Changes to community care

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Changes to community care

Posted 2/05/2012 by Rebecca de Boer

The Government has announced a significant expansion in community aged care as part of its Living Longer Living Better aged care reform package. All existing community aged care packages (Home and Community Care Program, Community Aged Care Packages, Extended Aged Care at Home, Extended Aged Care at Home – Dementia and some smaller programs) will be consolidated into a single program known as ‘Home Care’ packages. The overall number of these home care packages will increase from 59 876 to almost 100 000 by 2016–17.

Changes will also be made to the payment arrangements for community aged care. From 1 July 2014, older Australians may be asked to contribute to the costs of their care via a Care Fee (it appears that whether fees will be charged will be at the discretion of the provider). These fees will be means tested and will be paid in addition to the Basic Fee which is currently charged.

The arrangements will include:

  • annual caps on fees for part-pensioners ($5000) and self-funded retirees ($10 000)
  • full pensioners will not pay a Care Fee
  • self-funded retirees with an income greater than $43 186 will pay a care fee on a sliding scale up to a total of $10 000 per annum
  • people with a private income above $150 for a single person and $264 for a couple per fortnight will pay care fees
  • charges for the cost of care provided in the home determined by the Aged Care Financing Authority
  • these charges will contribute to an annual lifetime care cost limit of $60 000 (the lifetime limit takes into account care provided in both community and residential settings)
  • the Government will still pay a subsidy to aged care providers and this will be reduced by the Care Fee paid, and
  • subsidised care fees will be available for people receiving Home Care packages who experience severe financial hardships (as is the case for residential aged care)

Some changes have also been made to Home Care arrangements to enable older Australians to access increased levels of care (and associated subsidy) as their care needs change. There will be four levels of Home Care ranging in value from around $7500 to $45 000 (government subsidy per annum). These new arrangements are expected to better accommodate the needs of older Australians and facilitate them remaining in the community–and their home–for longer.

The means testing arrangements for community care have been described as ‘sensible and fair’. However, UnitingCare Ageing has undertaken some analysis of the community care package and estimates that older Australians living at home with low incomes will pay considerably more than they currently pay for care provided in the home. Couples with an income of $50 000 could pay up to 20 per cent of their income in care fees. This may well act as a disincentive for some to remain in their homes. As canvassed in a previous Flagpost, there have been calls by some aged care advocates for the family home to be used to pay for aged care. In this instance, the family home would be used to establish a line of credit to pay for aged care so that people could remain in their home for longer. 
Although the Government has committed to additional community care packages, it has not withdrawn the restrictions on the number of aged care packages (both community and residential). This is likely to cause problems in the future as demand is likely to outstrip supply. The 2011 aged care planning round received 24 336 applications for community care, yet only 1724 places were allocated, highlighting the significant demand for community aged care. It also is not clear if there will be a specific focus on the development and delivery of community aged care services in regional areas .

Another feature of the community care package is the shift towards consumer-directed aged care. The Government is currently conducting an evaluation of Consumer Directed Care but this has not yet been released. The program currently in operation is perceived to be restrictive as the budget and delivery of services is controlled by the aged care provider. It remains to be seen whether consumers will have greater involvement in choosing (and purchasing) aged care services. Previous criticisms of the Government’s community aged care program have suggested that the administrative costs are high, reducing the number of hours available for face-to-face care. There is (currently) insufficient detail to determine whether these concerns will be addressed as part of the new arrangements for community care.

Like the rest of the Living Longer Living Better aged care package, the community care measures have been cautiously welcomed by the aged care sector. Time will tell, as noted by one commentator, whether it will result in a ‘fundamental transformation from a funding-driven, provider-driven system to one that’s driven by what older people themselves need and want’.

See also previous FlagPosts which have canvassed other aspects of the Government’s aged care reform package (see here and here).


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