Australia is currently experiencing a demographic shift, propelled by an ageing population.
These changes will have major impacts on our nation’s socio-economic outlook, placing further strain on our healthcare, social services and aged care services.
At the same time, housing market pressures will only continue to grow, as will the need for age-friendly infrastructure and appropriate housing options for this ageing cohort.
What is crystal clear is that the retirement living sector has an increasingly important role in meeting the needs of our ageing population and tackling these critical challenges in partnership with the Commonwealth.
With this in mind, the RLC recently engaged with the Commonwealth Aged Care Taskforce to put forward solutions to escalating aged care problems, including consideration of greater co-contributions from consumers who can pay a fairer share.
Chaired by Aged Care Minister Anika Wells, its remit includes reviewing funding arrangements and developing options for a fair and equitable system, while also focusing on innovation and equity for older Australians needing aged care now and into the future.
And this is where the retirement sector could and should play a stronger role.
Traditionally, our industry was focused on real estate but has now transitioned to a sector that is providing care, wellbeing and support services.
Simply put, retirement communities now provide better housing for better health.
This is becoming more important given there are approximately 2 million people aged over 75 around the country, which is around 8 per cent of the total population.
Over the course of the next two decades, this population is expected to increase by nearly 70 per cent to about 3.4 million and will make up approximately 10 per cent of the total projected population. This trend is expected to continue over the long term, as evidenced by the 2023 Intergenerational Report.
It’s important that government understands that retirement communities offer a unique housing option that enhances wellbeing and lifespan for older Australians, and delays entry into taxpayer funded aged care – sometimes preventing it entirely.
This latter point is critical.
Retirement community residents are healthier, both mentally and physically, and more socially active and engaged with the community – making an eventual move into residential aged care, if necessary, easier from retirement communities than home.
And care is central to this public policy discussion because retirement communities are often confused with residential aged care, but they are not the same thing.
On of these housing types – retirement living – can reduce interaction with the aged care sector because it releases capacity back into state-based health systems.
And when we do this, it delivers fiscal efficiencies for governments and reduces pressure on critical services while also delivering improved outcomes for older Australians.
Hence, the value proposition of retirement living should be music to the ears of political stakeholders everywhere – or so you’d think.  So, let’s get to the details.
The current state of funding for Australia’s aged care system is unsustainable, necessitating comprehensive and long-term structural reforms.
While direct aged care services should always be publicly funded, the accommodation and daily service costs aged care residents currently contribute to on top of that need to be deregulated.
Appropriate safety nets for those without means are already part of the current legislative environment and should be protected and strengthened.
Those with greater financial means should be given the opportunity to contribute to enhanced accommodation and additional services tailored to their preferences – and while aged care operators want to provide these, they are not allowed to under the current model. Â
Through a co-contribution model, government funding would cover care costs, while residents with the means to would contribute towards accommodation and daily hotel services that suit their individual tastes and requirements.
At the same time, the co-contribution model will lessen the financial burden on the government and free up funding to meet the care needs of all older Australians.
Our perspective is grounded in the value of consumer choice, accompanied by a transparent safety net that respects providers’ investment decisions.
Fairness translates to freedom – granting those with means the ability to select services that match their lifestyle and ensuring those without means are not left behind, enabling a higher quality of life in their ‘golden years’.
In sum, this means we’re at a tipping point for industry and the imperative for transformative change within the aged care sector can’t be ignored any longer – frankly, neither can the role retirement communities can play in this housing and care eco-system.