Leave changes cost providers up to $100,000

Changes to pre-entry leave arrangements in residential care, which were implemented by the government before Christmas, will cost some providers up to $100,000, ACSA has warned.


Changes to pre-entry leave arrangements in residential care, which were initiated by the former Labor government and implemented by the Coalition Government before Christmas, will cost some providers up to $100,000, Aged and Community Services Australia (ACSA) has warned.

As well as the financial impact of the changes on providers, older Australians will feel greater pressure to secure a bed and move in quickly which could lead to ‘bed blocking’ in the sector, the peak body said.

ACSA also criticised the lack of impact assessment, industry consultation or notification prior to the changes taking effect on 1 January.

Pre-entry leave is widely seen as a valuable period in which the new resident can make arrangements for their entry into residential care, while staff use the time to clear and clean the previous resident’s room, and in some cases undertake maintenance work which requires the room to be empty.

Providers previously received the full basic subsidy for a period of up to seven days prior to a resident entering a facility, but since 1 January this has been reduced to 30 per cent of the full subsidy.

In an email to providers on 14 December, the Department of Social Services advised that under the changes, providers would also no longer receive a range of supplements on behalf of the resident prior to their entry to the facility, which included the accommodation supplement and the concessional supplement.

While the former government predicted the changes would provide a saving of $7.6 million in the first full year of operation in 2014-15, ACSA said it regarded this a “meagre budget saving” compared to the red tape reduction savings it had highlighted to the Commission of Audit.

Echoing this, David Sinclair, director of accountancy firm Stewart Brown, said that while it was understandable the government was looking for savings, “this cutback appears to be a punitive measure that will adversely affect both aged care providers and consumers alike.”

The change, in reality, would save very little when measured against the total government outlays in the aged care portfolio, Mr Sinclair told Australian Ageing Agenda.

“This is also against a background of the government suspending the Workforce Supplement program which had an estimated cost to the budget of some $1.6 billion – funds which were supposed to go back into the mix to be allocated to providers.”

In a letter to the Minister for Social Services Kevin Andrews, ACSA CEO Professor John Kelly challenged the government’s description of the changes as a harmonisation with leave arrangements in hospitals and other parts of the aged care system. “Simply put, a hospital is not similar to an aged care facility. Similarly, issues relating to leave arrangements for home care are not substantially similar to residential care,” he said.

According to feedback from ACSA members, low care residents generally took pre-entry leave at an average of four days, while high care admissions were more immediate.


Preliminary economic modelling from ACSA members suggested the changes would cost members between $20,000 and $100,000, depending on factors such as size.

Providers would also have to manage “various perverse matters such as ensuring the bed is ‘turned over quickly’ while managing the sensitivity of relatives and staff who are focused on grieving for the past resident rather than the quick rejuvenation of the room for the next arriving resident,” he said.

However, the “emotional impact” of the changes would be borne by older Australians, Professor Kelly said, as they would feel greater pressure to secure a bed and move in quickly.

“This may even lead to a regrettable situation akin to ‘bed blocking’ in the hospital sector. As the finite resource of the aged care bed is recognised, the potential resident may secure the bed at the earliest opportunity and move in, to guarantee an option, even if they are unsatisfied with the particular option.”

Professor Kelly requested the government review the change which was initiated by the Labor government with “no consultation and within short timeframes.”

“The costs of these changes are not proportional to the benefits,” he said.

The department’s current advice regarding pre-service leave is available here

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