The Federal Government is working with industry and the Opposition on a bipartisan plan to increase residential aged care funding, the health minister has told an aged care conference.

The aged care peak bodies have been campaigning for both immediate funding relief for residential aged care providers in response to the ongoing decline in providers’ financial performance as well for subsidies to match actual care costs.

Greg Hunt

In a keynote address to delegates at the Aged Care Reform after the 2018 Federal Budget conference on Thursday, Minister for Health Greg Hunt said the government has heard and understands the message from industry.

“We are utterly attuned to it and it is my next next major project, which we have to address over the course of the coming 12 months,” he told delegates.

Mr Hunt said the sector had “met it’s moment” as a result of the increasing acuity of aged care residents and acknowledged the associated costs of this trend.

There has “been a change in the economic structure” as people stay home longer and enter residential aged care with higher needs, he said.

“In many cases the cost of maintaining an individual on average has increased or is likely to increase,” Mr Hunt said.

“We have commenced discussions with the sector and the Opposition working on a bipartisan way around options… as to how we could provide that additional funding.”

Aged & Community Services Australia CEO Pat Sparrow said it was encouraging to hear Minister Hunt acknowledge there was a problem with residential aged care funding.

Pat Sparrow

“We know that they have some longer-term plans but we need to see something in the shorter term because providers are feeling the pain now,” Ms Sparrow told Australian Ageing Agenda at the conference.

“We will work with government and the Opposition in a bipartisan way to see exactly what we can broker that is going to relieve some of that financial pressure now.”

ACSA and fellow aged care peaks Leading Age Services Australia and the Aged Care Guild recently issued a joint statement calling for a focus on aged care funding in tomorrow’s five Federal by-elections (read more here).

The peaks are calling for $675 million a year to close the gap between residential aged care costs and subsidies, additional targeted funding for struggling residential providers in regional and remote areas, another $60 million a year for home care subsidies in response to rising costs and a long-term sustainable aged care funding strategy.

Related coverage

Peaks call for $735 million a year to bridge funding gaps

Peaks call for funding to match care costs

Trend of loss-making facilities continues

Provider groups call for an ‘adjustment payment’

Australian Ageing Agenda is a media partner of the conference.

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  1. There is a simple solution to part of the problem: Look at the Medicare money paid to hospitals for bed occupancy (only) and offer this to the RACF providers to apply transition and rehab care back to CDC and home care or respite and transition into long term care.

    Current ACFI funding is not enough per resident per day and more needs to be done to meet this high care service.

  2. It’s a shame that they are dragging their feet on the ACFI restructure. Simply done, this would be a set rate per resident per day on admission to an aged care facility. Do away with the funding instrument altogether. Work out a fair amount per resident. This would stop facilities over claiming and rorting the system and allow facilities to budget in the real world not in fantasy ‘what if’ land.

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