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Budget commitment to aged care not good enough

Treasurer Josh Frydenberg has announced the government will commit more than $1.6 billion to provide support to the country's ageing Australians, but experts say the measures don't go far enough.

The Treasurer announced the record funding would go towards an additional 23,000 at-home care packages, with further investment set to be announced following the final recommendations of the Royal Commission into Aged Care Quality and Safety in February next year.

"This brings the total to more than 180,000 places, three times the number of home care packages than when we came to government," he said.

"99% of all those seeking an in-home aged care package now have access to some form of in-home support."

But Aged Care Gurus principal Rachel Lane told Financial Standard it just isn't good enough.

"Only 2000 of the new packages are at level four, which is the highest level of care and the level that's needed to keep people out of residential aged care," she said.

"The Royal Commission has already heard that 16,000 people died last year waiting for their home care package. Who knows how many end up in residential aged care? There are more than 100,000 waiting for a home care package. It's just pathetic."

Similarly, Grattan Institute director of health programs Stephen Duckett said the newly announced funding was a drop in the ocean.

"It's about a quarter of what is necessary," he told Financial Standard.

"There are around 75,000 people on waiting lists, and there are about 25,000 people on a lower level of package than what they require. It's less than half of what the aged care lobby groups asked for."

Frydenberg also announced the government would provide an additional $11.3 million in funding to help improve workforce skills in the aged care sector.

This funding would help train and support aged care providers and carers of dementia sufferers, Frydenberg said.

Lane noted that there were around 370,000 aged care workers operating across the residential and community care sector in Australia.

The training spending announced today, divided equally across these workers, comes in at $30.54 per person, she said.

And with around 3000 nursing homes across the country, Duckett said the funding didn't go far enough.

"They need to fundamentally reform the aged care system and they haven't actually started doing that in this year's budget," he said.

Lane agrees, arguing the government has avoided the issue of aged care funding for far too long.

"What they've done with aged care is kick this funding issue into the long grass of a Royal Commission, but eventually, we're going to have to have some really tough conversations about what the government will fund, what they won't fund and what people will have to pay towards the cost of their aged care," she said.

"But fundamentally, we need to agree, as a society, that people waiting more than 12 months for their home care package shouldn't be the standard."

The government also announced it would move to improve oversight and the investigation into serious incidents of misconduct in the aged care sector through a serious incident response scheme, with additional funding of $29.8 million.

It also announced it would provide $10.6 million to connect younger people living in residential aged care to aged appropriate accommodation.

"This will support the government's target to have no people under the age of 65 living in residential aged care by 2025," it said.

"From March 2019 to June 2020, there has been a 39% reduction in the number of people under the age of 65 entering residential aged care."

The Morrison government also announced it was continuing to develop an alternative aged care funding tool - the Australian National Aged Care Classification. The budget, it said, included $91.6 million in funding for a new independent assessment workforce for the funding tool.

To support aged pensioners, the government announced they would receive two economic support payments, the first of which would be a $250 payment in December and further $250 payment in March 2021.

It comes after the government provided a $750 payment in April and July this year, to support aged pensioners during the crisis.

Also on a positive note, the government announced it would support older Australians and their families by providing a targeted capital gains tax (CGT) exemption for formal granny flat arrangements. The new measure will also apply for people living with disabilities.

Prior to the exemption, families faced a significant CGT liability in creating a formal or legally enforceable granny flat arrangement. This may have led them to opt for informal arrangements, which can leave families open to financial risk and exploitation.

Under the new measure, CGT will no longer apply to the creation, variation or termination of a formal written granny flat arrangement for older Australians or those with disabilities, with the exemption commencing as soon as 1 July 2021, subject to the passing of legislation.

Lane said the removal of the tax disincentive for granny flats was great news.

"It will encourage families to have a formal agreement, which is so important in providing certainty for grandparents and their children," she said.

There are currently around 3.9 million pensioners and approximately four million Australians with a disability who will be eligible for the fresh exemption.

Read more: CGTRoyal CommissionFinancial StandardTreasurer Josh FrydenbergAged Care GurusGrattan InstituteRachel LaneStephen Duckett
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