# Presentation: 773484

## Ageing and Aged Care in Australia

- Andrew Stuart
- First Assistant Secretary
- Ageing and Aged Care Division
- Australian Government Department
- Of Health and Ageing

## Organisation chart

- Parliament

- Minister for Health and Ageing

- Minister for Ageing

- Parliamentary Secretary

- Department of Health and Ageing

- Ageing and Aged Care Division

## Australian Government Ageing and Aged Care program objectives

- To support healthy ageing for older Australians and quality, cost effective care for frail older people and to provide support for carers

## Australian demographics

**Total population**
- 20,790,917 at 26 March 2007 (Australian Bureau of Statistics estimate)
**Population aged 65 years and older**
- 2001 census:  2.4 million people (12.6% of the population)
- By 2021:  expected to be 18% (4.2 million people)
- In 2051:  expected to exceed 25% of the population (6.8 million people)

## 70+ and 80+ age group

- Population growth will
- be even more dramatic
- in the “older old”.  The
- 80+ age group will
- double over the next
- 20 years.

## Why is this happening?

**     ****Declining birth rates**
-   3.5 births per female in 1960
-   1.7 births per female now

**Life expectancy has increased**

*Females*
- 1971:    74.5 years
- now:     81.5 years

*M**ales*
- 1971:   67.8 years
- now:    75.9 years

## Strategic approach to ageing

- Support positive attitudes to ageing
- Break down barriers to continuing workforce participation
- Encourage financial security
- Assist people to stay in their homes
- Provide high quality care for frail older Australians

**Notes:**
TALKING POINTS

Negative or uninformed attitudes can act as barriers to older people’s lifestyles, their capacity for social and economic participation in the community, and their quality of life and health.

The benefits of paid work for mature people are many – they can maintain independence, interact socially and improve their financial security.

Workforce participation rates are influenced by numerous factors, including individual choices and employer and community attitudes.  The challenge for employers is to better tailor or customise the final years of working life – offering more choice and flexibility in the workplace so mature age workers can consider options such as phased retirement, job-sharing and part-time work.

## Supporting older

- Treasury, Employment, Health and Welfare Departments undertaking initiatives
- Public and private pensions funded from taxation and private sources
- Mature Age Employment and Workforce Strategy to support continuing employment
- Welfare reform to address employment needs of income support recipients
- Support and recognition older people for their ongoing contribution to the community.

- Australians in the community

**Notes:**
TALKING POINTS

The Australian Government’s 2006 reforms on removing complexity and encouraging participation in the Australian superannuation system:
  Make superannuation benefits tax-free for people aged 60 and over   who have paid tax on their contributions and earnings;
  halve the pension assets test taper rate;
  introduce simplified pension rules, which will allow people to draw   down their superannuation when and how they want to;
  extend the co-contribution to the self-employed and allow the     self-employed to claim a 100% deduction for all contributions;  and
  proceed with wholesale simplification and streamlining of    superannuation taxation, superannuation contribution rules and    superannuation payment rules.

## Aged Care at a Glance

- In 2005-06:
- 1,000,000 people received some form of aged care supported by Australian Government funding
- The Australian Government spent $7.1 billion on aged care

**Notes:**
TALKING POINTS

In 2005-06 about one million people received some form of formal, government subsidised care. That’s about 5% of the total Australian population and about 50% of the population aged 70 years and over. The Australian Government spent $7.1 billion on aged care services. 

The aged care budget represents about 3.5% of the total Australian Government Budget and about 0.73% of GDP.

## Ageing in place

- Ageing in place is an essential element of the Australian Government’s policy mix.
- It helps people stay longer in the community:
-   Support for carers
-   Care packages in retirement villages

- It also provides continuity in residential care:
-   People who entered residential care at low level   can stay in the same facility as their care needs   increase

**Notes:**
TALKING POINTS 

The concept of ageing in place is central to the government’s aged care policy mix. 

Retirement villages rarely provide the kind of services required by frail elderly people. This means that residents of retirement villages often have to leave when their care needs begin to increase. Targeting community care packages to people living in retirement villages helps them remain in their retirement homes.

Those who do need to enter residential care can stay in the same facility as their care needs increase from low to high. This was not possible before 1997 when the high care and low care sectors were administered separately.

## Aged Care – what is provided

- Two types of care:
*residential* (in purpose-built facilities owned by the provider);  and
*community* (person remains in their own home)
- Two basic levels of care:
*low* - assistance with laundry, personal care (such as washing, hair brushing, dressing), house cleaning, etc
*high* (nursing care services)

**Notes:**
TALKING POINTS
Aged care is provided in residential settings as well as in people’s homes. 

Two basic levels of care are available: 
  Low level care comprises personal care services such as assistance     with activities of daily living – laundry, personal care, house cleaning    and so on;  and
  High level care comprises the personal care services available in low   care as well as nursing care services such as medication management   and wound management.

## Aged Care – what is provided

|  | Residential | Community |
| --- | --- | --- |
| Highcare | Facilities providing   high level care    (“nursing homes”) |   Extended Aged Care at    Home (EACH) package;
  EACH Dementia |
| Lowcare | Facilities providing low level care (“hostels”) |   Community Aged Care Package (CACP);
Home and Community Care (HACC) (with States) |

**Notes:**
TALKING POINTS
The table shows that both high and low level care are available in residential settings and in community settings – that is in people’s own homes. 

Low level care in the community is provided through the Community Aged Care Package (CACP) program and the Home and Community Care Program (HACC). The intention of both programs is to keep people in their own homes for as long as possible, in line with most people’s preferences. The Home and Community Care program is jointly funded by the Commonwealth Government and state governments on a 60:40 basis. State governments are responsible for service delivery.

High level care in the community is provided through the relatively new Extended Aged Care at Home (EACH) programs. EACH was established in 2002-03 after a lengthy pilot period and EACH Dementia commenced in 2005-06. EACH Dementia packages are tailored packages of care for people with complex needs associated with dementia who wish to remain at home and are able to do so with the help of the package. 

The residential care sector provides low level and high level care. Since a major restructuring in 1997, residential care facilities have been able to provide both levels of care, although there are some facilities that specialise in high care (“nursing homes”) and some that specialise in low care (“hostels”). 

## Australian Government budget, Ageing and Aged Care, 2006-07 ($million)

**Notes:**
TALKING POINTS

Although community care is one of the fastest growing programs, it is still overshadowed (in terms of expenditure levels) by residential care, as are all the other major aged care programs. 

## Estimated Australian Government subsidised aged care recipients, 2005-06

- Includes some younger disabled people.
- Some clients received more than one type of care within the year.
- Does not include information services and care under the National Respite for Carers Program.

**Notes:**
TALKING POINTS 
Almost 200,000 people (or 10% of all people aged 70 years or more) received residential care in 2005-06. The average age at entry to residential care is about 82 years and about 70% of residents are women. 
Around 3,400 people received high level care in the community through the EACH programs. Of these 340 received care through the specialist EACH Dementia program. 
Around 45,000 people received low level care in their own homes through the Community Aged Care Package program. 
The average age at entry of people receiving community care through the EACH and CACP programs is about the same as in residential care and, again, about 70% of recipients are women. 
By far the greatest number of older people receiving care received it through the Home and Community Care program. In 2006, almost 800,000 people received Home and Community Care services with the majority of these receiving low intensity support services such as Meals on Wheels, and domestic assistance. The HACC program is not solely an aged care program. It is also targeted to younger people with disabilities who are living in the community. Nonetheless 68% of the people who received HACC services are aged 70 years or more. 
Transition care is targeted to older people who’ve had a recent acute care episode and who have been assessed as likely to benefit from a short period restorative care. It is a new program and is currently being evaluated.

## Growth in community care

**Notes:**
TALKING POINTS 

Community care is one of the fastest growing programs. For example, in the mid 1990’s there were fewer than 5000 Community Aged Care Packages – there are now around 37 thousand with further increases being planned.

Community care is most people’s preferred option. From the Government’s perspective it is also be more cost effective than residential care. 

## Community Care expenditure

## Support for carers

**Notes:**
TALKING POINTS
Supporting carers enables frail elderly people to live in the community longer. 
Programs providing support for carers are also growing rapidly. 
The National Respite for Carers program includes a number of components, including:
  500 services provide respite in community settings;	
  Carer resource centres provide information and support to carers.
The Australian Government also provides Carer Payments which are a form of income support for people who are unable to participate in the workforce because of carer responsibilities – applies to carers of people with disabilities as well as cares of the frail elderly – administered by Centrelink and the Department of Families, Community Services and Indigenous Affairs.

## Community Care Packages

- Supply of Commonwealth-only places (residential and community care) is governed by a population-based provision ratio)
- Overall provision ratio of 113 places per 1000 people aged 70 and over, made up of:
- 	-  44 high care residential places
- 	-  44 low care residential places
- 	-  25 community care packages
- HACC growth is determined through triennial agreements between the Commonwealth and the States

**Notes:**
TALKING POINTS
The provision ratio caps the number of subsidised operational places at 113 for every 1000 people aged at least 70. 
The balance of care ratios require that of these 113 places, 
-	44 should be residential high care places, 
-	44 should be residential low care and 
-	25 should be community care packages of which 4 are high care EACH or EACH D packages. 
Provision ratios have been used since the late 1980s, and have been changed from time to time to adjust the balance between community care and residential care and to increase overall provision. Generally the rebalancing has been in favour of community care. The most recent change has been to increase the community care component from 20 to 25, while maintaining residential care supply at 88. 
The use of provision ratios to determine supply – and hence Government expenditure – is rare at both the Federal and state levels as it effectively requires an open ended Budget appropriation. The only other major program to employs a demand based mechanism is Medicare which provides universal health care. 

## Who pays?

|  | Total av. cost per place per year | Average share
(individuals) | Average share (Aust. Govt) | Average share 
(States) |
| --- | --- | --- | --- | --- |
| Residential high care | $59,600 | 26% | 72% | 2% |
| Residential low care | $30,900 | 50% | 50% | Nil |
| High Care at Home | $39,600 | 4% | 96% | Nil |
| Community Aged Care Packages | $13,500 | 13% | 87% | Nil |
| Home and Community Care | Variable | Optional | 60% | 40% |
| Other programs | Variable | Optional | 100% | Nil |

**Notes:**
TALKING POINTS
The table shows the extent of user charging across the major programs. 

In residential care – high and low – residents make out-of-pocket contribute towards the cost of their care and the cost of their accommodation. Whereas in community care their out-of-pocket contributions are solely for the provision of care. This explains, in part, the differences in the Government’s reliance on user contributions.

Even so, there is little consistency across the programs - rationalisation within community care, within residential care and between community and residential care is currently an area of interest, with some measures under investigation and others recently implemented.

## User charges in residential care

- Daily care fees – based on resident’s income
- Basic daily care fee
- Income-tested care fee
- Accommodation payment – based on resident’s assets
- Accommodation bond in low care and in extra service places
- Accommodation charge in high care
- Government assistance for residents with few or no assets
- Extra Service fees
- Extra Service places provide higher standard ‘hotel type’ services
- Financial hardship assistance
- A safety net for residents who cannot afford their costs due to circumstances beyond their control

**Notes:**
TALKING POINTS
Care fees
Daily care fees based on the amount of a resident’s income
Everybody pays the basic daily care fee – two rates
Pensioner rate – 85% of the basic single age pension
Non-pensioner/self-funded retiree rate is higher (equates to pensioner rate + pensioner supplement that the Government pays providers for pensioner residents)
Income-tested fee – 25% in every dollar of non-pension income over income free area of $128 per fortnight (single resident)

Accommodation payment
Accommodation payments based on the resident’s assets at date of entry to care
Resident must be left with minimum amount of assets after paying the accommodation payment ($33,000 currently)
Accommodation bond payable in low care and extra service (both high and low care)
Accommodation charge – daily charge paid by residents in high care calculated on resident’s asset level at date of entry to care.
Government pays a supplement to providers on behalf of residents with few or no assets.
Concessional resident supplement paid at two levels as an incentive for providers to take financially disadvantaged residents.

Extra Service
Extra service homes provide higher standard of accommodation and ‘hotel type’ services.
Extra service fees do not buy a higher level of care as the standard of care is the same in all Australian Government funded aged care homes.
Extra service fees are approved by the Department and paid in exchange for an agreed list of ‘extras’.  
Extra service fees range from less than $10 per day to over $100 per day.  
There is no cap on the amount of extra service fees. 

Financial hardship assistance
Financial hardship assistance is available for residents who cannot afford their care or accommodation costs.
Care fees can be reduced to assist with care-related expenses. 
Government can pay a daily supplement to providers in lieu of the resident making an accommodation payment.

## Quality framework

- The Australian Government has in place a quality framework for residential aged care services which includes:
-   Accreditation of Residential Aged Care Homes
-   Monitoring, including spot checks
-   User Rights
-   A Complaints System
-   Building Certification
-   Police Checks
-   Compulsory Reporting of Abuse

**Notes:**
TALKING POINTS
Accreditation
 All Australian Government-funded residential aged care homes must be accredited   to remain eligible to receive Australian Government funding.  
 Accreditation is intended to instil a culture of continuous improvement in aged   care homes.
 Aged Care homes have a responsibility to meet 44 quality of care and quality of   life outcomes for each of their residents under the four Standards, including:
   -  management systems, staffing and organisational development;
   -  health and personal care;
   -  resident lifestyle; and
   -  physical environment and safe systems.
The outcomes must be delivered in a way that enhances a resident’s dignity and rights in a safe and comfortable living environment.
Monitoring and Spot checks
The Aged Care Standards and Accreditation Agency (the Agency) assesses and monitors Australian Government funded residential aged care homes against the Accreditation Standards.  The Agency undertakes audits as well as conducting spot checks and visits each home at least once every year.  Around 5,200 visits will be made each year, including about 3,000 unannounced visits. 

## The Challenges

- Ageing
- The number of people aged 70 and over will double in the next 20 years
- Financial sustainability
- Increasing budgetary pressure from health costs
- Workforce
- decreasing labour force participation rates
- difficulty in finding skilled aged care workers and aged care nurses
- Technology
- increasing demand for new (and expensive) technologies
- baby boomers expectations for personalised care

**Notes:**
TALKING POINTS
Ageing
Within 50 years the number of people aged over 65 will almost triple; those aged 70 and over will double in number;  and so will the number of people aged 80 and over.
Financial sustainability
As a result of advances in medicine, disease control and improved health care, older people are living longer and have the chance to lead healthier, more satisfying and productive lives than ever before. However, recent studies have shown that this ageing of the population, when coupled with lower fertility rates, will result in a decrease in the proportion of working-age people in the Australian population, increases in pension costs, increases in health outlays and increased demands for aged care.
Whilst the full impact of population ageing is expected to be gradual, action needs to be taken now on workforce needs, retirement planning, and building a sustainable system of care, along with longer-term strategies.

## Additional information

**www.health.gov.au**
**www.seniors.gov.au**
**www.agedcareaustralia.gov.au**
**http://www.health.gov.au/internet/****wcms/publishing.nsf/Content/****ageing-securing-the-future**