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Aged Care Minister Anika Wells has made her view clear: wealthy retirees should pay more for their own aged care.
A task force chaired by Ms Wells declared it was not "optimal" or "fair" that taxpayers pay so much of the bill for aged care — 75 per cent of residential care costs, and 95 per cent of in-home care costs.
Instead, the task force called for a new philosophy: the government should fund the care itself, but those with financial means should pay for their own basic living and accommodation costs. That does not happen consistently today, and would be a substantial change.
It is not yet government policy — the recommendations will need to go through cabinet. But the government has already ruled out a taxpayer levy, as the 2021 royal commission had suggested.
In a press conference on Tuesday, Ms Wells spelled out what that meant.
"[There's no] magic pudding, there are only two ways you can do this: taxpayer funding and resident funding," she said.
"We wish [for taxpayers] to be the majority funder moving forward but when we have more than 41,000 people entering aged care every year ... we will need to do something differently."
Any change is unlikely to come quickly, and the task force emphasised that those currently in aged care should not have the rules changed on them.
But who exactly does pay today, and how might this change in future?
Home care vs care homes
There are two categories of aged care: care delivered at home, and care delivered in a residential facility.
Residential care has historically been the norm, and remains the larger category. But demand for in-home care is growing as more people seek to "age in place".
For both types of care, the government is the main funder but not the main provider. Care is provided by a variety of religious, charitable, and private organisations, who receive a subsidy from the government.
Individuals can then be asked to pay a small amount on top of that subsidy, within certain limits.
Fees for in-home care
There are two basic user fees for home care.
First, there's a basic fee, set between $11 and $13 a day. This is roughly one-sixth of the aged pension. Any user can be charged.
Second, there's a means-tested fee, which can be charged to users who earn above certain thresholds.
Currently, single people who earn over roughly $32,000 (including pensions and super earnings) can be charged an extra $17.97 a day. Those who earn over roughly $62,000 can be charged up to $35.95 a day.
To put these numbers in context, the government subsidy for home care ranges between $28 and $163 a day, depending on the level of care needed.
That might suggest a broadly even split, but it often doesn't work that way in practice. Most people who receive in-home care are age pension recipients who do not pay the means-tested fee. And the basic fee is not compulsory and is often not charged.
The result is that users pay only about 5 per cent of the cost of in-home care.
Fees for residential care
Residents in aged care facilities typically pay more for their care.
Just like for in-home care, there is a basic daily fee, in this case $60.86 a day, or 85 per cent of the age pension. It is paid by almost everybody.
And similar to in-home care, there is a means-tested fee, here up to $416.05 a day. Eligibility for this fee considers both the resident's income and assets, including a small portion of the value of the home they own (unless their spouse is still living in it).
Residents must also contribute to their accommodation costs, but have a choice about how to do so. They can either pay a daily accommodation fee, or a single deposit to be refunded when they die or leave aged care, or they can choose a combination of the two.
Finally, for both in-home care and residential care there are annual and lifetime caps on how much an individual can be charged due to means testing — a user cannot be charged more than $32,781.57 a year of $78,524.69 in a lifetime.
What could change?
For in-home care, the task force recommended a new "fee-for-service" approach, which would see the government pay for the care itself (e.g. the cost of a nurse or mobility supports), but would expect residents to pay for costs they had been expected to pay all their lives, such as food.
For residential care, it recommended moving to a fee "supplement" on top of the basic fee. The government would pay the supplement for low-means residents, but high-means residents would pay it themselves. Residents could also have the option to agree to higher fees in order to receive extra amenities.
The task force also recommended phasing out the option to pay for accommodation via deposit.
The purpose of that option has been to allow aged care facilities to generate a financial return because they are allowed to invest the deposit while they hold it.
But the task force, agreeing with the 2021 royal commission, did not believe the deposits were achieving their desired purpose and suggested all residents should move to a daily payment ("rental") model.
Why is the government considering this?
The task force report laid out a blunt rationale for considering user costs: Over the coming years, as the baby boomer generation retires, Australia will have more retirees needing care and needing it for longer.
Those retirees have increasingly complex care needs and expect a higher standard of care.
Meanwhile, the working-age population, who fund aged care through taxes, is shrinking in relative terms.
The number of people over 80 will triple to more than 3.5 million over the next 40 years. And whereas today there are four working-age Australians for every retiree, in 40 years there will be less than three.
The aged care sector, according to the task force, is "not in a financial position to meet expected demand".
"Generally older people [today] are wealthier than previous generations," the task force noted, citing superannuation balances.
"Income from superannuation should be drawn down in retirement to cover health, lifestyle, other living expenses and aged care costs."