Providers sitting on $329m in unspent funds

Home care providers are holding $329 million of unspent funds on behalf of consumers and this could increase substantially in the medium term, ACFA says in its latest report.

Home care providers are holding $329 million of unspent funds on behalf of consumers and this could increase substantially in the medium term, ACFA says in its latest report.

The figures have sparked calls by the Aged Care Financing Authority for a policy review amid concerns the unspent funds could be used more effectively elsewhere.

In its July 2018 report released on Tuesday, ACFA says the sum equates to average unspent funds per consumer of $4,613 as of 30 June 2017 – a 26 per cent increase of $946 from $3,667 per consumer the previous year.

“This level of unspent funds represents a large amount of funds not being used for care services,” the report says.

“Unspent funds may accumulate as a result of consumer choice to save a proportion of their budget for future events, or because the consumer does not require all the funds allocated to them. In the latter case, the funds could be used more effectively elsewhere, including unmet demand.

“ACFA considers that a review of policies concerning unspent package funds and the implications for the home care package program is warranted.”

COTA CEO Ian Yates said the figure was not entirely surprising but he said it was important to understand why money was accumulating.

“For example, some funds are being saved up for a significant purchase, such as equipment, or a longer respite period. Some are due to people having being allocated a higher level package than they currently require and not using all of it,” he told Community Care Review.

Financial performance

The financial performance of home care providers was relatively strong with 75 per cent of providers reporting a profit, however there was a slight decrease in profit from the previous year.

The report says StewartBrown surveys for the nine months to March 2018, where the impact of recent reforms are likely to be reflected, indicate that average revenue per client declined by 2.5 per cent, or $1.87, per day, compared with the 12 months to 30 June 2017.

In terms of overall financial performance, the StewartBrown survey indicates that earnings before tax per client per day in the home care sector declined from an average for all providers of $5.37 for the 12 months to June 2017 to $4.39 for the nine months to March 2018.

Adjusting to consumer directed care

The report says the home care sector is continuing to undergo significant change and providers and consumers are still adjusting to consumer directed care.

“These changes give consumers greater control over their own lives by enabling them to make choices about the types of care and services they purchase and from whom they are purchased.

“However while these changes are a positive step for consumers in terms of greater choice and flexibility, consumers need to be better supported in order to exercise informed choice.”

It notes the 2018-19 Budget responded to this need by providing funding for the development of system navigators to guide consumers and with funding to improve the MyAgedCare website.

The future

ACFA says ongoing demographic changes will see an increase in demand for aged care with the proportion of people aged 85 and over growing by nearly five per cent of the population by 2055, compared with just over 2 per cent today.

Government expenditure on aged care is projected to nearly double from 1 per cent of GDP currently to around 1.7 per cent of GDP by 2055, driven by wage increases and the increasing complexity of chronic health conditions in ageing populations.

The demand for aged care services will expand with the ageing of the population, in particular a rapid expansion in the oldest age groups.

It notes the challenges of supplying enough aged care to meet demand is likely to be felt in the next 10-15 years as the baby boomers begin to enter the aged care system.

The numbers on home care

The aged care sector represents 1 per cent of GDP, provides services to 1.3 million Australians and directly employs over 366,000 people.

It is one of the fastest growing and arguably most important industries in the country, according to ACFA, which notes the sector is still adjusting to many changes including giving home care consumers choice of provider and services.

What the government is spending on aged care

  • Total of $17.1 billion up from $16.2 billion. Expected to reach $18.6 billion next year and $22.2 billion in 2020
  • $2.4 billion on home support
  • $1.6 billion on home care
  • $11.9 billion  on residential care
  • Of the total aged care budget, 66.2 per cent is spent on residential, 16.9 per cent on home support, 11.6 per cent on home care and the rest on flexible and other care

What’s being provided in the community sector

  • Subsidised home support or care provided to 33 per cent of people aged 70 and over
  • 97,516 home care packages, up 10 per cent up from 88,875
  • 722,838 people getting CHSP
  • 62,089 getting HCC in Western Australia
  • 108,000 on the national prioritisation queue at March 2018

How home care is doing

  • Home care providers: 702, up from 496
  • Home support providers: 1,621
  • Revenue: $1.85 billion
  • Expenses: $1.65 billion
  • Profit: $201 million
  • Commonwealth funding: $168 billions
  • Consumer contributions: $150 million
  • Unspent funds: $329 million

Who the workers are

  • 366,000 paid age care workers, less than half in home services
  • High job satisfaction but concerns about pay and perception that aged care isn’t valued
  • 14 per cent of home support and home care workers are casual or contract
  • Average age of direct care employees is 52
  • 23 per cent of home support workers born overseas

Read the full report here

Tags: acfa, aged-care, community-care-review-slider, financing, home-care, unspent-funds,

3 thoughts on “Providers sitting on $329m in unspent funds

  1. Perhaps the summary of ‘who the workers are’ might also state (presuming it’s in the report) the following, using a gendered lens:

    * the proportion of aged care workers who are women
    * the proportion of aged care management who are men

    Sometimes, discussions about aged care do not reflect the whole sector when it focuses on direct care/support staff or nurses to the exclusion of those not in direct care, or does not focus on the ramification of gender. Unfortunately, the report focuses on funding and finance but we need to remember that the aged care workforce is critical at any level. Women represent more than half its workforce so women are important at every level: economic, social, political, environmental, etc

  2. The National waiting list for Home Care Packages is a joke. My wife has been approved a Home care Package Level 3 and afforded Medium classification and has been advised it is likely to be 12 months before the HCP will be activated.

    This is a joke for 2 reasons:

    1- The ACAT assessment determined her needs at that time – Not what they will be in 12 months time – Her condition is deteriorating daily and it is anticipated in 12 months she will be incapable of derivie any benefits from the approved HCP;

    I am informed there are only two Priority categories viz High (15%) and Medium (85%) – This is illogicsl

  3. It is so sad to work in a sector where the need is obvious but the ability to do something about it is non-existent.
    A 95 year old blind lady living alone is not high priority ?
    A 100 year old who has managed until now without support, is told it will be a year before a package is allocated ?
    You are correct Peter – the package assigned should be the level that has been approved but this is no longer the case.

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