-one is forced into an emergency fire sale.
Residents can pay for their accommodation in a lump sum, periodically, or a combination of both. A new cooling off period will mean that residents will not need to decide how they are going to pay until they have actually entered care.
From 1 July 2014, residential care means testing will be strengthened and improved. The current income and assets tests will be combined. This will address the unfair situation that results in asset-rich, income-poor residents paying for all of their accommodation and nothing for care, and income-rich, asset-poor residents who pay for their care but not for accommodation.
As with Home Care, the treatment of the family home will not change from current arrangements.
An annual cap of $25,000 and a lifetime cap of $60,000 will apply to care fees.
Support will continue to be provided to ensure homes in regional, rural and remote Australia are viable, and that people with greatest need, such as Indigenous Australians and homeless people, are looked after.
Building the workforce
The Government is tackling critical shortages in the aged care workforce by allocating $1.2 billion over five years to attract, retain and train aged care workers - and to ensure that they receive competitive wages through a Workforce Compact between government, unions and aged care providers.
Building a gateway to aged care services
A new My Aged Care website and national call centre will be established from 2013 - the first step in building the Aged Care Gateway, an online integrated information and assessment entry point. The website will include an innovative ratings system of aged care homes.
Tackling dementia
Nearly a million Australians are estimated to have dementia by 2050.
The Government is making significant investments to better support people, families and carers living with dementia. A new Dementia Supplement will provide financial assistance of $164.3 million to people receiving Home Care packages and in residential care.
There will be increased support for primary health care providers to undertake more timely dementia diagnosis, and a stronger focus on people with younger onset dementia.