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Aged care surprises in budget update

The Federal Government has denied that the removal of funding earmarked for a replacement dementia supplement from the latest budget update should be read as cause for concern.

While the Mid-Year Economic and Fiscal Outlook (MYEFO) noted that the government was “considering alternative arrangements” to the dementia supplement, there was no allocation of funding provided.

Labor said MYEFO had removed any hope of a replacement for the axed supplement.

“All trace of the DSBS funding has been removed,” Labor senators Helen Polley and Shayne Neumann said in a statement. “Mitch Fifield needs to come clean and explain what happened to the ‘funding envelope’.”

Alzheimer’s Australia similarly said it was concerned the allocation previously committed to replace the supplement had not been included in the forward-estimates. CEO Carol Bennett urged the government to develop an alternative to the dementia supplement as a matter of high priority.

However, Assistant Minister for Social Services Mitch Fifield told Australian Ageing Agenda that the funding for the former supplement was removed in the MYEFO to accurately reflect the fact that the supplement has been ceased. “This does not indicate the government will not make full funding provision within the envelope for the alternative policy,” he said.

The Federal Government yesterday released the long-awaited report by KPMG on the ministerial dementia forum, held with providers, consumers and experts on 11 September to canvass views on potential alternatives to the axed supplement. Senator Fifield said the report was being considered by government, along with the feedback from the Aged Care Sector Committee.

Pre-entry leave subsidy axed

Elsewhere in MYEFO, in another surprise move, the Federal Government axed the Pre-entry Leave Subsidy in residential aged care, to save about $10 million over three years.

Aged and Community Services Australia (ACSA) said that decision was disappointing and would “squeeze the sector even tighter.”

“Providers who wear the cost will have less money for care and services,” said ACSA CEO Adjunct Professor John Kelly. “It is not fair if the cost is passed to the consumer as the subsidy was introduced to bring a sense of orderliness to what is often a difficult and distressing time… The subsidy meant that families and consumers did not have to make an instant decision about care.”

As AAA reported in February, pre-entry leave arrangements had already been reduced to 30 per cent of the full subsidy under changes initiated under the former Labor government and implemented by the Coalition Government before Christmas last year.

Responding to the full loss of the subsidy yesterday, one large aged care provider in Western Australia estimated the impact on its bottom line would be $120,000, and noted it was another “hit to budgets that was unforeseen with no consultation.”

Senator Fifield told AAA that the measure would ensure aged care expenditure was better targeted by removing care payments for residents who had not yet moved into care.

“However, aged care providers can still keep places ‘on hold’ for people wanting to enter care, and they are still able to charge the incoming resident a fee (approximately $47 per day).”

He said the decision should be considered in the context of other reforms such as redirection of the former government’s workforce supplement into the general pool of aged care funding, the introduction of a higher level of accommodation supplement, and the significant deregulation of accommodation payment arrangements.

ACAR simplification on the horizon?

The MYEFO also contained an announcement that the government was ceasing the Social Services Aged Care Planning Advisory Committee and that it would develop a “streamlined consultation process” for the 2015 Aged Care Approvals Round (ACAR).

When asked for more details on the new process and how it would impact ACAR, Senator Fifield told AAA that information would follow in the lead-up to the next round.

“The government is committed to engaging with stakeholders and obtaining local intelligence as part of planning for each ACAR. More details about the new streamlined approach to the consultation process will be made available in the lead up to the 2015 ACAR,” Senator Fifield said.

In a commentary to its members yesterday, Catholic Health Australia said the government’s decision should not be seen as a step towards the removal of service rationing.

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