Distributional impact of asset contributions to residential care (Pflegeregress) in Austria

PFLEGEREGRESS

PROJECT CO-ORDINATOR

Ricardo Rodrigues

PROJECT TEAM AT THE EUROPEAN CENTRE

Cassandra Simmons, Tamara Premrov, Kai Leichsenring, Michael Fuchs

BACKGROUND

The asset contribution to residential care in Austria (Pflegeregress) has been abolished in January 2018, increasing the scope for higher use of social assistance and higher demand for residential care for older people. There is currently no empirical evidence on the distributional effect of this measure across the income and wealth distribution. There has also been limited evidence-based discussion about funding alternatives to the abolished asset contribution, and their distributional effects respectively. This study seeks to bridge these gaps. In doing so, it will make a significant and timely contribution to the current policy debate in Austria on the Pflegeregress.

AIMS

The project aims 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 is 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 will likely include earmarked inheritance tax or lifetime limits on asset contributions, among others.

METHODS

The study will use 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, will provide information on possible funding alternatives. The distributional impact of these alternatives will also be simulated and compared against the abolished Pflegeregress.

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