It is “absolute madness” to have the taxpayer fund aged care for those who can afford to pay for their own care through their assets, a professor of health economics has told the aged care royal commission.
Prof Michael Woods gave evidence on Tuesday as the commission turned its attention to transparency around funding of the aged care sector, and how that money is spent.
Woods, from the University of Technology’s centre for health economics research and evaluation in Sydney, said taxpayers currently paid most of the cost of subsidised aged care, but this was unsustainable given the ageing population.
Those elderly who could afford it should be required to pay more for some of the subsidised services that they consumed, he told the commission.
In his witness statement, Woods described how the family home had largely been protected from aged care support means tests, but he told the commission there were fair and equitable ways for Australians who owned their own home to contribute more to the cost of their aged care.
“It’s absolute madness to have the taxpayer, just because a person has got old, suddenly paying for all of these things,” Woods told the commission.
Asked by counsel assisting the commission, Peter Gray QC, if there would be merit in establishing a social security scheme to fund aged care, which people would contribute to throughout their working life, similar to compulsory super, Woods said there were too many uncertainties with such a scheme and little net gain.
“I mean, who knows what state of health a 20-year-old will be in when they’re 85 and whether they might be needing some of these services, or what services will be available by then,” he said.
“What if they still have a partner who can help them? Who pays for those who can’t make the mandatory payment – is it the taxpayer? You are not only are paying your contribution now as a working person, but also paying taxes for [others]. I just think there are too many uncertainties and that there is no net gain.”
Woods also told the commission there needed to be greater transparency around the commonwealth home support program (CHSP), a government-subsidised service to help senior Australians access support services to live independently at home. There was no way to know how many people were waiting for or had missed out on the program, he said.
“There are waiting lists for CHSP … but we don’t know what they are,” he said. “They’re just people who don’t get the service they want or any service at all. And they get something else instead.”
On Monday, the former prime minister Paul Keating told the commission he supported people funding their own care through their assets because superannuation was no longer enough as Australians lived longer.
Keating proposed a “post-paid” funding model where the commonwealth would provide aged care loans that would be repaid through people’s assets after their deaths, including through the sales of property and shares and through any unused superannuation.
