A consistent and fairer system
Pensioners in aged care will receive more money in their pockets each week.
Part of the pension increase will flow through to residential aged care providers via increased fees.
Self‑funded retirees in aged care will have their existing fees protected.
Residential aged care
As our population ages, it is vital that we promote a strong and vibrant residential aged care sector that provides appropriate care for frail older Australians. It is also important that those older Australians who reside in aged care facilities have some money left after paying their fees.
The Government has decided that of the $32.49 per week increase in the single base pension, $22.40 per week will flow to the residential aged care provider and $10.09 will flow to the pensioner.
This represents an ongoing increase of $195 million per year for this vital sector. This will be available to meet the rising health and care costs that they face.
Self‑funded retirees in residential aged care
As the rate charged to self‑funded retirees is linked to the rate paid by pensioners, an increase in the Age Pension of this size would normally mean that the fees faced by self‑funded retirees would increase.
The Government recognises that a sudden cost increase for existing self‑funded retiree residents would be an unfair burden, and has decided that those self‑funded retirees in residential aged care on 19 September 2009 will have their existing fee levels protected until they leave. Those that enter aged care after this date will have any cost increase phased in over four years.
The arrangements for self‑funded retirees will also apply to protected part‑rate pensioners who do not receive the full pension increase.