COTA Australia response to Aged Care Royal Commission funding, financing and prudential regulation hearing

COTA Australia are concerned that there is not a stronger emphasis on requirements for the regulator to ensure the transparency and full disclosure of up-to-date pricing information for the consumer.

Aged Care providers should be required to provide service and pricing information at a site specific level – not a whole-of-business level – to inform consumer decisions.

COTA supports the proposition that each individual may not contribute the same total amount as their neighbour, given the complexity of individual service needs and people’s capacity to pay. Nevertheless, COTA believes that funding contributions by consumers need to be determined on a clear and equitable basis. This includes equity between service settings (e.g. CHSP, HCP & Residential Care) and equity between those of comparable wealth (i.e. including all income or asset classes).

Accordingly, we submit that following a care need assessment, individual consumer contributions, determined through means testing, should be translated into an easy to understand ‘cents in the dollar’ approach, so that consumers easily understand the amount Government will contribute and the amount that the individual will contribute. There should be a flexible approach to how a consumer raises the funds to pay their contribution and this should not be prescribed to one or two solutions.  COTA favours Government facilitating a range of options that the individual may choose from (e.g. a loans scheme paid from their estate, a loan scheme secured against their principal place of residence, tax-incentivised deferred annuity type superannuation products, private insurance solutions, payments in cash from liquid assets or income).

While government funding solutions may or may not involve hypothecation, COTA believes it is critical that the Royal Commission link Government funding recommendations with population based growth to ensure that the necessary funds to implement the Royal Commission outcomes, if delivered by Government, are maintained at real per capita value by successive Governments.