The package will allow more elderly people to receive care in their own homes, with 7200 additional community care places over the next four years.
"(These measures) will ensure that the increasing number of older Australians now and in the future will be able to access the right level of care when they need it," Mr Howard said, announcing the reforms at a nursing home in Marayong, in Sydney's west, today.
The 7200 new community care places includes an additional 1,600 extended aged care at home packages, which would double the availability of high level care provided to people living at home.
The number of respite care places would increase by thousands of hours, and there would be extra assistance for disadvantaged and indigenous families and those in remote areas.
Self-funded retirees are being rewarded by the government through changes to the income test for eligibility for government support.
Under the new test all income will be treated the same, irrespective of whether it is a pension or private income, and will exempt income up to the maximum level allowed for a full pensioner.
The government's reforms will also see increased investment in residential high care, through increased accommodation payments and accommodation fees for new entrants who have the means to contribute towards their own housing costs.
The package is the government's final response to the 2004 report by Professor Warren Hogan, and the report's author has given it a positive response.
"It puts $1.5 billion into the hands of the aged care providers, so that's certainly a very welcome addition to the funding," Professor Hogan said.
Mr Howard's announcement was met with enthusiastic applause from his audience of aged care residents, and has been welcomed by many industry groups.
Aged and Community Services Australia (ACSA), described the measures as "a welcome boost to an industry under strain".
National Seniors Australia (NSA), said the additional community care places were particularly welcome.
"For many years, our members have told us that they want to remain in their own homes for as long as possible," NSW chief executive Michael O'Neill said.
Catholic Health Australia chief executive Francis Sullivan said it was a very good package that "keeps aged care affordable, makes the program more equitable, delivers more high care services and takes some of the financial pressure off providers".
But others have labelled it an election stunt which would not guarantee quality care for senior Australians.
Craig Thomson, national secretary of the Health Services Union, said he was disappointed the government hadn't introduced minimum education requirements for workers and staffing levels at aged care facilities.
"This has been a real missed opportunity because the government has failed to tie the money to any quality outcomes," Mr Thomson said.
"This seems like election year throwing of money."
Labor's Ageing spokeswoman Jan McLucas said the sector had been waiting for years for assistance and was now facing crisis point.
"The Howard Government has consistently failed to provide sufficient residential aged care beds needed for the increasingly frail elderly in Australia and this continues with the measures announced today," Senator McLucas said.
However, Labor leader Kevin Rudd said his party would not stand in the way of the reform package.
Article from www.smh.com.au
