ABC Radio National Drive with Waleed Aly
E & OE
ALY:
Australians going into aged care from tomorrow could be paying more than they otherwise would have. There has been a lot of attention on new recommendations to the welfare system that could juristically reduce the number of payments, but certainly streamline them. But there has been a lot less discussion on significant changes that are going to happen in aged care. They come in affect tomorrow. To tell us more about this I’m joined now by Mitch Fifield, who is the Assistant Minister for Social Services and also the Manager of Government Business in the Senate. Mitch Fifield thank you very much for joining us.
FIFIELD:
Good evening Waleed.
ALY:
Let me get this right. If you have assets, so it’s not just income or cash, but assets that are under $45,000 then the Government supports you entirely in your aged care, but once its above that you get reduced funding, is that the way it works?
FIFIELD:
In essence, but there are different arrangements for accommodation and different arrangements for care. And one of the changes taking place from tomorrow is that there will be a combined means test looking at both assets and income. At the moment your assets are only taken into account for accommodation and your income is only taken into account for care. So you can have people at the moment with high assets who mightn’t pay much for care. And people with high income who mightn’t pay much for accommodation.
ALY:
I’m more interested though in those who don’t have huge numbers of assets, but have enough to get above the $40,000 threshold, maybe say $100,000 of assets which is barely anything, certainly not enough to support themselves. What sort of position will they be in?
FIFIELD:
Well, the new arrangements will see people who have low means in not a bad situation in terms of what they have to pay in terms of care fees and what they have to pay in terms of accommodation. If you move to people of moderate means and higher means, then they will be paying more.
ALY:
Right, but let’s do a more specific case study. Someone who’s got $100,000 worth of assets. They are going to have to pay more to access aged care than they otherwise would have even though they have pretty poor assets.
FIFIELD:
Waleed, I always hesitate to take a particular dollar figure, a particular amount, because you do need to look at what someone’s assets are. And you also need to look at what someone’s income is, and the interaction there. So I always hesitate and recommend that, from tomorrow, people go the My Aged Care website. That they look at the fee estimator. Where they can plug in their income. They can plug in their assets. And see what they’re likely to be liable to pay.
ALY:
But I would have thoughts it’s a fairly straight yes, no question. I mean if someone is receiving low income or no income at the moment, that’s all that’s tested. But if they happen to have a modest amount of assets suddenly that will affect how much they have to pay and it means they have to pay more. Or the shortfall in funding has to be born by whoever is providing the aged care. Is that not necessarily the case?
FIFIELD:
Looking at each element, everyone will be required to pay a basic daily fee, set at 85% of the age pension. If they can afford to do so, then they may be asked to pay a further means-tested care fee. That’s on the care side of things. When it comes to accommodation, people have the option of either paying a lump sum or a daily payment, or a combination of the two.
ALY:
But doesn’t removing that distinction also mean that people who want low care will end up having to pay for high care even if they’re not using it?
FIFIELD:
No, because the aged care funding instrument looks at what the circumstances are for an individual in terms of their care needs.
ALY:
What sort of impact is this going to have within aged care? Because there are reports emerging already of people having to remain in hospital because there are people having to remain in hospital because their isn’t an aged care bed available for them.
FIFIELD:
Well, it’s ultimately up to an aged care provider if they take a person into any particular facility. There are many reasons why someone might be continuing in a hospital setting. It might be that there isn’t an aged care place in the region at a price that suits their particular needs. So there can be a range of reasons. And it varies from state to state. But we have just announced a new aged care funding round where aged care providers can make application for additional places. But I think one of the important things to recognise is that only about 5 per cent of Australians over the age of 65 are actually in a residential aged care setting. Most Australians would prefer to have their aged care support provided at home. That’s one of the reasons why over the next ten years we’re going to be offering 80,000 additional home care places. Because increasingly people want to receive their support at home.
ALY:
But it’s about who wouldn’t get it I suppose. Let me pick you up on that because you say residential aged care facilities, it’ll be their choice as to who they take on, and that’s true. But if suddenly people are going to be asset tested and they’re relatively asset poor, they have no income, but because they have enough assets that that’s going to become part of their overall means testing. These sort of facilities are going to really reluctant to take those people sort of in the middle class I guess. You don’t have huge numbers of assets but have enough to get rid of a little bit of Government support. They’d be reluctant to take them on aren’t they? I mean isn’t it necessarily the outcome of this?
FIFIELD:
Part of the changes are that there is a legislated period of choice. Someone moving into an aged care facility will have 28 days in which to choose whether they want to pay by a way of a daily fee. Whether they want to pay a lump sum. Or a combination of the two. That choice is there and its legislated for people.
ALY:
Alright but I come back to my example. I’ve got $100,000 of assets I don’t have an income. That aged care facility is going to look at that and say, you know what? You’re ultimately not able to pay and because your not getting enough government support, you’re not getting the government support you used to. It’s just not viable. These people are going to be left without aged care.
FIFIELD:
I don’t think that’s the case. There will always be, as there is now, a safety net. Whereby people who don’t have the means, who aren’t able to pay an additional means-tested care fee, or people who don’t have the means in terms of accommodation payments, that they will have significant taxpayer funded support. So that’s there now. That will continue. It’s important that people who do have the capacity, who do have the means to do so, make a contribution to their care, make a contribution to their accommodation. But it’s also important that there is a safety net. That’s there now and that will continue under the new arrangements. It’s also important to recognise that the 1 July changes only apply to people coming into aged care from 1 July.
ALY:
Just before I let you go. In your capacity as the Manager of Government Business in the Senate. What are you going to do about this carbon tax situation? Clive Palmer has come out today and said that his Senators in tin this state will not be in the Senate supporting the repeal of the carbon tax unless there is something there guaranteeing that the savings to do with the carbon tax are passed on, not just to consumers, individual consumers, but also to power users, companies effectively. Is that going to happen?
FIFIELD:
We’ll, I’m a legislative optimist, Waleed. You can be a legislative pessimist or a legislative optimist. I’m an optimist. I guess that’s what I’m paid to be as Manager of Government Business in the Senate. If you look at past history, who would have thought we would have got the Goods and Services Tax and the new tax system through the Parliament, but with the Australian Democrats we did. Who would have thought that we would’ve got the partial sale of Telstra through the Senate but, with Brian Harradine, we did. You can’t really know what the full dynamics of the Senate will be until it’s there and in place. I’m confident that, ultimately, we will get the repeal of the carbon tax through the Parliament.
ALY:
Alright, thank you very much for your time Mitch Fifield. The Assistant Minister for Social Services and Manager of Government Business in the Senate.