Sounds fair enough on first read. However, people who are well off also pay the most in personal taxes and have done so in their lifetime. In the case of the Medicare levy, if you earn more you pay more, but get the same benefit.

So, if the Government extended Medicare to cover the cost of aged care, then the same would apply. The higher earners would pay more but all would get the same service. I can't agree with the proposition that because you are wealthy your assets should be stripped in order to get access to aged care. Rather if you are wealthy you pay more tax and a greater medicare levy. That's fair enough. But when it comes to aged care benefits, when the time comes, all sould have equal access.

Translation: we made a lot of friends and gained political clout by supporting free aged care, but now we realise how much it's going to cost us, we've suddenly realised it's a Bad Thing.

Which they could have foreseen at the time, of course, if they'd been willing to do the math: but it wasn't politically expedient.

Paying your way in aged care is the last step in disfranchising ordinary people of home ownership. In the past they have struggled to pay mortgages and to become a landowner. This will now be of short duration as the value of their homes will be sucked into the future vortex of aged care.

Shamefully this extra cash of people’s homes will not translate into high quality services but will be put towards paying the interest payments as new aged care facilities are set up. Our homes will pay for the sites and buildings etc and the care will be funded by overstretched government budgets as it is now.

Our present system of debt and taxes has failed the many homeless and unemployed and despite the apparent wealth of the present baby boomers we are all in for a bleak future until we are able to build strong working families via a healthy system of land tax rather than taxing workers

I believe the new system will be means tested. I did read the figure somewhere, but can't remember the exact details now, however you can bet the Government will have set the figure low enough to catch everyone as land prices rise, provided the USA doesn't lead us into another world war or, as is much more likely, another great and possibly unending depression.

I struggled to build this home and pay it off. I've gone without a lot and still continue to live a very modest lifestyle. My car is 20 years old and I rarely travel anywhere. I only work part time, but for all that I'm very happy with my low income, low expectation lifestyle, however I am a little "old fashioned" in believing that when I die, my home should be sold and divided between my two children. One is struggling to pay off a mortgage, the other can't afford one.

Because of these recommendations, my future looks stark. I am determined not to have to sell my house to subsidise my aged care. I've worked all my life and paid more than enough taxes in that time. I was insulted badly enough when Swan raised the pension age. It looks as though I'll have to take 'exit plan B' while I'm still able to do so in the hope that my demise will allow my children to share in the stingy little bit of financial help they'll get from selling up my house.

Actually (and please correct me if I'm wrong) I seem to remember that when John "jack-boot" Howard introduced or tried to introduce similar changes which would have meant people having to sell their homes to support their aged care, many elderly couples took drastic action and the suicide rate soared to the point whereby Howard had to rescind the legislation.

Look, I'd be more than willing to sell my home to support my entry into an aged care facility when the time comes provided my family was well on their feet, after all, what's the use of a house when you're too old to look after it properly, but since it's not likely that my off-spring will own their own homes by then, I'm damned determined to exit this world before the bloody minded Government and so called "care" organisations force me to sell my home and hand the money over to them. This house and the bit of stuff that's in it is all I have to leave to my kids and by hook or by crook, that's the way it's going to be!

To put this problem in perspective, it is necessary to look at the numbers. Most people will never need residential aged care. For people aged 65, approximately 46% of women and 28% of men will eventually need to move to a nursing home.

http://www.health.gov.au/internet/main/publishing.nsf/Content/ageing-iar-final-report.htm~ageing-iar-final-report-3.htm

The average length of stay is currently 2.8 years.

http://www.aihw.gov.au/mediacentre/2009/mr20090619.cfm

From a 2003 source, 39% of the people who enter a nursing home as permanent residents will have a stay of less than a year

http://www.health.gov.au/internet/main/publishing.nsf/Content/ageing-iar-review-framework.htm~ageing-iar-review-framework-2.htm

These sorts of numbers mean that (purely on the basis of luck) some people escape entirely, while assets are wiped out, including the assets of the partner, for the unlucky few. The situation cries out for a social insurance approach. For the current elderly, this could take the form of a levy on inheritances. In the long term, either government regulated long term care insurance (perhaps as part of superannuation) or an aged care levy on top of the Medicare levy might be the answer. The latter could deal with the problem of private companies going belly up, etc.

Longevity insurance could also help. Currently, in the US, $25,000 paid by a woman at age 65 can buy her $12,000 a year from age 85.

http://moneyover55.about.com/od/insuranceknowhow/a/howtouselongevityinsurance.htm

Why should taxpayers have to fork out tens, or even hundreds, of thousands of dollars to pay for the care of someone who is wealthy enough to meet the cost of their retirement but would prefer to pass their wealth on to their children?

Rhian,

Most care of badly disabled and frail elderly people goes on in families. Half of all nursing homes admissions are for respite care. Very often people are only admitted permanently when the family is unable to cope, because they need specialised care or may be unmanageable due to Alzheimers. Without the family, they would have been admitted years earlier. Currently, people are held responsible for a spouse's nursing home bills, and only have their own assets protected up to $38,500. The house is protected, but only while the spouse is living in it. If he or she has to move out for any reason, nursing home bills are means tested against the house as well. If a son, daughter, or daughter-in-law acts as a long term carer, the relative may get a small pension, but sacrifices his or her own opportunity to acquire superannuation and savings. Currently, the inheritance may partially compensate for this.

Some carers may be willing to act as saints and martyrs, to end up homeless and penniless to help their relative, but such heroic virtue may be beyond most people, who are also often confronted with competing obligations. In the US, there was a documentary several years ago on divorces among elderly people with 50 year marriages when one of them has to enter a nursing home, so that a judge can divide the family property and preserve half for the spouse. I would have serious doubts about whether a user pays policy would really save the government money in the end, because it is likely to inspire the family to give up faster.

Your argument could equally well apply to cancer therapy and other expensive forms of medical treatment for younger people. Why not financially wipe out the family before the taxpayer steps in? In the current arrangements, we all take a relatively small hit so that people don't end up bankrupted through no fault of their own and so that we are protected in case we have to confront an expensive health problem in our own family.

First you get the business or "market share" by offerring the lowest tender, in a nationwide industry whose neccessity is unquestioned.

Second, you establish a reputation as a good supplier.

Third, become "too big to fail".

Fourth, request either a pricing restructure or more government funding, for something that should always have been means-tested.

Not criticising, it just seems like a strategy.

Rusty

Divergence,
The comparison with health care is an interesting one. Tax rules mean that most people on above-average income have health insurance which covers at least some of the cost of their treatment, so there already is an approximate “user pays” system with a safety net for those on low incomes.

You seem to imply that inheriting the family home is some form of compensation for family carers. If so, it is very inefficient. Family members who carry most of the burden of aged care will typically inherit no more than those who don’t. Your logic would also suggest that the offspring of wealthy parents have a greater incentive to care for their elderly parents than those whose parents lived I rented accommodation or a low-value house. Yet I see no evidence of the children of poor parents neglecting their frail parents.

Carers probably deserve a better deal in our society, but surely a fairer system would be to pay them for their efforts and require wealthy retirees to pay for their own accommodation.

An increase in the medicare levy to cover the cost of aged care would be alright if we could be sure the revenue would go directly to increasing quality age care services (more nursing staff, more beds) including community nursing to enable older people to live at home. Or to support families caring for their elderly relatives at home, especially those who are in full time caring roles, unable to work.

As a nation we should also look to cuts in other government spending that might be considered 'waste', ensuring that 'real' public services (to the actual public) are not cut further adding to the perception that the more taxes paid, the less services rendered.

Get rid of baby bonuses, subsidies of any sort and ensure the economy is configured in a way that makes housing more affordable and that people are able to stay at home to raise families or care for loved ones if circumstances demand.

Home care is preferable but it is not always possible, so agencies like Uniting Care are to be applauded for offering their services. I think it is reasonable for a wealthy person to contibute more to their nursing care.

The problem with the current and proposed systems is not that the wealthy are asked to pay, but that middle and working class people with a few savings are squeezed hard. For example,the assets threshold for accommodation charges or bonds is $38,500. This applies to the partner as well and hardly represents princely wealth. Would you like to be facing 20 years of retirement with this sort of money?

A progressive estate or inheritance tax would see to it that people leaving substantial assets would pay out of their estates, without impacting on younger people whose income comes from their jobs, not inheritances from rich parents. Furthermore, the amounts would not have to be oppressive, because (see my first post) the costs would be spread over all estates, not just those of people who are unlucky enough to suffer from Alzheimers and the like. I find it interesting that people with self-inflicted health problems due to obesity, injuries from dangerous sports,smoking, heavy drinking, and other forms of substance abuse get free healthcare, apart from the Medicare levy abd other taxes, while it is user pays for expensive and mostly unavoidable health problems of old age, above and beyond normal accommodation costs.

A better solution in the long run, because letting people control their own money gives them choices and bargaining leverage, might be to raise superannuation to 12% and use the extra 3% to pay for longevity insurance (you get x dollars a year after you turn 85) and long-term care insurance. This would need to be provided by the government or tightly regulated to avoid the abuses that have occurred in the US.

Rhian, I suspect that long-term carers will get better treatment from the government when pigs can fly. Families can and do agree that the relative who provided the care will get more from the estate.

The majority of these negative replies to Lynn Hatfield-Dodds all ignore the important point that at the time the aged care resident no longer requires care, the beneficiaries do get back the bond money apart from a small capped retention fee. Children will get the benefit of their parents scrimping and saving but they also get the benefit of parents in care and comfort for the last period of their lives. It's been said that every Australian has to pay for the roof over their head except for the criminals sentenced to prison.

Nothing in this world that costs someone money comes free. The old adage of there being no such thing as a free lunch applies to aged care as well.

If you have extra resources, if you live in a nice house in a nice area, why shouldn't you be able to enjopy those same standards in your very old age? If you haven't been fortunate enough to be in that category, there will be government assistance to ensure you age in comfort and security. The homeless ageing do need support and not denied it because the Government shares its meagre allocations across all comers. Who ever said everything had to be equal. Reality tells us it certainly is far from that.