ABC Broken Hill Mornings with Julie Clift
E & OE
FIFIELD:
The most significant change is that there will be more choice for consumers as to how they pay for their care, and how they pay for their accommodation. At the moment, if you are in low care, you can pay by way of a bond or a fee. But if you are in high care, the option of a bond isn’t there. So what the changes of 1 July do is remove the distinction between high and low care. So consumers will have a choice as to whether they want to pay a daily fee, whether they want to pay a bond, or whether they want to pay a combination of both. And I think importantly, they’ll have 28 days from when they move into aged care to make that choice, to seek the advice that they need to make sure that they make the choice that’s right for them.
There are also some changes in the way that the assets test and income tests are applied for care arrangements. At the moment, there’s an asset test for accommodation, and there’s an income test for care. What there will be in the future is a combined means test to work out what’s an appropriate contribution for someone to pay for their care. So there are two sides of it; there’s the care arrangements and there’s the accommodation arrangements.
CLIFT:
If we talk about the care arrangements, because that seems to be what people are perhaps most concerned about – the means testing – could you explain that a little more fully for us?
FIFIELD:
There are really two elements to care. The first is what’s called the basic fee. This covers living costs such as meals, power, laundry – those sorts of things. And that’s set at 85% of the single person rate of the age pension. That is essentially how things are at the moment. And there are hardship provisions in relation to that basic fee.
What will be different is that there will also be a means-tested care fee. This is an additional contribution towards the cost of care that people might be required to pay. And there are – I think importantly – annual and lifetime caps on what people can be required to pay. There’s an annual cap of $25,000, and there’s also a lifetime cap of $60,000. And the objective is to make sure that if someone has the capacity to make a contribution, then they should. But importantly, if someone doesn’t have the means, then they’re not going to have to pay that means-tested care fee.
CLIFT:
Who are we thinking about here in terms of who will be the most impacted? Can you give us an example of a person who may be going to have to pay more than what they would normally be paying?
FIFIELD:
It’s difficult, and I always hesitate to pluck numbers out of the air, because there will be a means test which is applied to people taking into account their individual circumstances. You need to know what someone’s income is, you need to know what someone’s assets are.
But that’s where the MyAgedCare website will be an extremely useful tool for consumers. Already there is a requirement – as of a few weeks ago for the first time – for aged care providers to put on the website the prices they’re offering. We want to have the maximum transparency for consumers. And in the future, there’ll be an element on the website where people will be able to put in their particular circumstances, their particular details to get an estimation as to what sort of contribution they might be required to make to their care.
So it’s a terrific resource. It’s going to maximise the transparency. What we want is for consumers to have as much information as they can about aged care providers. And it’s important with these changes that there’s a tool that will assist them to work out whether they’re someone of low means, whether they’re someone of moderate means, or whether someone of high means. And the contribution that people will make will depend on whether they have low means, moderate means or high means.
But it’s very important for people to understand that there is a safety net there. Those people who don’t have the means will still have appropriate aged care accommodation. We don’t want to see lack of means knock someone out of what they need.
CLIFT:
So we’re really talking about the higher end of people with the most assets? I know you can’t give examples but they’re more likely the people who are going to be affected. People with lower means and average means are probably not going to be impacted.
FIFIELD:
It’s important that we recognise in our aged care system for those who have a capacity to make a contribution, that they do so. But it’s also very important that we continue to have a safety net so that people who have low means, who might lack the capacity to make a big contribution to their care needs, that they will only have to pay the basic fee. They won’t have to pay the means tested additional care fee. And it’s also important for people to know that when it comes to the accommodation side of things, that lack of means isn’t a barrier.
CLIFT:
Can you tell us the reasoning behind the changes?
FIFIELD:
Well, there was, I think for quite some time, frustration amongst consumers and also frustration amongst aged care providers, that you had a situation where people who were in low care could elect to pay a bond if they wanted to, but people in high care couldn’t. So this is all about giving more choice to consumers. If a daily fee suits your purpose for aged care accommodation, then choose that. If a bond suits your circumstances, then choose that. But it may be that a combination of the two works. So it’s all about choice for consumers.
And also, these changes are importantly about transparency. We want to make sure that prices and the offerings of aged care providers are more available and that it’s easier for consumers to shop around.
CLIFT:
I guess another aspect to it, of course, when you’re asking people who have a greater ability to make a financial capacity is that it’s actually going to mean more money is coming in for the aged care system?
FIFIELD:
Well, aged care has always been a combination of government contribution – and when I say government, I mean taxpayers – I’m keenly aware that government doesn’t have a dollar that doesn’t come from the taxpayer. But the Government, courtesy of the taxpayers puts about $13 billion a year in aged care. In addition to that, there is about four and a bit billion that comes from aged care consumers. So it’ll always be a mix.
And I think we’ve got to see aged care a little differently, say, to the other part of my portfolio which is disabilities. If you have a disability, chances are that you were born with it or acquired it in unforeseen circumstances. It’s hard to plan for that. It’s hard to make provision for that. It’s hard to put money aside for that. But with aged care, we want to get older. We hope we get older. So there’s a greater contribution, or a greater capacity for people to plan and to put money aside.
And for people who’ve been in that situation, where they can, it’s appropriate that they make a contribution to their care. But it’s also very important that we always have a safety net for those who don’t have the means.
CLIFT:
When we spoke to a local CEO of an aged care facility in Broken Hill, he spoke of the fact that this is also to tie it in with the fact that aged care is costing more and more and more and more and as we have an ageing population we’re continually hearing about how the population is ageing, costs are going to continue to increase.
FIFIELD:
Well, we do have an ageing population and that’s a fantastic thing. It’s something that we’ve been working towards as a society for a long time. We have, fortunately, a few thousand Centenarians at the moment. And by 2050, we’re going to have tens of thousands of Centenarians. So I don’t see the ageing population as a negative thing. I see it as a positive thing. And an older population is a great national resource and we’ve got to recognise that. It will provide good opportunities for mentoring young people. But it also means that we’ve got a lot of people with a lot of experience and a lot of ability who will have the capacity to contribute into the workforce. And that’s a good thing.
CLIFT:
Yes, I guess it also does mean though that there are going to be greater demands for aged care services?
FIFIELD:
There will be, and I think one of the interesting things is that what people probably don’t realise is that only about five per cent of people over the age of 65 are actually in residential aged care. Most people who receive support live at home and most people in fact live at home without support. So that’s interesting and I think what we’re going to see over time is people’s preference to live at home rather than go into residential aged care; I think we’re going to see that trend continue.
And that we’ll see residential aged care essentially become something for people with high needs, and the bulk of people who need a bit of help receiving that in-home.
CLIFT:
When I spoke with the CEO of the local aged care provider and again, address that issue about the incentive for people to stay in their homes, is there going to be further incentives from the Government to attract more people to stay in the home rather than going into aged care facilities?
FIFIELD:
Well, I don’t think government particularly needs to provide incentives because that’s what people are demanding. They’re demanding support in their home. That’s where the consumer choice is heading. We tend to focus on residential care when we talk about aged care but most people are receiving care in the home. And I think that trend will only be advanced by greater consumer choice and that’s a good thing.
CLIFT:
He also suggested that perhaps there is going to be an increase in retirement village settings, having more services brought in to cater for those who perhaps have growing needs in aged care. What do you think about that?
FIFIELD:
The retirement village industry is an important part of accommodation for older Australians. The retirement village sector operates essentially under state laws because it’s really a residential housing choice. It’s not formally part of the aged care system in terms of accommodation. But there are people in retirement villages who will be receiving home care support through the aged care system. So that’s another option for people who want to live in a community. One of the reasons why people sometimes prefer a residential aged care setting is because of the community that they live in. Retirement villages also provide that community feel. So that’s certainly an option for people if they need aged care support, and it’s a good option for people if they don’t need that home support as well.
CLIFT:
If we talk about the changes that are coming in on July 1, you did talk about people seeking advice and one way you said people can get support is by going to the MyAgedCare website. There’s also, I understand, a phone line that people can go to as well. Can you explain that for us?
FIFIELD:
We talk about the MyAgedCare gateway. The gateway is a website and it’s also a helpline. So there is a lot of online information for people that they can find out more about aged care, that they can compare options that are available. But there is also advice about support for consumers in their local areas, advice on referrals and assessment services. So a lot of that information is online, but we know that online can never replace human contact and I think that’s particularly so for Australians who are getting older – they often want to have the opportunity to talk to someone, and the phone line is also there as part of the MyAgedCare gateway.
CLIFT:
You mention there that they could then be directed back to contacts in the local area, so they could perhaps then get some support or some financial advice from people in the local area?
FIFIELD:
Absolutely, and I think it’s important that when you’re making a really important decision in your life about residential care or home care, and looking at options in terms of how you pay for your accommodation, I think it’s really important that people consider getting independent financial advice for what is a big life decision. And these aren’t just decisions for individuals, they’re decisions for families as well, and I think a lot of people like me have had the experience of ageing parents and you can find yourself – or in my case it was more my older brother – really having to explore the options on behalf of your parents.