Flogging the home to pay for care

equity_729-420x0You might remember the aged care reform undertaken by the Rudd/Gillard/Rudd Governments. You may also remember the Productivity Commission report recommending that aged care recipients reverse mortgage their homes. Everyone was all gung-ho about this idea, particularly aged care providers (but also the Government), until Treasury stepped in and said something to the effect of “In your dreams”, or “You’re kidding yourselves if you think the Government would, even if it could, underwrite the extremely risky reverse mortgages on, eventually, the majority of residential real estate in Australia”.

Maybe you also remember that COTA Australia supported the Productivity Commission’s recommendation for reverse mortgages funding the aged care sector (here’s their submission: submission_caring_for_older_australians). COTA, ostensibly a consumer rights organisation, formally allied itself with aged care providers to campaign for reverse mortgages. If you do remember that, you might also remember CPSA outing COTA as having a massive conflict of interest because of the way it chose to campaign on aged care: getting into bed with aged care providers and running “community consultation” sessions for the Government, on which it reported and said that consumers also thought reverse mortgaging their houses for aged care was a great idea.

COTA is still calling for the discredited reverse mortgage option to be resurrected. COTA is still formally allied with aged care providers. To top it all off, it recently appointed Chris Rigby, CEO of aged care provider Scalabrini Village (which owns and operates a string of nursing homes) to its Board of Directors. If that doesn’t make you feel nervous as an aged care consumer, we don’t know what will!

Still, apart from the occasional stomach rumble, COTA had been relatively quiet about aged care. Until recently, that is.

On 1 December, The Australian reported that “Any move to plug a $6 billion hole in the National Disability Insurance Scheme with money from the aged care system would be fought ’without relief‘ by the sector and could lead to a funding crisis” (Battle looms on National Disability Insurance Scheme shortfall – Rick Morton).

The reported source of that observation? ‘A chief executive of one national aged-care group’.

Again on 1 December, The Australian reported COTA CEO Ian Yates as saying “We need to have means testing and proper targeting across care whether that is in the NDIS or the aged-care system. If we are looking at a way to fix that interface then it has to take into account the principle that people who have the capacity to pay should pay” .

Quite apart from the fact that no one had suggested that the NDIS should be funded with aged care money, it is curious to see COTA Australia breaking away from the care advocacy consensus that a disability is a disability regardless of its cause (congenital, acquired or age-related) and therefore care should not be split up or provided on the basis of cause.

The only thing in Mr Yates’ reported comments which recognises that there is no difference in aged care and other disability care is on the question of funding: people who have the capacity to pay, should pay.

But, generally speaking, people in need of disability care do not have the capacity to pay. They’re lucky if they’re able to feed themselves and keep a roof over their…. Aha! Could COTA Australia be saying that people on the NDIS should also reverse mortgage their home, just like people who need aged care?

Image: Domain, Fairfax media: news.domain.com.au/domain/real-estate-news/reverse-mortgage-pros-and-cons-20110603-1fjcl.html

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One response to “Flogging the home to pay for care

  1. The onset of the ageing population in the developed world and the increasing cost of care is making this type of event more and more common. People are being forced to sell their family home to pay for serially nursing home bond amounts. It is an issue that is not attracting enough attention from the government to make any real difference.

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