Paul Keating tells royal commission HECS-style loans should fund home aged care
Former prime minister Paul Keating has laid out a HECS-style loan plan aimed at covering home care costs for elderly Australians who do not want to go into a nursing home.
Giving evidence to the Royal Commission into Aged Care Quality and Safety on Monday, Mr Keating said a Commonwealth-run post-paid system could reduce wait times for home care packages and ease the financial burden on families.
He likened it to the HECS loans given to university students that are only paid back once they graduate and reach an income threshold.
“The Commonwealth could then advance as loans to every aged Australian so much as to meet their needs in support services to stay at home or alternatively in care accommodation,” Mr Keating said.
“Everyone would have an account … the Commonwealth would advance money to the account to pay for your home care accommodation or aged accommodation,” he said.
“Then, upon your death — and no earlier — there would be a credit to that loan account from the estate of the deceased person.
“The Commonwealth account would then receive a credit … so we’re not forcing anyone out of their home.”
As of March this year, about 100,000 Australians were waiting for a home care package at the level to which they had been assessed, the royal commission has heard.
“We live in this wealthy country … why would somebody need to wait 36 months for a level four package, or 24 months?” Mr Keating said.
“These are aged people; they’re likely to die in the period.”
Mr Keating, 76, has previously called for a scheme to help Australia’s elderly access aged care services.
He was treasurer when HECS was first introduced in 1989.
Loan scheme ‘hard to sell’
Councils on the Ageing (COTA) Australia chief executive Ian Yates told the royal commission he was open to Mr Keating’s loan scheme idea.
“I think at the theoretical level it’s certainly worth exploring … the devil will always be in the detail,” Mr Yates said.
National Senior Australia chief executive John McCallum said the loan idea might be “hard to sell”.
“I think the sort of trouble we’ve had … from a consumer point of view [is] it’s a difficult one to get to understand,” Professor McCallum said.
Little link between funding and spending
The Royal Commission into Aged Care Quality and Safety heard residential care providers receive $12.4 billion from the Federal Government and individuals each year.
However, there are no requirements to spend that money on care.
“Residential care providers’ annual reporting requirements do not adequately reveal how that money is used or what profit or loss is made in providing residential care services,” counsel assisting the royal commission Peter Gray QC said.
Home-care providers receive $2.5 billion from the Commonwealth each year but do not report how they spend it, the inquiry heard.
Mr Gray said a Department of Health survey found in 2018-19 home care providers spent enough for 15 minutes per fortnight on nursing and allied health care, even for the most needy people.
An interim report to the royal commission from accounting firm BDO found some aged care providers were delivering substandard care while increasing profits.
“There is at present no systemic means at which … particular amounts and therefore sufficient amounts of public funding intended for care is actually spent on care,” Mr Gray said.
“More rigorous financial reporting and accountability should form part of the solution.”
Aged care homes hold over $30 billion in Refundable Aged Care Deposits (RADs), the royal commission heard.
The bonds are deposited to the aged care provider before someone moves into a nursing home.