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Professional accounting bodies have said the government needs to carefully consider funding arrangements before implementing reforms in the aged care sector to ensure they are fair and equitable.
The SMSF Association, CA ANZ, CPA Australia, and the Financial Advice Association of Australia have said while they understand the need for reforms to take place as soon as practicable in the aged care sector, there is “merit in having guidance and clarity in the funding arrangements for these significant reforms to run smoothly when they commence”.
“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,” it said.
The SMSFA and joint accounting and advice bodies said they have many members involved in all areas of aged care, including in providing accounting expertise to assist the finance and management reporting areas of aged care providers and offering financial advice and support to consumers and their families to understand how the aged care rules work and how aged care services and costs interact with other services to meet consumers’ needs.
“Given the important role our members play in assisting their clients with aged care needs, we would welcome the opportunity to be involved in the ongoing drafting discussions on the funding arrangements for future inclusion in chapter 4 of the New Aged Care Act,” the submission added.
The submission also called for clarity on the role of financial advisers in assisting clients with their aged care needs, stating 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,” it said.
“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, the submission recommends 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.
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