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Budget: Residential places to go to consumers, new bond levy for providers


The government has backed the Tune Review recommendation to put residential aged care places in the hands of consumers, the 2018-19 Federal Budget shows.

The Government will provide $300,000 to explore allocating residential care places to consumers rather than providers, according to the Budget handed down by Treasurer Scott Morrison last night.

The government said it provided in-principle support to putting residential places in the hands of consumers, which is a key feature of the Aged Care Roadmap and a recommendation of the 2017 Legislated Review of Aged Care led by David Tune.

The analysis will assess the potential impacts on consumers, providers, the financial sector and any changes to the system that may be required. It will also pay special attention to how the change would impact rural and remote areas that have limited choice and competition, according to the announcement.

The government announced the aged care budget would grow by $5 billion over the next five years, which is in line with recent trends of around an additional $1 billion of aged care expenditure annually.

Among measures announced in the budget package are 13,500 residential places, 775 Short-Term Restorative Care places and $60 million in capital funding for new residential places in the 2018-19 Aged Care Approvals Round.

The new residential aged care places combine targets for 2018-19 and 2019-20 according to the budget papers, which show 7,300 fewer residential places in 2020-21 than what was tabled in last year’s budget.

This year’s budget estimates 204,700 aged care places at the end of this financial year, which falls short of the 209,700 target in last year’s budget papers.

The new residential care targets for 2018-19 are 210,100 (down from 216,900) and 217,000 for 2019-20 (down from 224,600).

As part of measures to minimise its risk in guaranteeing refundable accommodations deposits, the government said it would go ahead and introduce a compulsory retrospective levy on residential services, where defaults exceeded $3 million in any financial year.

The Tune Review and the Aged Care Financing Authority both recommended that providers should pay toward the Accommodation Payment Guarantee Scheme.

The measures, which will cost $4.8 million over two years, also include developing strong prudential standards for bonds held by providers and raising government’s capability to better reduce the likelihood of a claim and protect the growing pool of refundable payments, currently around $23 billion.

Mental health, palliative care, remote

Responding to the long-standing concerns around a lack of access for residents to psychological care, the budget provides $82.5 million over four years for mental health services for aged care residents, along with $20 million over four years to trial nurse-led mental health services for people aged over 75 experiencing social isolation and loneliness.

The budget also contained $32.8 million over four years for a trial to improve palliative care for aged care residents but that initiative is contingent on state and territory governments matching the funding.

The government will also provide capital grants to the value of $40 million over five years for aged care facilities in regional, rural and remote communities.

Elsewhere in remote aged care services, the government will provide $105.7 million over four years, including $32 million from within the existing resources, to support the National Aboriginal and Torres Strait Islander Flexible Aged Care Program for residential and home aged care services in remote Indigenous communities.

Related budget coverage

Additional home care packages, reablement trial for home support

Funding for providers to implement new quality standards

Government to pilot service to help older people navigate aged care

New measures welcome but long-term fix needed, say stakeholders

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One Response to Budget: Residential places to go to consumers, new bond levy for providers

  1. Greg Mundy May 11, 2018 at 5:07 pm #

    I don’t see any sign of recognition of the effect that putting residential aged places in the hands of consumers will have on occupancy levels and therefore the cost and price of each place.

    I’m unconvinced that this neo-liberal market ideology will work here any better than it has elsewhere in human services or the economy more broadly. Or in aged care to date if the truth be told.

    Would the cost be worth the benefit? Unless this question is taken seriously and the answer is clearly ÿes’, this flavour of Kool-Aid should be returned to the fridge.

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