Tuesday, 25 October 2011
Combined Pensioners and Superannuants Association is holding its annual conference on 25 October 2011.
Policy Coordinator, Paul Versteege, will deliver the conference's main policy speech on aged care. The speech will deal with the impact of the Productivity Commission's recent aged care funding proposals, and will be critical of the way mainstream media have reported on this issue, ignoring or failing to notice:
- that the Labor Government did a policy u-turn on aged care;
- that the seemingly unified sector response is carefully orchestrated through the National Aged Care Alliance;
- that the consumer voice has been drowned out in the debate.
The text of the speech is appended.
Paul Versteege will be available for comment following the speech and the questions & answers following it.
CPSA represents pensioners of all ages, superannuants and low-income retirees. CPSA has 137 Branches and Affiliated Organisations, with a combined membership of 31,000 people.
Media Contact: Paul Versteege, Policy Coordinator, CPSANSW
Speech to the CPSA 2011 Conference
25 October 2011
Paul Versteege – Policy Coordinator, Combined Pensioners & Superannuants Association
I want to talk to you about aged care and how the Australian Government wants to sell your house to pay for it.
Despite strenuous denials by the Productivity Commission following the release of its Caring for Older Australians report that no one will have to sell their house to access aged care, everything hinges on the Commission's proposal for care recipients' principal residences – the family home – to be included in the aged care means test.
The Commission's proposals are for nursing homes to be able to charge market-based accommodation charges and also for care recipients to pay a life-time maximum of $60,000 in care charges, whether care is delivered either in a residential aged care facility or at home.
For most people this will mean either selling the family home and putting the proceeds in an Australian Age Pensioners Savings Account or it will mean reverse mortgaging the family home through the Australian Aged Care Home Credit Scheme.
Technically, you don't have to sell your house, but practically you do, otherwise you won't get aged care.
This is for any type or form of aged care. So, if you need your lawn cut and can't afford Jim's Mowing, the Government has a nice little reverse mortgage for you.
While the reverse mortgage option may seem benign as it allows partners of care recipients to keep living in the house after the death of the care recipient, if a surviving partner needs or wants to move, the house gets sold to pay the aged care debt. In other words, the surviving partner is tied to the house and can't downsize to age-friendly housing. Even a minor incapacity, like not being able to negotiate steps, will see the surviving partner off to a nursing home where market-based accommodation charges will soon finish off the remaining home equity.
Portability of the debt created against the family home under the Australian Aged Care Home Credit Scheme would address that, but the Commission has not bothered to include that feature, probably because its efforts have been dollar-centric as opposed to people-centric.
This undisguised grab for older Australians' home equity is unfair. It takes away, whether it's in one fell swoop or gradually, the security older Australians have worked all their lives for, paying down that mortgage over 25 or 30 years. That security is taken away at the psychological level, but, in the case of surviving partners, at the physical level as well.
Talking to the media, especially reporters in the 20 to 40 age bracket, I have noticed animosity towards older Australians wanting to keep their home. It is frequently expressed in the question: 'What about all those pensioners in million-dollar homes?'
Let me tell you, there are very few pensioners living in million-dollar homes.
To younger Australians who have difficulty buying their own house I say: your elders had the same battle as you are experiencing now; do you really want them to lose what defines them?
I just mentioned the media's obsession with non-existent million dollar pensioner homes. I have a beef with the media when it comes to their reporting on aged care reform proposals. In fact I have five.
First, the media has failed to scrutinise the stunning U-turn the Labor Government has done on aged care.
The Government resisted aged care providers crying poor and calling for the extension of accommodation bonds for years and years.
It then announced an inquiry by the Productivity Commission into aged care and it now warmly embraces the principles on which the Commission's aged care funding proposals rest, as do aged care providers.
The media largely and blissfully failed to note the sea change in aged care policy that had taken place and failed to question the Government on its about-face, taken in perhaps by the ubiquitous line that we have an ageing population and how annoying and expensive that is.
Second, the media largely failed to notice that of the two Assistant Commissioners helping Productivity Commissioner Mike Woods write his report Caring for Older Australians, one was on the Board of Directors of a Sydney-based aged care provider and one had a long career in aged care nursing.
There was no Assistant-Commissioner from a consumer organisation. Why not? Did the supposedly independent Commission have its riding orders and would the presence of a consumer rep have complicated their execution?
Third, it would have taken only a few minutes online for the media to have understood the neat little snow job the Government put together with the help of the National Aged Care Alliance (NACA). A national alliance, what could be more trustworthy?
Here's how trustworthy the National Aged Care Alliance is.
According to the National Aged Care Alliance's website, it has twenty-seven members.
Eight members are big aged care providers. Two are peak organisations representing aged care providers.
Twelve members are organisations representing various medical interests in aged care and there are two unions, which look after the interests of aged care employees.
So out of twenty-seven members, twenty-four are preoccupied with delivering care, while the remaining three are there to look out for care recipients. They are:
- Council on the Ageing (COTA);
- Alzheimer's Australia;
- Carers Australia.
As a condition of membership, members of the National Aged Care Alliance must adopt Alliance policy positions. They have input into policy development, of course, but once policy has been set, all members are bound by it.
It goes without saying that in an organisation dominated numerically and financially by aged care providers, the aged care providers' preferred policy positions will prevail.
The National Aged Care Alliance has a long history of relentlessly pushing for the current bond arrangements for low care to be extended to high care.
So the Council on the Ageing, Alzheimer's Australia and Carers Australia have some explaining to do. Or rather, the media should ask these three organisations for an explanation, because it's not going to be volunteered.
Why are they part of an alliance dominated by aged care providers and the people that work for them? Why have they placed themselves under a contractual obligation to adopt the policy positions the National Aged Care Alliance adopts? Why have they allowed themselves to be co-opted by business interests?
The Council on the Ageing has some further explaining to do.
The Minister for Aged Care, who has indicated his support for the thrust of the Productivity Commission's proposals, has described the National Aged Care Alliance as the main stakeholder for the Government to deal with.
As a direct result of this curious declaration, the Minister picked the Council of the Ageing, an Alliance member, to organise community consultation meetings about the Productivity Commission's proposals.
How genuine is this community consultation going to be given the Council on the Ageing's policy position and its membership of the National Aged Care Alliance? How can we be sure the report that comes out of this consultation reflects community and consumer thought on the issue?
Fourth, the media reported that the industry unanimously supported the Productivity Commission's proposals.
Not so.
Those industry voices were National Aged Care Alliance voices from National Aged Care Alliance members who were bound contractually to come out with the same line and welcome the report. Those industry voices were just one voice and they articulated the aged care provider line in unison.
The voice of the Combined Pensioners and Superannuants Association condemned the Productivity Commission's proposals.
National Seniors Australia, which has an actual membership of 250,000 and does not belong to the National Aged Care Alliance, voiced concerns about the grab for seniors' home equity and the recommendation that would allow nursing home operators to charge what they like.
Consumers, the people affected by these proposals, don't like these proposals at all, never mind what the Council on the Ageing, which claims to speak on behalf of 500,000 older Australians, says.
Incidentally, the media might want to ask the Council on the Ageing how they arrived at that number, which is certainly not the number of the Council's memberships, although, curiously, it is double the number of actual National Seniors Australia memberships. Bit of rivalry perhaps?
Fifth, while the media has been lazy in the way it has reported how the Productivity Commission's report was received, there has also been a dearth of analysis of the Commission's proposals.
Aged care reform as it has been proposed by the Productivity Commission is for the greater part dependent on a reverse mortgage scheme covering potentially over a million residential properties with debts raised against them up to almost their full value, regardless of where these properties are located.
The current number of commercially provided reverse mortgages is about 40,000 with an average loan size of $72,000. Lenders will not lend in excess of 60 per cent of house values in good areas.
The Australian Aged Care Home Credit Scheme would be a monster and have a potential for administrative disaster and disaster in terms of human impact, particularly if privatised, that would make the pink batts scheme look like a walk in the park.
On behalf of the Combined Pensioners and Superannuants Association and in the interest of quality aged care at an affordable price, I beg the media to get its act together.