Aged care funding: Government compromises on budget’s ACFI changes

The Federal Government announces changes to how it will achieve savings of $1.2 billion in aged care funding by adjusting some of the controversial measures contained in its May budget.

The Federal Government announces changes to how it will achieve savings of $1.2 billion in aged care funding by adjusting some of the controversial measures contained in its May budget.

The confirmation by Assistant Minister Ken Wyatt on Tuesday comes after months of provider backlash over the changes to the Aged Care Funding Instrument, which aged care providers argued would impact residents with high care needs.

Mr Wyatt announced the government was not proceeding with some of the budget’s proposed changes to pain management and physiotherapy services funded under the Complex Health Care (CHC) domain in the ACFI.

Ken Wyatt
Ken Wyatt

Speaking at the Preparing for Choice and Control in Residential Aged Care conference Mr Wyatt also announced a one-year freeze on indexation of all ACFI subsidies in 2017-18 and a one-year delay in the budget’s 50 per cent freeze on indexation of the CHC domain until 2018-19.

Minister for Health and Aged Care Sussan Ley and health department bureaucrats have argued that the growth in ACFI funding is being driven by higher than expected claiming in the CHC domain.

They said spending on ACFI would blow out $3.8 billion by 2020 if no action was taken.

But aged care services have argued the government overreached in its budget response and the measures would have far-reaching long-term impacts on care funding.

In July an analysis commissioned by not-for-profit providers found the proposed changes would cost the sector in excess of $2.5 billion over the next four years, almost $840 million more than the government had estimated.

The Commonwealth had agreed to work with the aged care sector on finding alternative ways of adjusting the ACFI to deliver the same $1.2 billion in savings over four years.

And it had agreed to give the sector some of the department’s economic modelling behind the budget measure.

In a statement outlining its revisions yesterday evening, Mr Wyatt said the government had listened to the concerns of providers and adjusted or removed some of the previously proposed changes to the delivery of complex pain management.

“It is important to the integrity of the funding arrangements that certain changes to the complex health care domain go ahead to ensure funding appropriately reflects the care needs of residents, contemporary care practices and is clinically appropriate,” he said.

Rural MPs lobbied

There was speculation yesterday that National MPs had forced the issue within the Coalition government as they feared the long-term impact of the changes on rural aged care services.

Along with adjusting the ACFI changes, the government also yesterday announced an increase to the rural and remote aged care viability supplement, which comes on top of $102 million in the May budget.

While several provider peak bodies have been lobbying government, Australian Ageing Agenda understands that Aged & Community Services Australia had met with as many as 12 key regional and rural MPs in recent days to raise the issue.

Last week Liberal National Party MP for Wide Bay Llew O’Brien spoke out in Parliament against the budget changes.

“I will not stand for any policy, by any government, that sees a reduction in the quality of care for our older Australians,” he said.

Mr O’Brien said aged care providers in his electorate had told him about their difficulties with the ACFI changes.

Meanwhile, as AAA recently reported the government has commissioned the University of Wollongong to develop a new alternative to ACFI, given the beleaguered funding tool has blown its budget twice in five years (read that story here).

Read the department’s factsheet on the new ACFI changes here

Read AAA’s full coverage on the ACFI cuts

Want to have your say on this story? Comment below. Send us your news and tip-offs to 

Subscribe to Australian Ageing Agenda magazine 

Sign up to AAA newsletters

Tags: acfi, aged-care-funding, aged-care-funding-instrument, budget-2016, Ken Wyatt, pain-management,

5 thoughts on “Aged care funding: Government compromises on budget’s ACFI changes

  1. As our Ageing Population is set to soar I can’t understand how funding like this can be cut. Service Providers are not going to be able to staff adequately or provide the quality of care “person centred care approach” to its clients. Sean Rooney CEO from LASA has had his plea with his concerns over the $ 1.8 billion cuts to Aged Care funding appear in several news papers (Letters to the Editor). I have certainly supported Sean in our local paper. We need to start putting our older people and ageing population on the radar of importance and it needs to come from the people that have th power. We are all going to be old one day and we have the human right to quality care.

  2. This is the same government that reiterates how important it is to “balance the Budget” and is in aged care expenditure. proposes to spend $50 billion” on buying 12 non-nuclear submarines that are, already, out of date and inferior to submarines now being operated in the Asia Pacific region by America, Russia, China and India! Once built it is unlikely that more that more than 5 of these submarines will EVER be operational at the same time! $50,000,000,000 that would be better spent on the NBN, fast rail Link or even on some aged care.

  3. When Medicare and the government will pay over $1000 for a bed in a hospital per day and only a max of $220 for the care in a nursing home per day we have a problem in the funding.

    Give $ 400 a day to the aged care provider for the hospital bed to be empty and the elderly client can be cared for , restored to transition back to home care, rehabilitated or palliated and still save the government and tax payer a fortune in the health budget

    Do the math for heaven sake and look at the health benefits for all

  4. Strange…I still haven’t met anyone that voted for our current incumbents. That $50 billion was all about appeasing SA and securing Mr Pine’s seat. Wonder if he has elderly parents?

    de Maistre was right…every nation gets the government it deserves.

  5. A big thank you to all rural/ regional MPs especially Andrew Broad, Federal Member for Mallee. Your efforts are very much appreciated.

Leave a Reply

Your email address will not be published. Required fields are marked *