Finance reform delay a strain on sector

Holding off on executing recommendations to sustain the system will impact care service delivery, say StewartBrown.

Delayed implementation of the Aged Care Taskforce recommendations will further increase provider sustainability pressures, say industry experts.

In its budget response report, aged care industry benchmarking firm StewartBrown says the implementation delay will also lead to a deferment of essential building investment and impact care service delivery.

“After five years of substantial aggregate operating deficits for the sector with over 50 per cent of aged care homes operating in deficit – and likely to increase in number – it is essential for bipartisan support to be reached to enable the funding reforms to be progressively implemented,” say the report’s authors,

The Albanese Government’s third Budget – which was handed down last Tuesday – made no mention of the taskforce recommendations, which include a call for increased consumer co-contributions from those with the means to pay.

Noting the omission, the report’s authors say: “This exclusion appears to confirm the government’s commitment to fully or partially implement the Aged Care Taskforce recommendations to increase the funding envelope, and in particular through increased consumer contributions for everyday living and accommodation services.”

They add: “It is important to appreciate that the recommended funding reforms for consumer contributions only affect intending home care and residential aged care participants as current participants would be grand-parented.”

The timing of the funding reforms is critical, say the report’s authors. Some of which can be implemented “well before” the commencement of the new Aged Care Act – now slated to come into effect on 1 July 2025 – “as they may not require significant legislative amendment.”

The funding to improve IT digital systems is essential

StewartBrown

Elsewhere in StewartBrown’s budget response, the authors welcome the announcement of an additional 24,100 home care packages. But, they warn, “further additional packages may be required to be released in the coming fiscal period to meet demand.”

The authors also praise the government for allocating $1.4 billion to boost aged care technology. “The funding to improve IT digital systems is essential as the sector moves to a new cohort of participants over the next decade, being the baby boomers.”

In conclusion, the report’s authors acknowledge that the budget shows that the federal government has “a clear charter to ensure that the aged care sector meets current and future care delivery … in a progressive, innovative, sustainable, and equitable manner.”

Financial state of play

Source: StewartBrown

Analysing the sector’s current financial performance, StewartBrown forecast a deficit for the 2024 financial year of $182 million. This will add to the $4,897 billion operating deficit accrued from 2020 to 2023.

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Tags: aged care taskforce, aged care taskforce report, Budget 2024, finance, stewartbrown,

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