Political stand-off continues over critical Aged Care Act features

The new Aged Care Act’s official introduction to Parliament continues to be delayed as the Federal Government and opposition party argue over two major issues: the ability to impose fines and jail terms for directors who do wrong, and either boosting or removing lifetime contribution caps.

According to the Australian Financial Review’s political editor, Phillip Coorey, discussions have reached “such an impasse” that the Coalition is urging the Government to publicly release the proposed reforms to help with decision-making.

Shadow Minister for Health and Aged Care, Anne Ruston, has been quite vocal about the Government’s lack of transparency, using the recent National Retirement Living Summit as another opportunity to call them out. 

“The one thing I would say to the Government that they really should be doing is don’t be talking behind closed doors. Put this information out in the public domain. Let you [the public] have your say about what’s in it because you’re the experts,” she said.

Yet once again, it appears that Anthony Albanese’s team is not acting on those recommendations. It has been seven months since the exposure draft of the Aged Care Act was released, and despite confirmation it would be delayed until mid-2025, little information has been released.

And although the Government has not publicly responded to the Aged Care Taskforce’s final report and recommendations it seems like they are planning to act on some of the recommendations.

Yet this is why an impasse has been reached.

In its report, the Taskforce said “If government chooses not to fully fund care, it may wish to review current arrangements for care fees, including the potential for removing annual caps and reviewing lifetime caps”. 

The Government is currently looking at lifting the residential care lifetime contributions cap to $190,000, more than double the current $76,096. It would abolish any cap for home care services. 

Importantly, this was not the Taskforce’s first preference. They called for the Government to fully fund direct care services, allowing older people to pay means-tested co-contributions for accommodation and daily living expenses. 

The Albanese Government reportedly “baulked” at the idea of increasing the threshold for the value of a family home including in the current means-tested system. They view the $200,000 threshold as ideal and would rather see lifetime caps increased or abolished in the case of home care. 

While the opposition party is seeking more clarity on that situation, they have firmly opposed the Aged Care Act’s proposed jail terms and hefty fines for aged care directors who breach new standards.

Fines of up to $313,000 could be laid down while serious failure to comply with statutory duty could result in five years imprisonment.

While some from outside of the sector have labelled these penalties as positive, aged care providers are understandably worried about the impact on attracting skilled and experienced people to the sector. 

Financial repercussions are already being felt as insurance fees have increased drastically. 

Ms Ruston remains an avid critic of the proposal, and with her entire party on her side, Prime Minister Albanese’s team clearly has a lot of work to do if they want the Coalition’s support for a new Aged Care Act.