The European Centre for Social Welfare Policy and Research supports the Sustainable Development Goals
The asset contribution to residential care in Austria (Pflegeregress) was abolished in January 2018, increasing the scope for higher use of social assistance and higher demand for residential care for older people. There had been, however, no empirical evidence on the distributional effect of this measure across the income and wealth distribution. There had also been limited evidence-based discussion about funding alternatives to the abolished asset contribution, and their distributional effects respectively. This study set up to bridge these gaps, thus making a significant and timely contribution to the policy debate in Austria on the Pflegeregress.
The project aimed to answer the following research questions: RQ1: How was the Pflegeregress distributed across different income, wealth (including home ownership) and gender groups in Austria, prior to its abolishment? RQ2: What has been the distributional impact of waiving the Pflegeregress? RQ3: Considering budgetary neutral and other alternatives to Pflegeregress, what would be the distributional impact of each alternative and what could explain the differences between different scenarios? Possible alternative scenarios under assessment included earmarked inheritance tax and lifetime limits on asset contributions, among others.
The study used a combination of administrative data on users of care allowance, residential care users, mortality tables and a representative survey of older Austrians (SHARE data) to simulate the distributional impact associated with the Pflegeregress and its abolishment. A scoping review of funding mechanisms for residential care in Europe, both in place or proposed, provides information on possible funding alternatives. The distributional impact of these alternatives was simulated and compared against the abolished Pflegeregress.
The European Centre for Social Welfare Policy and Research supports the Sustainable Development Goals