Keating calls for HECS-style loans for home aged care at royal commission

Former prime minister Paul Keating has laid out a HECS-style loan plan aimed at covering home care costs for elderly Australians who do not want to go into a nursing home.

Key points:

  • Paul Keating said the Federal Government could give loans to elderly people for home care
  • They would pay the loans back after their death, via their estate
  • An aged care advocate said it might be difficult to implement

Giving evidence to the Royal Commission into Aged Care Quality and Safety on Monday, Mr Keating said a Commonwealth-run post-paid system could reduce wait times for home care packages and ease the financial burden on families.

He likened it to the HECS loans given to university students that are only paid back once they graduate and reach an income threshold.

“The Commonwealth could then advance as loans to every aged Australian so much as to meet their needs in support services to stay at home or alternatively in care accommodation,” Mr Keating said.

“Then, upon your death — and no earlier — there would be a credit to that loan account from the estate of the deceased person.

“The Commonwealth account would then receive a credit … so we’re not forcing anyone out of their home.”

Generic image of an elderly woman's wrinkled hands

Mr Keating previously called for a scheme to help the elderly access aged care services.(ABC Central West: Melanie Pearce)

As of March this year, about 100,000 Australians were waiting for a home care package at the level to which they had been assessed, the royal commission has heard.

“These are aged people; they’re likely to die in the period.”

Mr Keating, 76, has previously called for a scheme to help Australia’s elderly access aged care services.

He was treasurer when HECS was first introduced in 1989.

Loan scheme ‘hard to sell’

Councils on the Ageing (COTA) Australia chief executive Ian Yates told the royal commission he was open to Mr Keating’s loan scheme idea.

“I think at the theoretical level it’s certainly worth exploring … the devil will always be in the detail,” Mr Yates said.

National Senior Australia chief executive John McCallum said the loan idea might be “hard to sell”.

“I think the sort of trouble we’ve had … from a consumer point of view [is] it’s a difficult one to get to understand,” Professor McCallum said.

Little link between funding and spending

The Royal Commission into Aged Care Quality and Safety heard residential care providers receive $12.4 billion from the Federal Government and individuals each year.

However, there are no requirements to spend that money on care.

“Residential care providers’ annual reporting requirements do not adequately reveal how that money is used or what profit or loss is made in providing residential care services,” counsel assisting the royal commission Peter Gray QC said.

A man wearing a suit stands and speaks in a court room

Peter Gray says there should be more rigorous financial reporting around care funding.(ABC News)

Home-care providers receive $2.5 billion from the Commonwealth each year but do not report how they spend it, the inquiry heard.

Mr Gray said a Department of Health survey found in 2018-19 home care providers spent enough for 15 minutes per fortnight on nursing and allied health care, even for the most needy people.

An interim report to the royal commission from accounting firm BDO found some aged care providers were delivering substandard care while increasing profits.

“There is at present no systemic means at which … particular amounts and therefore sufficient amounts of public funding intended for care is actually spent on care,” Mr Gray said.

Aged care homes hold over $30 billion in Refundable Aged Care Deposits (RADs), the royal commission heard.

The bonds are deposited to the aged care provider before someone moves into a nursing home.

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