There is a growing body of evidence to suggest that the Australian aged care industry should be subjected to the same regulatory oversight as the financial planning, superannuation and banking industries.
While there will be plenty of people within the aged care sector who will bristle at such a suggestion, there is an accumulation of evidence which points to the need for the Federal Government to acknowledge that while aged care may primarily be a health issue, it is also a wealth management/estate planning issue, and should be treated as such.
Indeed, any reading of the Treasury’s latest Intergenerational Report leaves you in little doubt that the Government needs to view retirement incomes self-sufficiency and aged care affordability in the same context. In short, aged care has become too big and too complex to be overseen by health department bureaucrats.
There has been a lot of regulatory rhetoric around property spruikers and self-managed superannuation funds just as there was once a lot of scrutiny placed on the property syndicates and others who were flogging time-shares back in the 1980s and 1990s. Today, there are practices emerging in the aged care sector which deserve equal attention.
Those practices include arbitrarily imposed layers of fees and the management of large sums such as refundable accommodation deposits (RADs), which clearly need closer and more expert scrutiny.
The regulatory environment around aged care is complex and multi-layered, requiring an interface between medical assessment and financial planning but, on the face of it, consumer best interests are currently running a poor second to the financial interests of those who own and run aged care facilities.
When an elderly person, arguably at their most vulnerable, faces decisions around selling the family home to enable them to end their lives in an aged care facility, they should be owed a duty of care vastly higher than that which the current regime provides.
Aged care and its intricacies has not been an issue in the current election campaign but it should have been. The Government has made much of the need to inject more equity into superannuation to relieve pressure on the Age Pension without, at the same time, looking to the broader implications of a rapidly ageing population.
While there are some highly reputable companies providing aged care facilities in Australia, some less than admirable practices have been seen to emerge, borne of the manipulation of an unduly complex and inefficient regime.
The same regulatory oversight and duty to best interests, which has been imposed on the financial planning industry, needs to be applied to the aged care sector.
