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Australia’s outgoing aged care watchdog has warned the rollout of Labor’s new system is harming older people and deterring them from getting care at home, which will worsen the country’s budget troubles by pushing people into residential aged care sooner than necessary.
In a pointed intervention before leaving her role next month, aged care inspector-general Natalie Siegel-Brown used a speech to argue that user co-payments, long wait times and system complexity for home care packages were undermining the Albanese government’s reforms.
She called for a rethink of the new user co-payment model in home care – which charges users for services such as cleaning, gardening and social activities – and argued the government’s emphasis on building more aged care beds was misguided.
“I see us keep trying to build our way out of a problem we are designing our way into,” Siegel-Brown told the National Press Club on Wednesday.
In her opening remarks, Siegel-Brown said Labor should be commended for introducing a new Aged Care Act built on the powerful idea that every older person is entitled “not just to care, but to dignity, respect, connection, individuality and cultural safety”.
“But a promise on paper is not the same as a promise realised,” she said. “And this is what I want to share with you today: As Inspector-General of Aged Care, I cannot see how our system is geared to deliver that promise.
“In some cases, I would go further: the way aged care reform is being implemented is causing harm. And that doesn’t just cost people their rights, it costs the taxpayer as well.”
Labor’s new aged care system came into force last October, acting on many of the recommendations of the 2021 royal commission. Funding was overhauled to make wealthier Australians pay co-contributions for their care to meet the growing budget pressures of an ageing population.
“At the heart of the aged care reforms is a very defensible idea: Those who can afford to contribute should, to ease the burden on those who cannot,” Siegel-Brown said. “But that is not the system we have built.”
Under the new model for home care, clinical needs are fully funded by government. Users then pay co-contributions for services that help with their independence and daily living, such as meals, transport and social participation. Fees increase based on a person’s means.
Aged Care Minister Sam Rae defended the government’s handling of the $47 billion sector, saying it had given more access than ever to in-home care, tripling the number of older Australians with a package since 2020 and putting people’s rights at the centre of a system that had been neglected.
Home care participation has grown by 300 per cent since 2017, compared to 10 per cent growth in residential aged care, according to government data.
“While we know there’s much more to do, our aged care system is on a stronger, more sustainable footing as a result of our reforms and we’ll continue to work to strengthen it as our generational reforms bed down,” Rae said.
“Labor has committed to listen and respond to the experiences of older people in order to improve the aged care system on an ongoing basis.“
Labor has already tweaked the new regime by assigning showering, dressing and continence care to clinical funding after reports that people were forgoing these services when they were required to pay between 5 per cent and 80 per cent of the costs.
But Siegel-Brown said it needed a broader reset. “What is in clear, stark relief for me is the fact that the way it’s being implemented is actually placing the greatest cost burden on part and full pensioners who are the highest users of the system,” she said.
“We need to redesign and rethink the way we are applying co-payments.”
Otherwise, she said the scheme was sending a message that social interactions didn’t matter as much as clinical care. “That connection is optional, and priced to be the first thing people give up,” she said.
Because people ended up paying for the services they needed, it also meant people with the highest needs paid most – not just those with greater means to pay.
“Basic economics tells you what happens next. The person most likely to walk away from care is the person who needs it most,” she said.
“If we are effectively pricing people out of the very care that is designed to keep them independent at home, we are likely pushing them towards something far more expensive to the taxpayer: residential care.”
Residential aged care costs the government an average $123,000 per person each year, compared to the $30,000 average bill for home care.
“That is the design failure. Eventually, the system does respond. But when it does, it does so at far greater cost. Long wait-times and long waitlists are deferred costs, with a higher bill.”
Siegel-Brown said long queues for home care had become the greatest risk to the budget.
“People don’t disappear from the system when they wait, or even when they give up on it. They come back. And, when they do, they’re sicker and most often, they need more expensive care,” she said.
“More than 200,000 people are now effectively stuck at the front door of the system. And in that wait, decline accelerates… We move from supporting someone at home – perhaps footing a pensioner’s co-payments to the value of $200 a week – to paying over $2000 a week once they have prematurely or avoidably entered residential care.”
Health Minister Mark Butler has previously said one of the greatest barriers to getting more home care packages online was limited workforce capacity. He has said Australia needs to open a new aged care facility every three days for 20 years to meet demand.
Siegel-Brown, however, said home care supports included community transport, social participation, meal preparation and cleaning – services that involved a workforce much easier to recruit and mobile.
She said the push to solve aged care by building more beds was one of the “biggest misconceptions”.
“The real question should be: how do we stop generating that demand in the first place? We already have clear Australian evidence that when people are properly supported to stay at home for longer, it roughly halves the rate of entry to residential aged care,” she said.
“The most important lesson here is that better outcomes do not come from bigger budgets. They come from spending the money more intelligently.”
Natassia Chrysanthos is Federal Political Correspondent. She has previously reported on immigration, health, social issues and the NDIS from Parliament House in Canberra.Connect via X or email.From our partners
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