The for-profit model of Australian aged care has created a system where families are forced to pay exorbitant fees for basic services, with one resident facing a $1.95m deposit for a 20 sq metre room and $10k monthly charges, Theguardian reported.
The For-Profit Model and Its Financial Burden
The $1.95m deposit for a 20 sq metre room in Sydney’s eastern suburbs—almost double the median price for a one-bedroom apartment in the same suburb—highlights the stark reality of Australia’s aged care system. A sales agent confirmed the figures, stating, Just to clarify, the deposit for the room is $1.95m, and the charges will be about $10,000 a month?
That’s correct,
the agent replied, Theguardian reported.
Even the lower-priced options are steep. One facility offered a $995,000 deposit for a 16 sq metre room with a big window in a well-run little centre, along with additional fees for the “hotelling fee”, non-clinical care contribution and special services charges. The system’s complexity is further compounded by bureaucratic hurdles, with residents needing to complete endless online forms, remember passwords, and navigate an ever-changing group of service providers and staff, Theguardian noted. For many, the lack of affordable alternatives means accepting these terms, even when they strain finances and mental health.
A $1.95m deposit and $10k a month: welcome to
Other listings in the brochure included rooms for $1.25m, but these were not available. When current residents leave [die] they will be renovated, with new bathrooms.
The Hidden Cost of DIY Care
While the for-profit model strains finances, another report from Inside Ageing reveals the hidden toll on families. Dr. Abby Bloom, a researcher who has spent 25 years studying the intersection of ageing, longevity, public policy, and economics, estimates that adult children sacrificing careers to care for aging parents could retire with up to $200,000 less because of the compounded effect of lost wages, superannuation and years of missed investment growth. This DIY care economy forces families to become unpaid caregivers, advocates, and administrators, often while waiting months for government-funded home care packages.
The report highlights systemic failures, including a 266,000-person backlog in aged care assessments and a lack of workplace policies supporting caregiving. We talk endlessly about the cost of aged care to government and the cost of residential care to individuals, but we talk far less about the cost being carried by families,
Inside Ageing wrote.
Adult children are becoming carers, advocates, administrators and care coordinators for ageing parents, often while waiting for government-funded home care to arrive. We have created a DIY care economy where unpaid family members have become the default care workforce. Families aren’t choosing this. They’re filling the gap because there’s no alternative.
The $200,000 price families pay for Australia's DIY aged
A System in Crisis: What Comes Next?
The crisis has prompted calls for systemic reform. Natalie Siegel-Brown, the recently departed inspector general of aged care, criticized the system’s design, stating, The way aged care reform is being implemented is causing harm … we have built inefficiency into the system by design,
Theguardian reported. The Commonwealth Home Support Program, which costs 8% of the $40bn budget to assist 65% of aged care clients, will now continue until 2029. However, with 2,000 “bed blockers” still in hospitals and a shortage of new beds, the pressure on families and the system as a whole is expected to grow.
This time last year there were more than 2,000 older people in hospitals – “bed blockers” they were cruelly called – too frail to go home without more support, but with Buckley’s chance of finding a residential care bed, even if they could afford the now standard deposit of $750,000. This year, despite the state health ministers winning extra money from Canberra, the “bed blockers” are understood to have almost doubled. The specialised facilities the frail elderly need cannot be conjured overnight. Last year few new beds became available nationwide.
Health minister Mark Butler says a new facility is needed every 72 hours to meet the 18,000 target in three years. The new system of aged care, which was meant to address problems of the old model identified with heart-breaking detail by the royal commission into aged care, is not even a year old but already broken. The Commonwealth Home Support Program, which costs 8% of the $40bn budget to assist 65% of aged care clients, will now continue until 2029.
Hundreds of thousands of people are waiting for assessments and, when these assessments are completed with an algorithm that doesn’t allow for human oversight, they find themselves waiting months for a package to meet their needs and enable them to age at home. When the package is allocated they wait even longer for a provider to deliver the services they need. For the three-quarters of aged people on pensions, the new co-payments for non-clinical services are often beyond their means.
In the first two months of the new system, applications for financial hardship increased by 88%. The way aged care reform is being implemented is causing harm … we have built inefficiency into the system by design,
the recently departed inspector general of aged care, Natalie Siegel-Brown, observed.
