In a joint submission to the government’s consultation on the new Aged Care Act exposure draft, Chartered Accountants Australia and New Zealand (CA ANZ), CPA Australia, the Financial Advice Association Australia (FAAA), and the SMSF Association said it is “unclear” how the role of a financial adviser fits in the exposure draft.
“Financial advisers assist clients with their aged care needs,” the submission said.
“It is a requirement in the legislated Financial Adviser Code of Ethics for financial advisers to consider the potential future aged care needs of clients. This can include acting as the client’s representative in relation to aged care matters and when interacting 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 an ‘advocate’, ‘representative’ or ‘supporter’ under the exposure draft.”
The joint submission said the definitions could be cleared up in the explanatory memorandum to the final bill.
“The law should clarify how the interaction between the definitions (and the intended role of a person acting under these definitions) in the exposure draft applies to the assistance financial advisers provide clients in relation to their aged care needs.
“Given the provision of financial advice is heavily regulated under the Corporations Act and the Code, with oversight by ASIC, we recommend it be made clear that ‘relevant providers’ operating under corporations law are not intended to be captured under the definitions or provisions in the new Aged Care Act.”
The government’s Aged Care Taskforce suggested that the amount paid by Australians accessing care should be determined by their personal wealth, including super, rejecting the idea of an aged care levy.
The taskforce comes on the back of the Royal Commission into Aged Care Quality and Safety and was established last year to determine the best means of funding the aged care system. Australia’s aged care bill continues to increase and last financial year totalled $27.1 billion and is expected to reach $42 billion by 2026–27.
The government funds about 75 per cent of residential aged care and 95 per cent of home care which the taskforce has said is not sustainable, leading to the recommendation that older Australians subsidise aged care from their super.
“In line 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.
