Staggering amount Boomers, their children and grandkids will have to pay for aged care under ‘once in a generation’ $5.6billion reforms: What it will cost you

The Albanian government has announced “once-in-a-generation” reforms to the elderly care sector, including requiring new residents of care homes to make an income-based contribution of up to 80 percent.

Prime Minister Anthony Albanese announced the $5.6 billion package on Thursday after reaching a deal with Peter Dutton’s coalition, pledging to ensure “the viability and quality of our aged care system and support” for the country’s ageing population.

Central to the reforms is a package called Support at Home, which comes into effect on July 1 next year and will provide support to older Australians who do not want to move into a care home.

For Australians staying home…

The new system would provide support for clinical care, including nursing and occupational therapy.

Pensioners also receive support to remain independent, for example with showering, dressing and taking medication. They also receive help with household tasks, such as cleaning, gardening, preparing meals and shopping.

The costs of clinical care, such as a visit to a nurse or occupational therapist, are fully reimbursed by the government.

Support is also available for daily living, such as help with household tasks like cleaning, gardening, preparing meals and shopping.

However, retirees would contribute individually to their daily living expenses, with resources playing a role.

For fully retired people, a discount rate of 17.5 percent applies to daily costs and only five percent on costs for self-employed people.

However, self-funded pensioners would have to pay 80 percent of daily costs and 50 percent of independence support costs themselves.

There would be a cap so that no one would contribute more than $130,000 to their own clinical care in their lifetime.

Every contribution to Support at Home counts towards that maximum.

All dying Australians would also be entitled to $25,000 to spend the last three months of their lives on palliative care at home, rather than having to go to hospital.

For retirees who go to elderly care…

The reforms mean that newcomers to elderly care will have to pay a higher, income-based contribution to their own care.

But the ‘no worse times’ principle means that contributions for anyone already in the system will not change.

Under the reform, all new entrants to the elderly care sector would have to pay significantly more (stock image)

Nursing homes will now be able to charge $750,000 for a room without special permission. That’s a $200,000 increase from the current limit. Prices will also be indexed over time.

Providers are also allowed to retain two percent of residents’ deposits per year for five years. This is the result of a study that shows that almost half of providers are making a loss due to accommodation.

The government will save $12.6 billion over the 11 years following the reforms.

The Commonwealth remains the largest funder of aged care, contributing $3.30 for every $1 contributed by a residential care recipient, and $7.80 for every $1 contributed by a home care recipient.

The reforms also require an additional $930 million spent over four years to help protect the rights of older Australians.

A new complaints commissioner would be appointed and providers and managers would be held accountable.

The reforms will not affect those already in the elderly care system (stock image)

Prime Minister Anthony Albanese described the reforms as “the biggest improvement in aged care in 30 years”.

“This is about caring for the generation that cared for us,” Mr Albanese said.

‘Such reforms don’t happen every day, they only happen once in a generation.’

Anne Ruston, shadow minister for aged care, said the opposition welcomed the bill.

“We remain disappointed with the lack of transparency shown by the government in this process, where discussions took place behind closed doors,” she said.

“We look forward to now having an open conversation with older Australians and the aged care sector about the government’s proposed reforms.”