ABC Radio NSW Statewide Drive with John Morrison
E & OE
MORRISON:
Changes have been brought into aged care designed to make the system fairer, so that people contribute more to their care if they can afford to. It will mean that income and assets will be taken into account when working out aged care fees. That’s one aspect to talk about, and we will in just a moment. The other is in increasing funding and attracting more people to work in the aged care sector. So these are just some of the issues which we have a chance to raise today with Senator Mitch Fifield, who’s the Assistant Minister for Social Services, the Manager of Government Business in the Senate and a Liberal Senator for Victoria. He joins me in the studio this afternoon. Senator, welcome to the program. Thanks for coming in.
FIFIELD:
Good to be with you John.
MORRISON:
It’s good to be able to talk about this, because it is an issue that many people need to talk about and sometimes don’t, and often find it’s too late. It’s quite a complex area when you first approach it. Let’s start with the changes that have come into effect. It does mean that Australians, in some cases and in many cases, will be paying more for their aged care. Why was it necessary to do that on the first of July?
FIFIELD:
John you’re right, it’s important that those people who have the capacity, who have the means, make a contribution to their aged care. But it’s also very important that we maintain a safety net so that no one is denied aged care or accommodation because of a lack of means.
And I think it’s appropriate that we do look to people to make a contribution to their aged care. It’s quite different to the other part of my portfolio – disability. People who acquire a disability usually do so in circumstances beyond their control, that they can’t anticipate, that they can’t plan for. They’re born with a disability or they acquire one in an accident. So it’s very difficult for people in that situation to plan and make provision for their care. But we all hope to get older, if we’re lucky, so it’s something we have a greater capacity to plan for.
MORRISON:
I’ll come back to disability, but just in relation to the aged care, there is a lot of pressure on now to look at the total assets. If I can ask you in a nutshell, because ears will have pricked up, because clearly it involves what assets they’re holding, and most importantly the family home. Now how does it all come in in the changes that we’ve been talking about?
FIFIELD:
The first and most important point is that the changes that came in on the first of July only apply to people coming into residential care and home care from that date. For people who are already receiving aged care support, nothing changes for them.
But there are a few important structural changes from 1 July. And the first is removing the distinction between high care and low care. That’s important because previously, you could only make a lump sum contribution for low care. You couldn’t do that for high care. So what this means is that there’s a wider range of payment options for accommodation. People can elect to make a lump sum payment, or a daily fee, or a combination of the two. And people will have 28 days in which to decide which is the best way for them to make their payment.
But you also touched on another important change, and that is to means testing arrangements. Before these changes, there was an assets test for accommodation only, and there was an income test for care. And what that meant was that there are some people with high assets who are paying very little for their care, and some people with high income who are paying very little for their accommodation. So we now have a combined income and asset test.
MORRISON:
I don’t want to interrupt you there, but that was the distinction you made very clearly there between what is in effect, the family home, or that person’s home if they’re a widow, and what they have in actual cash. So how does that actually change now?
FIFIELD:
The treatment of the family home is essentially unchanged. So the value of the family home for the assets component of the means test is capped at $154,000. And the family home is only included if it’s not occupied by a spouse or another protected person. So that treatment remains the same.
MORRISON:
Right.
FIFIELD:
But I just might quickly go through the way that the income and asset test works in practice.
MORRISON:
Yes, sure.
FIFIELD:
For those people of low means, who have assets below $45,000 and income below $24,000, the only contribution that they will make is a basic daily fee, set at 85 per cent of the age pension. That’s the only contribution that they’ll make for their care. And they will not be required to make any contribution to their accommodation. The Government will meet all of that.
MORRISON:
All the cost, right.
FIFIELD:
For people of moderate means – people whose assets are above $45,000 and whose income is above $24,000 – for those people, they will pay the basic daily care fee – 85 per cent of the age pension. They will also make a contribution to their accommodation, but the Government will also make a contribution.
And then for people of higher means, people who have assets above $154,000, and income above $63,000, they’ll pay the basic care fee – that’s 85 per cent of the aged pension. They will pay also a means-tested care fee. And they will also have to pay their full accommodation costs. So that’s for people of higher means.
So there’s different treatments for people of low means, moderate means and higher means. But very importantly, there are also caps in relation to what people can be required to pay for their care. So there’s a $25,000 annual cap on care costs – this is for everyone in relation to the means test care fee. So there’s a $25,000 cap annually on that. There’s also a $60,000 lifetime cap. So there are important protections.
And also for people of very low means for people who may have particular financial hardships, there is discretion by the Secretary of the Department of Human Services to assist those people. So no one will be denied support – either care or accommodation – because of a lack of means.
MORRISON:
So it would effectively mean somebody on a high income would approximately have three years of paying full fees before its capped and therefore accommodation and care is for free? That’s capped?
FIFIELD:
That’s on the care side of things. But on the accommodation side of things, then people will have to pay. And it’s important to draw that distinction. In aged care there’s really two parts to the equation. There’s the care side and there’s the accommodation side. And something that surprises a lot of people is that only about 5% of people over the age of 65 are actually in residential care. Most people who are receiving support receive that at home.
MORRISON:
I was going to come to you on home care soon – I just wanted to clear that up though. Effectively Senator, does that mean that more people will be out of pocket to account for their accommodation and care?
FIFIELD:
Some people will be paying more as a result of these changes compared to what they would have paid if they had been in aged care before the First of July. And I emphasise that again, for your listeners, that anyone who was receiving aged care support before the First of July, nothing will change for them.
MORRISON:
Given that’s the situation, and this turns us to home care, which is the alternative now. There are significant changes going on in that area too, and I went through a number by talking to a number of organisations today – the aged care association of Australia, and the Aged and Community Services Association too. They outlined some of the points that they were concerned about, one of which did come down to, not so much concerns but they would like to see a little bit more done for that at help. Now I know you’re moving in that direction, more services are there, will it mean people will have to pay for those services as well?
FIFIELD:
The situation with home care is that, like residential care, there will be a basic daily fee, in this case it’s set at 17.5 per cent of the age pension. In addition to that, for those people of higher means, there’ll also be an additional means tested care fee. So that’s for people with an income above about $24,000 a year. So everyone has to pay the basic fee, and for those of higher means, there will be an additional means tested care fee.
MORRISON:
And I understand it’s also moving into – and this is the care at home aspect – moving into three particular levels. There’s the home care, and you’ll know the actual differences on the differences between home care, the aged care and there’s another level that escapes me at the moment.
FIFIELD:
That’s right. That third level of care is what’s often called Home and Community Care…
MORRISON:
That’s it.
FIFIELD:
…which provides, I guess, more basic supports to people. And those who need a bit more care again, home care. And residential care for those people of higher needs. And that actually will be an interesting change, is that increasingly residential accommodation will be for people of high care. Although we’re eliminating that low and high care distinction, people who have low care needs will increasingly opt to live at home. Which is why we’re increasing the number of home care packages by 80,000 over the next ten years.
MORRISON:
Is that enough? Given I understand the figure is around 170,000 people are currently in residential care, but we want to keep more people in their homes as well. Is that enough to be able to take care of those who do want to stay at home, even as their level of care increases because of age and illness?
FIFIELD:
I fully expect that over time, there’ll be a further rebalancing between residential and home care. But 80,000 packages is a start over the next ten years. But obviously this is always subject to review.
MORRISON:
The principle that you’ve been driving, and I think many healthcare and aged care services are driving, is the more and more times and opportunities to keep people in their own homes, the better it is in the long run. It seems to be proving itself. Do we have enough people to look after the people who are staying at home?
FIFIELD:
There is going to be a massive demand for workers in aged care over the next ten or fifteen years. It’s going to be in the many tens of thousands of additional staff that will be needed. And that’s care workers, that’s nurses, that’s administrative staff. There’s a massive demand that there’ll be for additional staff. And one of the things that we need to do is develop a decent workforce strategy.
MORRISON:
That’s the point I was leading to, because it was mentioned today that by 2050, 1 in 20, or 5 per cent of the workforce, will in fact be engaged in aged care employment. How do you get from where it is currently, and how do you attract the right people? And it was mentioned by somebody today too, one of the organisations, that you need people who are people-friendly, who have empathy, who are good communicators, strong communicators. In other words, you need people who are also highly qualified, for example, registered nurses as well to be available and coming into that aged care area. How do you encourage that and what are you doing to achieve that?
FIFIELD:
You’re right, at the moment there about 230,000 people working in aged care, and it’s going to have to double. One of the frustrations I’ve found since having the portfolio is, every day it seems I find another pot of money – $5 million here, $10 million there – which is dedicated to some aspect of workforce strategy. I don’t think it’s being deployed to the best possible advantage. So we’re having an audit of the various pots of money that are currently spent on aged care workforce strategy, so that we can have a coherent strategy. But you’re right, how do we recruit the right sorts of people? I was visiting one aged care provider earlier today in The Shire, and what they said to me is that the prime thing that they look for is attitude. They don’t necessarily start with what are someone’s skills, what are their formal qualifications. They start with attitude. Because if you’ve got someone with the right attitude, you can always put them through the courses, you can always train them up. And I think that’s something that providers need to do and want to do, and that is look for someone with the right attitude. Because not everyone has a heart and the right spirit and temperament for care. Because in aged care, you’ve always got to bear in mind that you’re in someone’s home. In a residential setting you’re working, yes, but you’re in someone’s home. And also that it’s a great privilege when someone in that situation, who is going through a challenging time, when they’re prepared to make themselves vulnerable and open up to you and allow you to provide care, that’s actually a great privilege for the person who is paid to work in that environment.
MORRISON:
How will you get them in there though? It needs to be attractive. It’s not necessarily a highly paid area of the workforce. I’ve noted today that a lot of the people who are coming back into aged care were older people – mainly women returning to the workforce who are 45 plus, who’ve had their families and now want to come back into the workforce. But it’s often mentioned to that if you work in the aged care industry for about two years, you tend to stay, whether you’re young or older. But it’s the point of getting people to make that start. So what’s the Government going to do to do that?
FIFIELD:
I think a big part of the responsibility is on providers to have an environment that is good to work in. And I think what ensures an environment that’s good to work in is an atmosphere, is a design, is a facility where the resident is happy. Where the resident is enjoying the experience.
MORRISON:
That’s true, but you’ve still got to get those people in.
FIFIELD:
Absolutely. But there are two parts of it, and a big part of it is with the providers. For government, we’ve got to make sure that we liaise with educational institutions to ensure that they’re taking through their courses the right number of people for the right skills set. That’s an important part of it. But also, government has a role to play in talking up what a great opportunity it is to work in social services – whether it be in aged care, whether it be in disability. Both aged care and disability, if I can refer to them as industries in the sense that they employ significant numbers of people and will be employing ever more numbers of people – it’s a growing industry, it’s an exciting industry, and we need to talk about the positives of working in it.
MORRISON:
Will there be a move by the government to legislate – because you provide most of the funding, I think 80% of the funding for aged care industry does come from government.
FIFIELD:
That’s right.
MORRISON:
Do you need to provide more money for increased wages, so that more people do come to the sector?
FIFIELD:
The approach that we’ve taken is a bit different to that of the previous government. The previous government set up something called the workforce supplement, which was to give $1.1 billion to aged care providers over the next four years, if they signed up a union enterprise agreement. In a sense it was an effort to promote unionism, and I guess you can’t blame a Labor government for doing that! But we thought a far better approach was to give that money to providers without those strings attached, because providers, with their staff, are in the best position to work out what the best arrangements are on the ground in their particular organisations. So that $1.1 billion in the last budget, we put back in for providers to give them that discretion. Because they know better how to run their businesses than we in government do.
MORRISON:
Senator Mitch Fifield is my guest this afternoon, Assistant Minister for Social Services and Liberal Senator from Victoria. We’re talking about health care, particularly aged care, and I will touch on disability, don’t worry about that, because I do want to get to it. But this was such an important area to discuss, because as we’ve said right at the start, not enough people perhaps even know about this area until they’re confronted with it in one way or another and sometimes in tough situations. So it’s good to be able to raise this as an issue for discussion this afternoon.
The other part though, was that there was some criticism of your changes that came in on the 1st of July with the removal of the memory care program funding. This was largely for dementia patients, and it takes away the extra care that was allowed for dementia payments with, as it was mentioned, severe behavioural problems. If that’s taken away, surely it presents a bigger problem not only for the community but for the aged care system and eventually for the hospital system as well. Why was that necessary?
FIFIELD:
Sure. The decision in relation to the Dementia and Severe Behaviours Supplement is separate to the 1 July changes which are coming in. Although it does also take effect from the first of July. But it’s not part of that package of changes.
MORRISON:
Right.
FIFIELD:
The previous government in August last year introduced the Dementia and Severe Behaviours Supplement, which had the intention of giving $16 a day extra to providers for their residents who had severe behaviour issues as a result of dementia. Now that was meant to apply to about 2,000 people, and the budget of the previous government was $11 million. So $11 million for 2,000 people. What happened was that in fact 25,000 ended up receiving support through providers and rather than cost $11 million in the financial year just gone by, it’s costing $110 million. And over the next four years, rather than costing $52 million, it was going to cost $750 million. And over the next ten years, it was going to cost $1.5 billion. So it was bad planning and bad targeting by the previous government.
This was meant to be for the 2,000 or so people with severe behaviour problems. Now there are obviously lots of people – probably half of the people in residential aged care – have dementia of some sort. But not all of them have severe behaviour issues.
MORRISON:
No that’s right, but significant numbers do.
FIFIELD:
This was targeted at people who have severe behavioural issues. Now this is not the only mechanism to support people with dementia. In fact part of the core business of aged care is supporting people with dementia. We have also allocated $200 million for dementia research. There’s also a dementia management advisory service for providers. But the long and the short of it is that the scheme blew out by ten fold. And we just can’t allow a situation like that to continue. So what we’ve said is we’re very happy to, and intend to sit down with the sector to discuss what can be in the place of the supplement, but within the original funding envelope.
MORRISON:
But something has to cater for people with severe dementia, and as you mentioned there are about 170,000 people in residential care – about half with dementia or signs of dementia or growing dementia problems. So roughly let’s round it out to 80,000 – 85,000 people with signs of dementia. Not severe as you pointed out, but we have to do something for them, because there is no dedicated area to take care of those people who are suffering and will increase that suffering.
FIFIELD:
The care and accommodation and support of people with dementia is a core part of the aged care business as it stands today. That’s a bit part of what aged care providers to. The severe behaviour side of things is, as I say, the objective was to support 2,000 people. Now if there were 25,000 people in our aged care system with severe behaviour issues related to dementia, it would mean that in Australia we had a much more significant percentage of the population with severe behavioural issues related to dementia than comparable countries. So the important thing to do is to recognise that the aged care system does support people with dementia, and does it well. If you’re going to get old anywhere in the world, if you’re going to have dementia anywhere in the world, Australia is a good place to be. But we’ve got to make sure that we target any additional funding to those organisations who are providing support to people with severe behavioural issues as a result of dementia. So we need to have a better targeted system.
MORRISON:
Senator Fifield one last point before I let you go, I’ve just looked and we’re coming close to time, but it’s such a good area to talk about. I did want to ask you about the NDIS, the National Disability Insurance Scheme. Three different sites were launched as of the first of July – in WA, the Northern Territory and the ACT. Let me ask you directly, is there enough funding to extend the Scheme as it’s been stated?
FIFIELD:
Absolutely. In the Budget a few weeks ago we guaranteed and provided for the funding for the NDIS. There was a bit of scare-mongering by our political opponents before the Budget that we were going to pull funding for the NDIS, that the rollout wouldn’t have full provision made for it. But we delivered in the Budget, and more than that, we actually found a bit of extra money. The previous government wanted to apply an efficiency dividend to the package costs of people in the NDIS. We didn’t think that was fair or reasonable, so we abolished that and have actually returned $45 million additional into the pot for the NDIS.
MORRISON:
Is it covered for over the forward estimates? In other words, over the next four years as well?
FIFIELD:
The money is there in the forward estimates and beyond. The previous government as you probably recall put into place, starting on the First of July this year, an increase in the Medicare levy to go towards funding the NDIS. But although that fully funds the NDIS for the next couple of years in terms of the Commonwealth’s contribution, over time, as the NDIS rolls out and expenditure increases, that levy will only cover about 50% of the Commonwealth’s contribution to the NDIS. So it will fall to us to identify savings elsewhere to fully fund the NDIS. But that’s our commitment and that’s what we’re going to do.
MORRISON:
Alright. Senator it’s been great to raise a number of these issues with you and good to be able to talk about it as well. There’s a lot going on, there’s a lot of information that is available for people who want to talk about both aged care, care in the home. Sometimes you need that to be clarified as well. Let’s talk another time.
FIFIELD:
That’d be great John. And I should direct people to the My Aged Care website – myagedcare.gov.au. Or, if you want to talk to a real live human being, 1800 200 422. And there’s a fee estimator on that site where people can plug in their assets and income and see what they’re likely to have to pay.
MORRISON:
And there is a lot of information on that site – My Aged Care – as I said I looked at it in detail today as well. And Senator Mitch Fifield has been my guest this afternoon. The Assistant Minister for Social Services, Liberal Senator for Victoria, and he’s been good enough to come into the studio. And thank you very much for doing so. Look forward to talking again.
FIFIELD:
Look forward to it John.