Aged Care Australia - What do the cuts mean for you?

We've been hearing a lot recently about the federal budget and what cuts will affect aged care in Australia, but sometimes it's a bit hard try to make sense of it all.

NSW, Australia (prHWY.com) July 12, 2012 - We've been hearing a lot recently about the federal budget and what cuts will affect aged care in Australia, and what handouts will benefit it, but sometimes its a bit hard try to make sense of it all. In this article our resident writer Samantha Myers tries to clarify what it all means for the Aged Care sector.

What's Going On in Aged Care Australia?

Despite the $3.7 billion aged care initiative announced in the federal budget in April, they have since clarified that they will be slashing the growth in the funding of nursing home care.

Due to the rising number of ageing and frail residents, in what has led to be called the 'frailty drift', the government have had to cut funding in a bid to stabilize surging costs of aged care sector pay outs.

The promised 6% rise in subsidies that was forecasted by the government has been lowered to a minuscule 2.7% confirms Minister for Ageing Mark Butler.

Some estimates go as far as stating this will cut another $500 million out of aged care spending in order to meet the deficit promise, which has some aged care providers outraged. With July 1 passing, the new reforms have been rolled out, which are estimated to cost nursing homes roughly $57,000 each per year in funding they would have otherwise received.

But Mr Butler said that while the cost growth trend would be more than halved, it would not result in actual cuts to subsidies but rather a ''shaving'' in the growth of future funding for each nursing home resident.

However, Mr Butler has been engaged in talks with nursing home operators, banks and investors to thrash out how the reforms will impact on future financial viability of nursing homes.

In the two months since the reforms were unveiled, ''over $3.5 billion in planned aged care development projects have been shelved'', because of subsidy cuts and uncertainty about capital.

What Do The Changes in Aged Care Funding Mean For You?

So whilst technically the handouts may not be decreasing, the amount set aside per elderly resident will drastically decrease, which in turn will affect the growth of future nursing homes. On a personal note, coming from someone had to put their grandmother on a 2 year wait list for a supported place in respite care - cutting down the growth and development of more aged care homes is not something we as a nation can afford to do.

Without supported placed in aged care facilities, people often must decide whether to sell homes, or liquidate parts of share portfolios to pay for a bond of the aged care facility which run into the $100,000s, in some cases up to $600,000 is required up front. The decision to place a family member in care is a large financial decision that has an impact on the household's wealth. It's a hard time in a family's life, not only dealing with the emotional trauma of having to house a loved one, but often the financial burden is hard to cope with as well and these cost cuts are just about to make it harder.

What can you do?
* Some tips we can offer is when planning for your future and retirement, factor in the costs of how much being put into care my cost you or your family and set some money aside
* Some financial companies and banks have what is called a reverse mortgage, which means they can offer you a loan for your aged care deposit against the title deeds of your home that you only need repay on the sale of the house
* Talk about your options with your family before it's too late, leaving these kind of decisions to the last minute can cause wrong or speedy choices to be made
* Look at the Aged Care homes in your area and consider putting your name down early, you may be fit and able now, but who knows where you will be in 2 years.
When it comes to aged care in Australia it pays to be proactive.

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Tag Words: aged care australia, respite care, aged care

Categories: Health

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