Budget both gives and takes from aged care sector
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It was largely good news for the aged care sector in Tuesday’s federal budget, though the government’s largesse did not come without some cuts.
One of Treasurer Jim Chalmer’s big ticket items was $11.3 billion over four years to meet a 15 per cent pay rise for 250,000 aged care workers. The commitment comes as a result of the Fair Work Commission’s findings in March and will see eligible workers benefit from 30 June this year.
It was largely good news for the aged care sector in Tuesday’s federal budget, though the government’s largesse did not come without some cuts.Credit: Getty
On top of this spend, the budget also provided an additional $338.7 million in funding to improve home care. Over 2023-24 an additional 9,500 home care packages will be provided at a cost of $166.8 million. There are now more Australians receiving a home care package than living in an aged care home: data shows at the end of last year there were 255,628 people with access to a package, an increase of 17 per cent on the year before.
The Support at Home program that was due to commence in July has been delayed by a further 12 months as the industry warned that it was not ready. Set to replace the Home Care Package, Commonwealth Home Support and Short-Term Restorative Care programs, the new consolidated program is set to remove anomalies around assessment, eligibility criteria as well as the funding and fee arrangements that vary across the current programs and make it difficult for people to navigate. Around half the additional funding will be aimed at building the systems, trialling products and services and developing pricing for the new program.
The government will also spend $827.2 million over five years to improve the delivery of aged care, more than half of the funding ($487 million) will be used to extend the Disability Support for Older Australians program. A further $112 million will incentivise GP visits in residential aged care, and $41.3 million will go towards a new “place assignment system” to enable Australians to choose their residential aged care provider.
An additional $309.9 million will be spent to strengthen regulation of the industry and improve health and safety for residents which includes $139.9 million for enhancements to the Aged Care Star Ratings, $59.5 million for a national worker screening and registration scheme, $25.3 million to bolster the audit and compliance program of the Aged Care Quality and Safety Commission and $12.9 million to improve food and nutrition and enforce standards.
On the other side of all this spending is a $2.2 billion cut over three years in funding for residential aged care, with the funding reduction to come from a reduction in the allocation of aged care places. Currently, the government provides funding for 78 residential aged care places per 1,000 people over the age of 70. That ratio will be reduced to 60 for 3 years from 2024-25.
While there was no mention of changes to the means testing arrangements the government is said to have paid consultants $396,000 to look into consumer contributions to the cost of aged care.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
Rachel Lane is the principal of Aged Care Gurus and co-author of Aged Care, Who Cares? and Downsizing Made Simple.
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