In a joint submission to the Senate community affairs legislation committee inquiry into the Aged Care Bill 2024 [Provisions], Chartered Accountants Australia and New Zealand, CPA Australia, and the Institute of Public Accountants said clearer requirements around the role of financial advisers are required.
The joint bodies noted that financial advisers are required by the legislated Code of Ethics to consider the potential future aged care needs of clients.
“This may include acting as the client’s representative in relation to aged care matters and interactions with aged care providers. However, it is unclear how the function of financial advisers, defined under the Corporations Act as ‘relevant providers’, fits into the role of ‘advocate’, ‘representative’ or ‘supporter’ as described in the Bill,” the submission said.
“The law must clarify how these definitions interact (and the intended role of a person acting under these definitions) and apply to the assistance financial advisers and others provide clients in relation to their aged care needs.”
Adding that the provision of financial advice is “heavily regulated” under the Corporations Act 2001 and the code of ethics, with ASIC oversight, the accounting bodies recommended clarification to “ensure that ‘relevant providers’ operating under the Corporations Act are not inadvertently captured under the definitions or provisions in the Bill”.
“We also recommend clarification that public practising members of Australian-based professional accounting bodies are also not intended to be captured under these definitions and provisions of the Bill. These points of clarification could be included in the Bill’s Explanatory Memorandum,” the submission said.
“We do not support any requirement that would require those providing aged care funding assistance or advice to hold, or be an authorised representative of, an Australian Financial Service License. Feedback from members indicates confusion in the market on this point, which in some cases has added to the cost of seeking advice from a range of professional advisers.”
Aged care funding
The submission also looked at the funding arrangements for aged care, saying that it is “crucial to have clear guidance” around funding, including in terms of means testing.
“We support the means testing of government subsidies for aged care. However, means testing needs to be fair, reasonable and equitable for all. This process should also be easy for individuals to easily determine their eligibility for aged care government assistance,” it said.
As things stand, however, the accounting bodies believe the system within the bill is “too complex”.
“Consistent with our feedback to other government consultations and inquiries, one of our main aims will be to ensure that the aged care funding system works harmoniously with the retirement income system, particularly social security benefits and the superannuation system,” the submission said.
“We are of the view that, based on the structure of Chapter 4 and the department’s case studies, the proposed funding arrangements remain too complex and do not appear to have been designed to work harmoniously with other government policy areas.”
