Budget supports seniors but fails to address workforce issues

This week’s federal budget has delivered for seniors, but more could have been done to allow older workers to help address aged care and other sector workforce issues, says a consumer advocate.

The Albanese Government has delivered on its election promises for older Australians with measures in the budget to reduce out-of-pocket health costs and support pensioners who want to downsize their home, or work. There is also funding to support the in-home aged care sector.

The measures in the October 2022-23 budget handed down by Treasurer Jim Chalmers on Tuesday evening include:

• providing 50,000 additional self-funded retirees access to a Commonwealth Seniors Health Card by increasing the income test threshold
• measures to incentivise home downsizing by extending the asset test exemption for pensioners and other income support recipients to two years and calculating income on exempt sale proceeds using the lower deeming rate of 0.25 per cent
• freezing social security deeming rates for pensioners for two years
• cutting the cost of medicines by $12.50 to a maximum cost of $30
• one-off $4,000 credit to the Work Bonus scheme until June 30 – which was announced at the job summit in September – to increase the amount pensioners can earn from work before their pension begins to reduce.

Advocacy body National Seniors Australia has welcomed these commitments to ease cost of living pressures for older Australians but is disappointed by missed the opportunity to help fix urgent workforce shortages.

“These initiatives are welcome, but we need to address workforce shortages. We hoped the budget included additional measures to boost workforce participation,” said National Seniors Australia chief advocate Ian Henschke.

While the $4,000 income credit to the Work Bonus is a good first step, stopping it in June 2023 does not provide pensioners and employers the certainty needed, he added.

“The workforce crisis in the care sector could be eased by allowing pensioners to work, and work more, without being financially penalised.

“For sectors desperate for workers such as health, aged, disability and child care we need a full income exemption to fill shortages. A two-year trial is the next step. And it should happen in the May 2023 budget.”

Letting pensioners work in the care sector without being penalised is a win for government, the economy and pensioners, Mr Henschke said. “There are always things government can do to improve peoples’ lives that won’t cost money. This is only one.”

The peak body for older Australians – Council on the Ageing Australia – agrees longer-term solutions to boost workforce participation of seniors are needed beyond June 2023, when the one-off $4,000 credit ends. However, COTA has praised the many cost of living and other measures in the budget across areas – including health, aged care, housing, women’s pay and childcare – that will help older Australians.

“This is a budget that has kept its promises to older Australians and gone further in some areas,” said COTA Australia chief executive Ian Yates.

“Looking at the budget as a whole, the government’s focus on reducing inflation as soon as possible, helping get from 7.75 per cent this year to 3.5 per cent in 2023-24, will be a welcome relief to older Australians on fixed incomes and will protect the savings of retirees and people saving for retirement.”

Encouraging right-sizing for seniors ‘right move, right time’

The Retirement Living Council has welcomed the Albanese Government’s plan to reduce the adverse financial impacts for pensioners looking to right-size their home.

RLC executive director Daniel Gannon said the policy changes would help cash-strapped seniors and create additional housing supply capacity for young families.

“Removing disincentives for older Australians to down-size into age-friendly communities is a win for older homeowners, government health and aged care budgets, and for younger Australians looking for family-sized houses in established neighbourhoods,” Mr Gannon said.

“As taxpayers face growing health and aged care costs, older Australians right-sizing into age-friendly communities is the right move at the right time. This is a win-win for seniors and the nation’s housing market, which is currently under great duress,” he said.

Stakeholders welcome additional aged care reform measures

Consumers also welcomed the budget’s $3.9 billion for the aged care sector to build on the recommendations of the royal commission and implement election commitments. However, they have called for more action on in-home care.

While most of this almost $4 billion is to increase registered nurses and care minutes in residential aged care ($2.5 billion), it also includes $23.1 million for research and consultation for reforms of home care. Aged care sector-wide initiatives include:

• $9.9 million over two years for a dedicated Aged Care Complaints Commissioner
• $38.7 million over four years for an Inspector-General of Aged Care
• $3.6 million over one year for a personal care workers registration scheme
• $68.5 million over for four years to Strengthening Regional Stewardship of Aged Care.

“Older Australians deserve respect and dignity in aged care and this budget takes the first steps to deliver the reforms that they so badly need,” Minister for Health and Aged Care Mark Butler said in a statement.

In the same statement, Minister for Aged Care Anika Wells said: “The government embraces both the spirit and intent of the recommendations of the Royal Commission into Aged Care Quality and Safety, and through this budget we are taking action.”

The aged care budget puts “financial flesh on the bones of the government’s election commitments,” said Mr Yates. “We congratulate not only Ministers Butler and Wells on their hard work so far, but also the evident commitment of the Prime Minister and Treasurer to this reform process being given priority.”

Calls to prioritise home care next budget

However, more remains to be done to fully implement the royal commission recommendations and achieve a world-class aged care system all Australians can have confidence in, Mr Yates said.

“In the lead up to the next budget COTA will be strongly engaging on matters still under consideration, such as improving services for people with severe disability, and ensuring that the new Support at Home program really delivers for older people and their families.”

Similarly, the Older Persons Advocacy Network CEO Craig Gear welcomed the measures for residential aged care but called for them to be accompanied by additional measures to address the significant issues across in-home care, which he said often resulted in older people entering residential aged care prematurely.

“A flexible, appropriately funded Support at Home program, developed in consultation with older people, is crucial. Interim measures must be put in place to ensure older people don’t fall through the gaps.”

Mr Gear welcomed the commitment to consult with the people who will use the home care system along with the additional funding for a dedicated Aged Care Complaints Commissioner. “A responsive regulation system that addresses older people’s concerns and complaints in a timely and proportionate manner is a key driver of quality care,” said Mr Gear.

He also added support for funding an Inspector-General of Aged Care to “address the end-to-end issues in aged care” and look “to longer-term system improvement” and the government’s continued commitment to funding higher wages for aged care staff.

“Older people have the right to high-quality aged care – you only get that with a well-paid and a well-trained workforce”

Read Australian Ageing Agenda’s reports on the aged care measures in the budget and stakeholder reaction.

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