Aged care funding is a big issue for the federal government. Photo: Rob Homer Share of household net wealth by quintile: Western Australia, 2013-14.
The “old old” cohort is one with complex health needs, and as society changes they are increasingly single people with less family support. Photo: File image
Even the cheapest of aged care beds are out of reach for 60 per cent of West Australians, says the head of one of WA’s leading community service providers.
Meanwhile the industry is in funding limbo and is facing increasing demands as New Years looms, a time so many Australians transition into aged care it is referred to as aged care season.
Bankwest Curtin Economics Centre’s recent annual report showed the wealthiest 20 per cent of West Australians hold two-thirds of the country’s total net household wealth.
The poorest 60 per cent hold just 16 per cent of the wealth.
Sue Ash, chief executive of community service organisation UnitingCareWest, said they lacked the assets to afford even the cheapest of aged care beds at $350,000.
She said the wealth breakdown of the richest 20 per cent clearly showed the impact of real estate, business and superannuation policy levers.
It was important to recognise the policy levers affecting the poorest 60 per cent, including the gender pay gap, casualised work and continuous uncertainty in the aged care sector.
Among those the most at risk were women, she said.
They had not had much time to build superannuation, since compulsory contributions were only introduced in 1992.
They had historically worked part time, which did not provide for wealth accumulation.
These compounded a significant gender pay gap that was consistently higher in WA than elsewhere.
People had not had time to adjust their planning for old age, especially given dramatic changes in the sector including assets tests, cost hikes and high care bed payment systems.
“All those things are changing each year and in some cases each six months,” she said.
“It takes a long time to change and accumulate family assets but policy changes occur very fast and it makes people vulnerable.”
She said the system had once had a lot of public aged care available as a safety net, but while the government was still paying a lot, it was moving towards a user-pays system.
The aged care system, designed for 70-80-year-olds, was also struggling to adapt for a “second generation” of elderly people, the 85-plus cohort now nicknamed “old old”.
In 1964, 0.4 per cent of the population was over 85. In 2014, it was 1.9 per cent. By 2064, it is projected to be five per cent of the population.
“Three per cent of the population is living past 100. Their capacity and need for services are quite different,” Ms Ash said.
“Our community service response is designed for old policy settings, old demographics and economic settings.
“If we are going into a user-pays system, we have to do something.”
User-pays reforms called “consumer directed care” begin to rollout in February 2017. They are meant to empower consumers to make decisions about who they want delivering their care, and to stay at home longer.
Personal wealth will be increasingly important under the open market system, though “safety nets” and nursing homes for the sick will continue, says Vaughan Harding, chief executive of not-for-profit Juniper which dominates the WA sector.
“Our system is still very generous compared to the United States or United Kingdom. But increasingly the service recipient will be asked to pay more,” he said.
“There are issues. A person’s home – often described as the family home – is part of the assets test of a person’s capacity to pay. But younger people see that as the family asset.
“The question is, what can our country afford? We know we can’t afford to continue the way we have.”
He said the “old old” age group was growing four times faster than the rest of the population and had complex health needs placing huge demand on the health system.
Social changes meant more single people coming through than ever before, people without children or family support, and the system would bear the brunt.
In this environment, the federal government’s Budget announcement that it would seek to cut more than $1.2 billion from the aged care funding instrument over four years came as a shock.
Aged and Community Services Australia said in a public statement that this would decrease annual funding per resident by $6655, placing “incredible strain on a sector already under significant pressure”.
Mr Harding said the cuts had targeted complex health care and this was not a good way forward, considering up to $1500 per day for hospital care dwarfed the $211 a day aged care cost.
“That growth group, that old-old 85-plus group, have complex health care needs and if we don’t look after them in aged care, they will fall back to even more expensive hospital care,” he said.
“We need a predictable, sustainable funding system to deal with an ageing society and the industry needs to trust in this to invest the billions required to create the system.
“We are a fair society and want to make sure people without financial means can access a bed when they need one.”
The government has now agreed to negotiate with the sector with the hope of finding other ways to save and discussions are continuing. Follow WAtoday on Twitter
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