Aged care financing is a vexed problem for the Australian government. It is already underfunded for the quality the community expects, and costs will increase dramatically. There are also significant concerns about the complexity of the system.

In 2021–22 the federal government spent A$25 billion on aged services for around 1.2 million people aged 65 and over. Around 60% went to residential care (190,000 people) and one-third to home care (one million people).

The final report from the government’s Aged Care Taskforce, which has been reviewing funding options, estimates the number of people who will need services is likely to grow to more than two million over the next 20 years. Costs are therefore likely to more than double.

The taskforce has considered what aged care services are reasonable and necessary and made recommendations to the government about how they can be paid for. This includes getting aged care users to pay for more of their care.

But rather than recommending an alternative financing arrangement that will safeguard Australians’ aged care services into the future, the taskforce largely recommends tidying up existing arrangements and keeping the status quo.

No Medicare-style levy

The taskforce rejected the aged care royal commission’s recommendation to introduce a levy to meet aged care cost increases. A 1% levy, similar to the Medicare levy, could have raised around $8 billion a year.

The taskforce failed to consider the mix of taxation, personal contributions and social insurance which are commonly used to fund aged care systems internationally. The Japanese system, for example, is financed by long-term insurance paid by those aged 40 and over, plus general taxation and a small copayment.

Instead, the taskforce puts forward a simple, pragmatic argument that older people are becoming wealthier through superannuation, there is a cost of living crisis for younger people and therefore older people should be required to pay more of their aged care costs.

Separating care from other services

In deciding what older people should pay more for, the taskforce divided services into care, everyday living and accommodation.

The taskforce thought the most important services were clinical services (including nursing and allied health) and these should be the main responsibility of government funding. Personal care, including showering and dressing were seen as a middle tier that is likely to attract some co-payment, despite these services often being necessary to maintain independence.

The task force recommended the costs for everyday living (such as food and utilities) and accommodation expenses (such as rent) should increasingly be a personal responsibility.

Making the system fairer

The taskforce thought it was unfair people in residential care were making substantial contributions for their everyday living expenses (about 25%) and those receiving home care weren’t (about 5%). This is, in part, because home care has always had a muddled set of rules about user co-payments.

But the taskforce provided no analysis of accommodation costs (such as utilities and maintenance) people meet at home compared with residential care.

To address the inefficiencies of upfront daily fees for packages, the taskforce recommends means testing co-payments for home care packages and basing them on the actual level of service users receive for everyday support (for food, cleaning, and so on) and to a lesser extent for support to maintain independence.

It is unclear whether clinical and personal care costs and user contributions will be treated the same for residential and home care.

Making residential aged care sustainable

The taskforce was concerned residential care operators were losing $4 per resident day on “hotel” (accommodation services) and everyday living costs.

The taskforce recommends means tested user contributions for room services and everyday living costs be increased.

It also recommends that wealthier older people be given more choice by allowing them to pay more (per resident day) for better amenities. This would allow providers to fully meet the cost of these services.

Effectively, this means daily living charges for residents are too low and inflexible and that fees would go up, although the taskforce was clear that low-income residents should be protected.

Moving from buying to renting rooms

Currently older people who need residential care have a choice of making a refundable up-front payment for their room or to pay rent to offset the loans providers take out to build facilities. Providers raise capital to build aged care facilities through equity or loan financing.

However, the taskforce did not consider the overall efficiency of the private capital market for financing aged care or alternative solutions.

Instead, it recommended capital contributions be streamlined and simplified by phasing out up-front payments and focusing on rental contributions. This echoes the royal commission, which found rent to be a more efficient and less risky method of financing capital for aged care in private capital markets.

It’s likely that in a decade or so, once the new home care arrangements are in place, there will be proportionally fewer older people in residential aged care. Those who do go are likely to be more disabled and have greater care needs. And those with more money will pay more for their accommodation and everyday living arrangements. But they may have more choice too.

Although the federal government has ruled out an aged care levy and changes to assets test on the family home, it has yet to respond to the majority of the recommendations. But given the aged care minister chaired the taskforce, it’s likely to provide a good indication of current thinking.

Hal Swerissen, Emeritus Professor, La Trobe University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Australia loves dogs. We have one of the highest rates of pet ownership in the world, and one in two households has at least one dog.

But are they good for our health?

Mental health is the second-most common reason cited for getting a dog, after companionship. And many of us say we “feel healthier” for having a dog – and let them sleep in our bedroom.

Here’s what it means for our physical and mental health to share our homes (and doonas) with our canine companions.

Are there physical health benefits to having a dog?

Having a dog is linked to lower risk of death over the long term. In 2019, a systematic review gathered evidence published over 70 years, involving nearly four million individual medical cases. It found people who owned a dog had a 24% lower risk of dying from any cause compared to those who did not own a dog.

Dog ownership was linked to increased physical activity. This lowered blood pressure and helped reduce the risk of stroke and heart disease.

The review found for those with previous heart-related medical issues (such as heart attack), living with a dog reduced their subsequent risk of dying by 35%, compared to people with the same history but no dog.

Another recent UK study found adult dog owners were almost four times as likely to meet daily physical activity targets as non-owners. Children in households with a dog were also more active and engaged in more unstructured play, compared to children whose family didn’t have a dog.

Exposure to dirt and microbes carried in from outdoors may also strengthen immune systems and lead to less use of antibiotics in young children who grow up with dogs.

Health risks

However, dogs can also pose risks to our physical health. One of the most common health issues for pet owners is allergies.

Dogs’ saliva, urine and dander (the skin cells they shed) can trigger allergic reactions resulting in a range of symptoms, from itchy eyes and runny nose to breathing difficulties.

A recent meta-analysis pooled data from nearly two million children. Findings suggested early exposure to dogs may increase the risk of developing asthma (although not quite as much as having a cat does). The child’s age, how much contact they have with the dog and their individual risk all play a part.

Slips, trips and falls are another risk – more people fall over due to dogs than cats.

Having a dog can also expose you to bites and scratches which may become infected and pose a risk for those with compromised immune systems. And they can introduce zoonotic diseases into your home, including ring worm and Campylobacter, a disease that causes diarrhoea.

For those sharing the bed there is an elevated the risk of allergies and picking up ringworm. It may result in lost sleep, as dogs move around at night.

On the other hand some owners report feeling more secure while co-sleeping with their dogs, with the emotional benefit outweighing the possibility of sleep disturbance or waking up with flea bites.

Proper veterinary care and hygiene practices are essential to minimise these risks.

What about mental health?

Many people know the benefits of having a dog are not only physical.

As companions, dogs can provide significant emotional support helping to alleviate symptoms of anxiety, depression and post-traumatic stress. Their presence may offer comfort and a sense of purpose to individuals facing mental health challenges.

Loneliness is a significant and growing public health issue in Australia.

In the dog park and your neighbourhood, dogs can make it easier to strike up conversations with strangers and make new friends. These social interactions can help build a sense of community belonging and reduce feelings of social isolation.

For older adults, dog walking can be a valuable loneliness intervention that encourages social interaction with neighbours, while also combating declining physical activity.

However, if you’re experiencing chronic loneliness, it may be hard to engage with other people during walks. An Australian study found simply getting a dog was linked to decreased loneliness. People reported an improved mood – possibly due to the benefits of strengthening bonds with their dog.

What are the drawbacks?

While dogs can bring immense joy and numerous health benefits, there are also downsides and challenges. The responsibility of caring for a dog, especially one with behavioural issues or health problems, can be overwhelming and create financial stress.

Dogs have shorter lifespans than humans, and the loss of a beloved companion can lead to depression or exacerbate existing mental health conditions.

Lifestyle compatibility and housing conditions also play a significant role in whether having a dog is a good fit.

The so-called pet effect suggests that pets, often dogs, improve human physical and mental health in all situations and for all people. The reality is more nuanced. For some, having a pet may be more stressful than beneficial.

Importantly, the animals that share our homes are not just “tools” for human health. Owners and dogs can mutually benefit when the welfare and wellbeing of both are maintained.

Tania Signal, Professor of Psychology, School of Health, Medical and Applied Sciences, CQUniversity Australia

This article is republished from The Conversation under a Creative Commons license. Read the original article.