Living Longer, Living Better – the coming reforms

June 17, 2014 | Aged Care Finance

A number of changes are on the way in the aged care sector, with most set to significantly alter how the industry operates.

Changes under the Living Longer, Living Better package will help substantially when it comes to service improvement and affordability.

The Living Longer, Living Better package was one of the biggest developments in aged care to come out of the 2012 budget, with plans to put comprehensive reforms in place through 2022. The changes would create a better and more nationally consistent aged care system.

The package aims to contain growth in expenditure, boost price signals and increase incentives for self provision through funding arrangement reforms. These will be implemented over the next five years, with a review scheduled for 2016-17.

At this stage, any required adjustments or improvements will be explored, and implemented if necessary.

In addition to this, further measures will be put in place to ensure the effectiveness and sustainability of government programs.

Significant changes are also on the way for the means testing arrangements currently in place for residential and home care services. These will take effect from 1 July 2014, at which point an annual cap of $25,000 will apply to the means tested contribution care costs.

This change is coming in conjunction with a lifetime cap of $60,000 for means-tested fees. Strengthening the means testing arrangements could become an important decision, as it means it will be easier for aged care facilities to handle new entrants.

Older Australians within an aged care facility will also be asked for their accommodation through an accommodation bond or through a periodic fee, depending on the type and level of care they receive.

These adjustments could make finances difficult for many older Australians, and as such it will be important for them to consider facilities that are priced affordably.