Last year I raised the issue of affordability of nursing home care and the means test for government subsidy. The Minister replied that the means test is reviewed from time to time. As the cost of nursing home care continues to rise, I believe now is the time to look at the financial impact of such charges on families and to review how we can assist them.
Currently, government subsidies for step down care are means-tested, based on household per capita income. The rate of subsidy is tiered at 75%, 50% or 25% subsidy depending on per capita income. For those whose per capita income is more than $1,000, no subsidy is given.
Under the current framework, the impact of nursing home bills on families can be very drastic.
I know of one family whose father has dementia and is in a commercial nursing home. The household has 4 persons. The 2 adult children earn together about $4,400 gross pay. According to the means test formula, the family does not qualify for subsidy because the household gross income of $4,400 divided by 4 members means that per capita income is $1,100. But the nett income which the children have available after CPF deductions totals only about $3,500. Each month, paying nursing home fees of about $2,000 more than halves the household income. The per capita income left for the remaining 3 family members is about $500 each. Considering that the 2 adult children need to travel to work daily, isn’t this a very high burden on the family?
One aspect of the means test that is hard to understand is why it computes based on the gross pay of the household, including the CPF component. After all, under the current policy, CPF balances cannot be withdrawn to pay nursing home charges.
Will the government review the means test to take into account only the nett (take home) pay, or to raise the cut-off incomes for government subsidies? Earlier the Minister mentioned an additional $35 million in increased subventions for step down care institutions. How much of this is going to the nursing homes? Is the increased subvention to cater for higher wage and operating costs, or will there be money left to reduce the bills payable to non-affluent families based on current bill sizes? What other options do such families have besides nursing home care for their aged sick?
(Note: this speech was delivered in Parliament on 9 Feb 2009.)
