The Government’s Aged Care Ministerial Advisory Group has released A place to grow old: Securing the future of aged care, proposing the biggest overhaul of aged care in decades. Its central message is that the present system is fragmented, difficult to navigate and financially unsustainable as the population ages. The report contains 40 recommendations, but these are not yet Government policy. Associate Health Minister Casey Costello says the Government will consider them before making policy or funding decisions.

One of the strongest themes is helping people remain at home for longer. The report proposes a more capable in-home care system, able to provide higher-intensity nursing, clinical and support services to people with increasingly complex needs. Short-term rehabilitation, respite care, monitoring technology and support for family carers would also be strengthened. For older people, this could mean greater choice and a lower likelihood of entering residential care simply because adequate support is unavailable at home.

The report also wants aged care to become one integrated system rather than a collection of separate services. In-home care, residential care, end-of-life care, primary care and other services would operate within a connected pathway. Assessments would be streamlined, with approved aged-care providers able to undertake many assessments themselves, while Needs Assessment and Service Co-ordination agencies would concentrate on complex cases and oversight. The intended result is quicker access and less repetition for older people and families.

Another major issue is the shortage of residential-care beds. The report says funding has not kept pace with the real cost of care and recommends substantial increases, including an estimated 7.1 per cent above inflation for residential care in 2027/28, followed by differentiated payments providing greater incentives for newly built rooms. Providers receiving the highest rate would have to increase their supply of rooms without premium charges. An independent Aged Care Pricing Authority is proposed to analyse costs and advise government on prices. For older people, this is intended to increase the supply of standard rest-home and dementia beds.

The most controversial recommendations concern who pays. The Advisory Group argues that government should continue to fund a portion of clinical care for everyone, but people who can afford it should contribute more towards personal care, accommodation and everyday living costs.

For residential care, it recommends reducing the asset level at which greater contributions begin to $100,000 and introducing graduated contributions as assets rise, up to a maximum of $350,000. This would be a substantial change from today’s system: from 1 July 2026, a single person can have up to $300,811 in assets and still meet the Residential Care Subsidy asset threshold. The report also proposes limiting the value of the family-home exemption and tightening some existing rules.

There would be protections. People would not contribute towards short-term care within a defined period or residential care entered specifically for end-of-life care. A lifetime cap equivalent to five years of residential-care contributions is proposed so that people needing unusually long periods of care are not disproportionately penalised.

Perhaps even more significant is the proposal to introduce charges for some publicly funded home care. People below the Community Services Card income threshold would continue to receive fully funded care. Those earning between that threshold and twice the threshold could pay up to 25 per cent of care costs, while those on higher incomes could contribute up to 50 per cent. The trade-off is clear: substantially better home services, but higher costs for some older people.

The report also calls for a national aged-care workforce strategy, improved training, better dementia capability, urgent telehealth support and stronger regulation of home-care providers. Longer term, it suggests investigating a “save-as-you-go” social insurance scheme under which people would contribute during their working lives towards future aged-care costs.

For older New Zealanders, therefore, the report offers both promise and risk. The promise is a system that is easier to navigate, provides better support at home, has more residential-care capacity and treats aged care as part of the wider health system. The risk is financial: people with moderate savings or higher incomes could face significantly larger contributions than they do now. Whether that trade-off becomes reality depends on which recommendations the Government ultimately accepts.