Ian Yates identifies missed key element in Taskforce recommendations

Ian Yates AM, the Acting Inspector-General of Aged Care, has released a rare statement welcoming the Aged Care Taskforce’s recommendations, praising them for aligning many thoughts with principles his Office published last year.

Key points

• Last year, Mr Yates and his Interim Office prepared a Progress Report on the Implementation of the Recommendations of the Royal Commission into Aged care Quality and Safety
• This report featured several key principles and objectives that were published publicly and presented to the Aged Care Taskforce directly
• The Taskforce’s recommendations for developing a financially sustainable aged care sector were released in March with Mr Yates supporting those that are aligned with his recommended principles

Mr Yates’ statement explains that the Progress Report advised the Taskforce that the Government needed to achieve the right balance for everyone in the system in addressing financing and funding. He added that a successful aged care system needed robust, consistent, equitable and sustainable funding arrangements. 

“The Progress Report drew attention to the need for a more balanced approach between taxpayer and consumer contributions, being alert to intergenerational equity, and the need to maintain safety nets for those with low means,” Mr Yates’ added.

“The Progress Report proposed suggested four overarching funding principles: 

1. Funding for the aged care system is adequate, secure, and sustainable into the future. 
2. Funding arrangements are equitable and ensure aged care remains accessible to all, regardless of means. 
3. The costs of aged care are transparent and understandable to all. 
4. Funding is economically sound and designed to ensure investment and growth in the aged care system. 

“These principles are evident throughout the recommendations of the Aged Care Taskforce’s Final Report. While the Taskforce’s report and recommendations cover some areas of policy detail that the Progress Report did not, the overall directions of the Taskforce Final Report are consistent with our recommended principles.”

Among the many recommendations posed by both the Taskforce and the Interim Office of the Inspector-General, several overlap and are likely to influence the sector. 

This includes consumers with the means to do so making co-contributions to their aged care services. 

“The Progress Report noted that current inequities in the aged care funding arrangements mean that taxpayers of moderate means facing significant living costs are paying for the aged care of people who may have a high income, assets, or both,” Mr Yates said

“We put forward as part of principle 2: People with the means to pay do pay at a fair and equitable level to those with similar means.” 

Elsewhere, both called for strong safety nets to support older people who are not as financially secure and require some additional financial help to access much-needed aged care services. 

Increased fee transparency is another important recommendation as there is the belief too many are complicated and hard to understand for consumers. 

The Taskforce’s recommendation to transition from Refundable Accommodation Deposits (RADs) to a rental-only model by 2035 echoed the Progress Report. 

“The Progress Report noted that policy settings may be contributing to a funding shortfall between accommodation and living costs, including: 

• A heavy utilisation of RADs is not a “fit for purpose” method of financially supporting many residential care providers and there are often difficult trade-offs for both providers and consumers in making a choice between paying an up-front RAD or making a DAP. 
• Any move to phase out RADs in favour of alternative options needs to be undertaken in a slow and deliberate manner to ensure aged care providers remain viable during the changeover. 
• It also requires the availability of alternative long-term investment funds – such as from large superannuation funds, both domestic or international – which requires policy stability and a sufficient rate of return on investment.”

Although Mr Yates’ summary analysis identified several other overlapping recommendations, he acknowledged one key recommendation the Taskforce did not address. He said there is strong support for the implementation of Royal Commission recommendation 41 which called for the replacement of the Aged Care Provision Ratio with a new planning regime.

Essentially, aged care should be a needs-based system rather than rationed based on population ratio or home care services caps. 

“Bed licences for residential care are set to be abolished by the end of 2024, but policy settings for supporting needs-based supply have yet to be finalised. With increasing allocations of HCPs in recent years, waiting lists for HCPs have reduced significantly, though they do remain, and waiting times are longer than the Royal Commission recommended,” read Mr Yates’ Progress Report. 

“Moving to needs based planning and provision would bring aged care into line with the entitlement basis that underpins the provision of health services and social security.”

With no comments by the Taskforce on needs-based planning, Mr Yates has made a clear statement it’s a discussion that must occur soon.