Post by Banjo on Aug 9, 2011 15:57:02 GMT 7
Re-financing of aged care announced
The Productivity Commission's inquiry into Australia's aged care system has released its final report. Fundamental changes to the way aged care is delivered and financed are proposed, including the move towards user pays.
The Productivity Commission's (PC) final report 'Caring for Older Australians' has recommended government-backed reverse mortgages and an Australian Age Pensioner's Savings Account to allow people to retain ownership of their own home and still receive aged care.
The report recommends that if people do sell their home then they would not be penalised by losing the pension in a means test as they do under the present arrangements. Homes could be sold and the proceeds banked in the new Australian Age Pensioner's Savings Account which would attract interest and could be used as and when needed.
Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, also announced reverse mortgage draft legislation to increase protection around reverse mortgages and incentivise their use.
The proposals include introducing Australia's first statutory protection against negative equity, which would mean lenders can no longer ask seniors to pay more than the value of their home at the time of sale.
The PC's report emphasises that the Government would still carry the burden of costs for aged care - ranging from 100% for low income pensioners and down to around 75% for the more affluent. A "'lifetime stop-loss limit '' of $60,000 is proposed, after which the government would step in to pay for aged care.
The report recommends that accommodation and living expenses would be met by the individual.
The Minister for Ageing, Mark Butler says the report also recommends the creation of a new regulator which would oversee the industry and set prices.
"Although the Productivity Commission says that there should be more of a market approach to this, in the sense that the supply of aged care places is opened up, they also say that the prices in the sector should continue to be regulated by the government through an independent commission," Mr Butler told ABC radio on Tuesday.
Under the recommendations, aged care providers would be obliged to publish easy to understand fee structures.
If accepted by government, the plan would be implemented in three stages over a five year period.
www.financialstandard.com.au/news/view/12187366/
The Productivity Commission's inquiry into Australia's aged care system has released its final report. Fundamental changes to the way aged care is delivered and financed are proposed, including the move towards user pays.
The Productivity Commission's (PC) final report 'Caring for Older Australians' has recommended government-backed reverse mortgages and an Australian Age Pensioner's Savings Account to allow people to retain ownership of their own home and still receive aged care.
The report recommends that if people do sell their home then they would not be penalised by losing the pension in a means test as they do under the present arrangements. Homes could be sold and the proceeds banked in the new Australian Age Pensioner's Savings Account which would attract interest and could be used as and when needed.
Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, also announced reverse mortgage draft legislation to increase protection around reverse mortgages and incentivise their use.
The proposals include introducing Australia's first statutory protection against negative equity, which would mean lenders can no longer ask seniors to pay more than the value of their home at the time of sale.
The PC's report emphasises that the Government would still carry the burden of costs for aged care - ranging from 100% for low income pensioners and down to around 75% for the more affluent. A "'lifetime stop-loss limit '' of $60,000 is proposed, after which the government would step in to pay for aged care.
The report recommends that accommodation and living expenses would be met by the individual.
The Minister for Ageing, Mark Butler says the report also recommends the creation of a new regulator which would oversee the industry and set prices.
"Although the Productivity Commission says that there should be more of a market approach to this, in the sense that the supply of aged care places is opened up, they also say that the prices in the sector should continue to be regulated by the government through an independent commission," Mr Butler told ABC radio on Tuesday.
Under the recommendations, aged care providers would be obliged to publish easy to understand fee structures.
If accepted by government, the plan would be implemented in three stages over a five year period.
www.financialstandard.com.au/news/view/12187366/