President of the Retirement Living Council and Chief Executive of Retirement Living at Australian Unity, Derek McMillan, penned an opinion piece in the Australian newspaper yesterday.

He said in part “The complexity of the new arrangements makes it more, not less, difficult to navigate..... Taking one wrong turn can have serious financial implications”.

He points out that a single person with $1.26 million in assets can organise their finances to pay a smaller means tested co-contribution for their care costs than someone with just $600,000 in assets. If the wealthy person keeps their family home it will cost the government $32,807 more each year in care compared to the person selling the family home.

Australian Unity figures indicate the new rules will encourage people to make a daily payment (DAPs) rather than the refundable upfront RAP. If this proves the case it will limit the development of new residential care facilities because a developer will not get the upfront lump sum to support bank development debt.

McMillan states “This isn’t the new aged care system Australians, especially older Australians, deserve”.