The Northern Territory news Wed 28 Apr 2021
The Northern Territory news; NewspaperNT
Community newspapers -- Northern Territory -- Darwin.; Australian newspapers -- Northern Territory -- Darwin.
News Corp Australia
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News Corp Australia
30 BUSINESS WEDNESDAY APRIL 28 2021 NTNE01Z01MA - V1 Threat to residents payment choices A MAJOR part of the current aged care system is the bond residents can choose to pay for their accommodation. It is known as a Refundable Accommodation Bond (RAD) and, as its name indicates, is refundable in full to the resident or their estate when they leave. The purpose of the bond is to provide working funds for the aged care operator, who has the use of the RAD money until it is repaid. Residents do not have to pay a RAD; they can choose alternative arrangements opting for a daily payment instead of the bond, or a partial RAD and a lower daily payment. A major recommendation in the Aged Care Royal Commissions Final Report was to phase out RADs. The commissioners point to aged care advocates who claim RADs are unnecessarily complex, inequitable and cruel. The commissioners also highlight the very real liquidity issue for providers in refunding RADs as they fall due, an issue that was brought into focus last year due to COVID-19. The ultimate risk here lies with the government, who guarantee the almost $30.2bn deposit pool. While the statistics show that there is a growing trend towards paying by daily payment, with 41 per cent of residents paying in this way in 2018-19 compared to 33 per cent in 201415, the majority of residents still choose to pay a RAD. It is simplistic to allege that aged care providers are hoodwinking more than 60 per cent of residents. It is far more likely that those paying a RAD are doing so because they want to swap one pension-exempt asset (the home) for another (the RAD) and because the inter est on any unpaid RAD, currently 4.01 per cent per year, is greater than what they can earn in the bank. Under the current legislation, residents do not even have to nominate their chosen payment method before they enter aged care. And if they do nominate to pay a RAD when they move in, but subsequently change their mind, they simply con tinue paying the daily payment. Aged Care guru Rachel Lane believes that phasing out RADs is likely to lead to a number of perverse outcomes. For starters, aged care residents will resist selling their former home, particularly within the first two years, when the home is proposed to be exempt from pension and aged care means testing. This will slash the number of established homes available to purchase. Those who do sell their home and find their pension reduced will most likely find that returns from investments such as cash and fixed interest products wont replace the lost pension. Those who lose their pension completely will also need to contribute more towards their cost of aged care through the proposed new means testing arrangements. Without the option to pay by lump sum, residents will be forced to pay by daily payment. The current interest rate is 4.01 per cent a year, but we shouldnt bank on it staying that low before the GFC the rate got as high as 11.75 per cent a year. Whatever the rate, it is likely to put pressure on aged care residents cash flows. Its hard to see why the commissioners have made this recommendation. Aged care providers are not able to insist on charging lump sums it is currently the residents choice. A system built on Care, Dignity and Respect should be providing more choice, not less. Taking away the ability to pay a RAD is likely to prove a triple whammy for many aged care residents: loss of pension, higher fees, and no lump sum available on departure. But its a trifecta worth billions for the government: lower pension payments, greater means tested aged care fees, and no need to guarantee a $30bn pool of money. Noel Whittaker is the author of Retirement Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: email@example.com INSIGHT An aged care system built on Care, Dignity and Respect should be providing more choice, not less. NOEL WHITTAKER BANK HELPS CUSTOMERS FIGHT ONLINE GAMBLING WESTPAC will let customers block digital gaming transactions in a bid to stamp out the rise of problem gaming online. The major bank is integrating a new feature within its mobile and online banking platforms, which in real time prevents a customer from conducting a transaction with a gaming merchant from MasterCard-branded debit and credit cards. Since its launch a few weeks ago, Westpac has recorded more than 2500 of its customers have enabled the feature to curb problem gambling. The implementation of the feature coincides with a boom in online betting and gaming during the pandemic, which halted normal operations in the gaming industry. Financial institutions previously implemented safety measures to gaming transactions on credit cards; however, the latest addition by the nations second-largest bank is a further step tailored to online gambling services. The measure is able to prevent bets on sites such as Sportsbet, TAB and Ladbrokes. Families and Social Services Minister Anne Ruston said it would allow Australians to have a safe punt while minimising harm from problem gambling. Westpacs digital gambling block will give Australians a convenient, sensible and immediate way to manage their spending and minimise gam bling-related harm, Senator Ruston said. It is great to see groups in the industry have identified that gambling is a serious cause for concern and are taking steps to let their customers regulate the industry. Westpac director of customer vulnerability, Catherine Fitzpatrick said problem gambling is a systemic issue across the country, which has a rip ple effect on an individuals family and friends. She noted most serious gamblers will find any means necessary to find funds to make a bet and is pleased the bank enabled the feature to be available across transaction accounts and credit cards. Gambling Help Online can be contacted on 1800 858 858 or gamblinghelponline.org.au. GERARD COCKBURN