Indirect benefits including concessions and rebates
Recommendation 5
In order to increase the capacity of indirect benefits to meet the needs and ameliorate financial stress experienced by older people, the committee recommends that:
- the Government review the efficacy of indirect benefits.
- governments at all levels should provide services, subsidies, rebates and concessions for older people which recognise the limited incomes available to this age group and should ensure these indirect benefits are set at a fair and appropriate level and are sufficiently indexed to maintain their real value.
- the financial thresholds for eligibility for indirect benefits, including the Commonwealth Seniors' Health Card, should also be set at a fair and appropriate level, and be indexed to maintain their relative accessibility.
- in order to achieve greater national uniformity, Commonwealth, State, Territory and Local Governments work together to develop a nationally recognised senior's card to provide concessions and benefits to eligible older people and to negotiate reciprocal arrangements across jurisdictions with respect to public transport concessions. (Chapter 4)
Response
Parts (i), (ii) and (iii)
The Government agrees that the efficacy of indirect benefits should be reviewed. The role and structure of services, subsidies, rebates and concessions impact directly on the adequacy of existing support provided to pensioners and seniors, and will be considered in the course of the investigation by Dr Harmer into measures to strengthen the financial security of seniors, carers and people with disability.
The Government has direct responsibility for some subsidies, rebates and concessions provided to older people. Other subsidies, rebates and concessions are administered by State, Territory and Local Governments and some private organisations. The Commonwealth Government provides funding through a Special Purpose Payment to State and Territory Governments (estimated at $220 million for 2008-09) to assist with the costs of providing core concessions such as utilities, municipal and water rates, public transport and motor vehicle registration to part-rate pensioners with a Pensioner Concession Card.
Eligible older people also receive indirect benefits through aged care subsidies and concessions, the Pharmaceutical Benefits Scheme and the Medicare Safety Net.
Aged Care Subsidies and Concessions
The Government subsidises the costs of care for older Australians receiving residential or community aged care. All residential care subsidies were reviewed recently and changed fee and subsidy arrangements were introduced on 20 March 2008. The new means testing arrangements are simpler and fairer, and care subsidies are better matched to the costs of care for residents with complex health care needs.
Pharmaceutical Benefits Scheme
Older people who are self-funded retirees and who hold a Pensioner Concession Card, Commonwealth Seniors Health Card, or Health Care Card are currently able to obtain medicines supplied under the Pharmaceutical Benefits Scheme (PBS) at the concessional co-payment of $5.00, compared to $31.30 for the general population. Once reaching the concessional safety net amount of $290.00 (equal to 58 prescriptions) in expenditure on their PBS medicines over a calendar year they are eligible for PBS medicines free of charge for the remainder of that calendar year. Changes to the co-payments and safety net thresholds occur on 1 January each year, based on the Consumer Price Index.
Medicare Safety Net
The extended Medicare Safety Net assists Australian families and individuals who have high out-of-pocket costs for out-of-hospital services that are covered by Medicare. Out-of-hospital services include GP and specialist attendances and services provided in private clinics and private emergency departments. Once the relevant annual threshold has been met, Medicare will pay for 80 per cent of any future out-of-pocket costs for out-of-hospital Medicare services, in addition to the Medicare Rebate, for the remainder of the calendar year.
In the 2008 calendar year, eligible families and individuals qualify for the extended Medicare Safety Net when their out-of-pocket costs for eligible services exceed $1,058.70. The Government caters for families and individuals on low incomes through a lower extended Medicare Safety Net threshold. In the 2008 calendar year, people who hold a Pensioner Concession Card, a Health Care Card or a Commonwealth Seniors Health Card or families who are paid Family Tax Benefit (Part A) payments are eligible for a lower safety net threshold of $529.30.
There are no current plans to change the way the extended Medicare Safety Net operates. However, the Health Legislation Amendment (Medicare) Act 2004 requires that a review of the operation, effectiveness and implications of the extended Medicare Safety Net be conducted. It is anticipated that this review will be completed in 2008.
Utilities Allowance and Seniors Concession Allowance
In addition to indirect benefits, the Government is providing some direct benefits to senior Australians. The Government is providing $5.1 billion over five years to increase the rate of the Utilities Allowance and to extend the allowance to a range of pension recipients, including all recipients of Carer Payment, Disability Support Pension, Widow B Pension, Invalidity Service Pension, Income Support Supplement, Partner Service Pension, Wife Pension and Bereavement Allowance.
The Government will provide $324.4 million over five years (including $40.5 million in 2007-08) to increase the rate of the Seniors Concession Allowance. These measures deliver on the Government’s election commitment.
Part (iv)
The Government accepts the recommendation to negotiate reciprocal transport concessions for Seniors Card holders. The Government has committed to negotiating with State and Territory Governments to achieve reciprocal concessions for State Seniors Card holders who access public transport services outside their home state. In the 2008-09 Budget, $50 million was provided over four years to implement this plan from 1 January 2009.
Seniors Cards are issued by State and Territory Governments to their residents who are generally aged over 60 and no longer working full time. In general, Seniors Cards provide concessions on services funded by the States and Territories and are therefore aimed at State and Territory residents. (For example, Seniors Cards may provide concessions on motor vehicle registration and dog registration). Many benefits available to State Seniors Card holders are offered by the private sector, including dining and entertainment or financial products. The private sector offers these concessions at its own discretion.
The Commonwealth Government would support any moves by State or Territory Governments or private service providers to offer discounts to people moving between jurisdictions.