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Overdue overhaul of Australia’s aged care system

The current aged care system has failed many senior Australians and providers for years. By participating in the Royal Commission into Aged Care Quality and Safety, we have contributed to the important ongoing process of industry improvement. We were pleased to see our ideas reflected in many of the commission’s recommendations.

Principles to underpin the design of a fairer system

To support development of a better aged care system that is appropriate to the needs and wishes of all Australians, it is proposed that the following principles should underpin the design of a new financing approach:

  • Quality
  • Respect and dignity
  • Equity
  • Transparency and accountability
  • Sustainability
  • Responsiveness and innovation
  • Streamlined and accessible

Overall, the system that is required is one in which people can access the services they need without delay, with costs and quality standards that are transparent and providers that are accountable and responsive to the needs of people using their services and who will work with them to innovate and drive efficiencies that will enhance sustainability without compromising agreed standards. To achieve these goals fundamentally the system needs to be less complex. The role of the Commonwealth Government is to provide the environment in which that can occur and to ensure the system is fair and equitable.

The principles we proposed can be seen in many of the recommendations, particularly:

  • Recommendation #8: A new aged care programme – designed to be more streamlined, accessible and equitable.
  • Recommendation #9: Meeting preferences to age in place – clearing the waiting list for home care packages and allocating funding and services in ways that are responsive, sustainable, transparent, accountable, equitable and high quality.
  • Recommendation #20: Planning based on need, not rationed – proposes a funding approach that is equitable, respectful, supportive of dignity, sustainable, responsive, streamlined and accessible.
  • Recommendation #82: Immediate changes to the Basic Daily Fee – proposes a boost to fees from 1 July 2021, on condition that providers report on, and accept accountability for, high quality services.

Home Care Packages: limitations in the current model

As the Royal Commission has heard, in 12 months more than 16,000 people died waiting for a home care package. For others, a lack of access to supports has resulted in premature entry into residential aged care. Rationing of packages is out of step with community preferences, denying people access to supports that may allow them to stay home. This impacts quality of life, particularly for those without family or friends to help fill the gap.


For many the expectation of home care is that you simply “order in” the care you need. In reality accessing a home care package is a test of patience, resourcefulness and forensic accounting. You need patience during the long waits for assessment and for care to start; resourcefulness in finding services, volunteers and family members to fill in the gaps; and forensic accounting to determine whether or not you are getting a good deal.

Administration and case management are services that providers must deliver; without them the package doesn’t operate. But they are tasks that are largely invisible, making it difficult to know what is really involved and easy for unscrupulous operators to gouge their customers.

How much care the person can receive with the net funding will depend on where they live, the type of care and services they receive and who provides it.

Care providers who employ care staff have a vested interest in using their own staff to provide care and services which in theory has the potential to offer economies of scale. In practice, consumer choice is often restricted to the services (and rostering availability) of the employed carers with an hourly rate for the services that is far greater than the cost of wages.


A significant concern is the home care package fee structure. Older people are expected to contribute towards the cost of their package which includes a basic daily fee based on the level of package and an income-tested care fee which is calculated by Centrelink.

The costs associated with a home care package can result in affordability issues for low income pensioners. The basic daily fee can amount to 15% of annual income, even without considering expenses associated with daily living or any other supports older people might require but cannot access through their home care package. It is possible that older people may not be able to afford the fee contribution which in turn may become a barrier to accepting a package.

Disparity between Home Care and Residential Aged Care Funding

When you crunch the numbers on the funding models it becomes clear that people living in residential aged care receive more funding for care than those receiving home care.

At the ultimate amount the funding for someone receiving a home care package is just over $192/day while the care funding for someone (potentially the very same person) in residential aged care is around $256/day, that’s more than 34% additional funding for your care based on where you live.

Similarly the converse can also occur, a person with dementia may receive a higher amount of funding through a level 4 Home Care package (with the dementia supplement) than an aged care facility can receive through the Aged Care Funding Instrument (ACFI).

These disparities in funding raise a number of questions, including why the funding arrangements are different, whether it creates a necessity for some people to enter residential aged care when if the funding was the same they could afford to stay at home and whether the funding, particularly as it relates to dementia behaviours restricts access to residential aged care for some.


Current Home Care Package limitations are tackled head-on by the recommendations:

  • Disparity of funding for people receiving care based on whether they remain at home or move to residential aged care service is removed by Recommendation #89: Maximum funding amounts for care at home.
  • Transparency and affordability are the focus of both Recommendation #93: Standardised statements on services delivered and costs in home care, and Recommendation #96: Fees for care at home.

The recommendations make a point of separating fees for care at home, including respite care, from fees for domestic assistance, social supports, assistive technology and other costs. This may assist with some of the pricing anomalies that we draw attention to in the issue of disparity and affordability. It will all depend on the details of the implementation.

Our vision is of a system that offers older Australians a true choice between receiving care at home and moving into residential aged care. In the current situation, too many are forced to move into residential care because they cannot access sufficient government funding or cannot afford the user contributions.

Concluding comment

If an expert is required to assist an older person to successfully navigate the aged care system, then it is by definition failing to meet the needs of all. While we believe that there will always be value in seeking expert advice, a simpler, more user-friendly system with a higher standard of accountability and transparency is needed. Whether the proposed recommendations can achieve this remains to be seen in the implementation.


As the Principal of Aged Care Gurus, Rachel Lane was invited to contribute to the Commissioner for Senior Victorians’ submission to the Royal Commission into Aged Care Quality and Safety. This is a summary of that submission and its recommendations. You can view the full paper here.


March 03, 2021

Grateful for Rachael's analysis. Adequate aged care is a no brainer for the aged (and those who hope they would be).

The recommendations and the government response are overdue. In moving forward, money - lots of it - is just one part of the solution which the Government has promised. Necessary, but not sufficient.

The underlying problem which the system ignores: in twilight time humans need loving and affectionate care, and professional outfits can only approximate to this ideal clinically. They cannot require those who serve the aged to love and care for them as kith and kin. We cannot build the aged care model based on honourable exceptions.

So why do we, as the default option, permit offspring who owe their life and comforts to their parents by and large to outsource their care, thinking of it as another utility purchase? Parents unable or unwilling to care are rightly shamed as unfit. Uncaring children get off free, waiting for the reading of the parental will.

Barring cases where external care is the only option, children’s care of parents should mitigate the structural excesses perpetrated on exploited elders. If in doubt, ask what the elders would prefer. Better still, ask the current generation of adult kids what would they prefer if and when they reach old age.

If this is western civilisation, it badly needs a Confucian jab intermittently injected to fight the ancient strain of parental agnosticism virus, thereby repudiating Kipling-like deniers of the eventual coupling of cultures of the east and west.

David Williams
February 25, 2021

Well said, Rachel. I suggest the task is even bigger than just aged care. There is compelling evidence that preventive action on all the factors which contribute to ageing will make a huge difference to the ultimate load on our aged care systems and personal quality of life.

There are at least two major impediments to making the best of what we already know:

1. Actions which impact on a healthy and meaningful longevity (the rest of our life) are driven from within bureaucratic silos.

Just think Treasury (super, tax and financial advice), Health (hospitals, health care, medicines, and sadly, aged care) Employment (older employment, discrimination), Social Security (age pensions, disability, housing and communities).

More effective co-ordination will bring with it major savings plus quicker and better outcomes. We should be aiming for a bipartisan agreement on a Longevity Strategy to provide the co-ordination needed for truly holistic solutions.

2. People are typically ignorant about ageing. We must invest in longevity education from midlife. Properly informed people will make decisions which will benefit them and their community. We have spent a bundle on financial literacy, but the real bottom line is improving longevity awareness - what could the rest of my life look like and what can I do about it. Time considerations underpin most financial decisions anyway. We need to get the time dialogue upfront.


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