Residential aged care - for people's needs or private profit?

Written by: Ned K. on 2 June, 2025

(United Workers Union aged care worker members rallying in Adelaide in 2022 - X UWU)

The residential aged care sector is increasingly owned and operated on a profits first basis.

Under the current system, aged care providers (both for-profit and supposed not-for-profit) from 1 January this year can charge a new resident an upfront bond payment of up to $750,000. This is an increase from the previous maximum amount of $550,000.

The $750,000 maximum will be indexed each year from now on, according to the Aged Care Task Force (The Saturday Paper, May 17-23,2025). For the small minority who constitute the ruling class in Australia, this amount is water off a duck's back. They pay up to the maximum bond up front and even more to ensure they get the highest possible residential care. In every capital city, you can see that the residential aged care homes in the leafy, quiet suburbs of the very wealthy offer far better facilities and care than aged care homes in the outer working class suburbs of all major cities.

In the article in The Saturday Paper, the sector accountant firm Stewart Brown found that the average bond of $500,000 for a residential aged care place to live works out to be a daily accommodation payment of $109.59. This does not include the cost to the provider of wages for nurses and carers, as their wages come from federal government funding.

This average bond figure includes bonds paid by aged care residents from the wealthiest to any resident who has any assets (including their modest family home).

The increasing number of aging people who need residential care but who have no assets to speak of is growing.

The maximum accommodation supplement paid by the federal government to the aged care provider for those people "lacking financial means" is $69.79 per day.

As higher accommodation prices continue, the gap between the quality of care and facilities for those "lacking financial means" and the wealthy in aged care homes will only increase.

The incentive for the aged care providers is to "admit" elderly Australians who have enough assets to afford at least the average accommodation bond of $500,000 and rising each year.

There are some not-for-profits who will accept those "lacking financial means" even if it means their bean counter accountants assess the place is running at a loss. Given that the providers are allowed to keep the interest they make on the bonds paid by residents, the claims of some providers that they are running at a loss are questionable when you see the directors and CEOs drive to and from work in their BMWs or Mercedes Benz!

Working people pay taxes all their lives yet they cannot be guaranteed even basic quality aged care if needed without paying a huge bond. If they are "lacking financial means" then not even basic care is assured.

Under capitalism in Australia, governments have no problem in spending $360 billion or more on nuclear submarines for use in a USA war against China. But they are quite ok with an aged care system fundamentally run for private profit of operators and a system with levels of care based on class lines. 

The immediate demand should be for the federal government to eliminate private-for-profit operators and turn them in to public ownership, with the not-for-profit sector supplementing a public sector aged care system.

The long-term solution for quality aged care is an independent socialist Australia.

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