A new aged care taskforce will be established to review the sector’s funding arrangements and inform the final design of the new in-home care program – which will now commence on 1 July 2025, the government has announced in this week’s budget.
Most recently pushed back a year 10 months ago, the latest delay in commencing the Support at Home program is in response to feedback and to allow time to further refine the design, according to the budget material. It will be matched by the extension of existing grant arrangements for the Commonwealth Home Support Program for a further 12 months to 30 June 2025.
There’s a total of $172 million over four years allocated to home care reform in the budget papers, including $700,000 for the new aged care taskforce in 2023–24, which will also develop options for funding a fairer and more equitable aged care system.
Federal Treasurer Jim Chalmers’ second budget delivered on Tuesday evening includes funding for aged care across a range of initiatives including worker registration, viability, nutrition, transparency, access to doctors and disability support, an interim First Nations Aged Care Commissioner and more.
It has brought a mostly positive reaction from stakeholders, which you can read about in our report here: Budget: much to like, more to do.
Reduction in residential care provision ratio
This budget also includes a $2.2 billion saving over three years from 2024–25 through a temporary reduction in the residential aged care provision ratio from 78 to 60.1 places per 1,000 people aged over 70 years.
That comes in response to the increasing preference of older Australians to remain in their homes, according to the budget papers, and will partially offset a number of new funding measures mentioned above and below including home care and regulatory reform, provider support initiatives and pay increases for workers.
Better wages
But the big-ticket item for the sector is the $11.3 billion – which was revealed in the pre-budget announcement we reported on last Thursday – to fund the 15 per cent pay rise for more than 250,000 aged care workers. This includes an increase over four years of:
- $8.5 billion in residential aged care funding
- $2.2 billion in Home Care Packages program subsidies
- $310 million Commonwealth Home Support Program grants
- $236.8 million in flexible aged care programs funding
- $82.5 million in Veterans’ Home Care and Community Nursing fees.
Plus, there’s $98.7 million in funding for leave liabilities in 2023–24.
In his budget speech, Mr Chalmers praised aged care workers and said the pay rise would help retain, reward and recruit the hard working people who cared for people’s loved ones as they grew old. “The message from our government to the aged care workers of Australia is very simple: you deserve every cent.”
In a statement issued on Tuesday night, Minister for Health and Aged Care Mark Butler added that aged care workers had been undervalued and underpaid for too long and that this wage increase was the right thing to do.
“This budget continues our strong agenda on aged care, increasing our workforce and improving care, transparency and accountability in the sector.”
Regulatory changes
Overall, the aged care budget handed down last night includes $36 billion in funding in 2023-24.
That includes $25.3 million next financial year for a preliminary report on the capability review of the Aged Care Quality and Safety Commission.
There’s also $72.3 million in 2023-24 for a new regulatory model ($59.4 million) and prudential framework ($12.9 million) to go with the new Aged Care Act.
This investment will improve quality and safety and restore trust and confidence through changes in how providers are regulated, Mr Butler and Minister for Aged Care Anika Wells said in a joint statement. It will be complemented by:
- $12.9 million over two years to strengthen food and nutrition reporting, direct expert dietary advice to providers and embed improved dining experiences for aged care residents
- $1.3 million to begin Monthly Care Statements with information on care provided and occurrences of significant change or events for residents
- $126.7 million over four years to enable continuous improvement and enhance Star Ratings.
For the new Act, there’s $81.9 million over three years to develop and deliver a Bill and associated technology changes.
This budget also includes $59.5 million over four years to progress the National Worker Registration Scheme, and will involve engaging with the aged care, health and training sectors, according to the budget materials.
Viability, rural and remote, and Indigenous
The Albanese Government’s second budget also includes continued advisory services for aged care providers to improve capability, better manage financial risk and expand professional support to providers in small-to-medium rural towns, with aged care providers at greatest financial risk to be offered a new grant to help them improve their performance, the budget glossy shows.
Overall, there’s $98.7 million over two years in the budget to support provider viability, which particularly targets providers in rural and remote areas.
Rural and remote communities also benefit from $47.2 million over four years to strengthen access to care and support through integrated services and workforce including establishing new First Nations assessment organisations.
There’s a further $77.3 million over four years for the National Aboriginal and Torres Strait Islander Flexible Aged Care Program to support access to high quality, culturally safe care for First Nations elders.
There’s also $8.2 million to build the capacity of Aboriginal Controlled Organisations to ensure on Country services and $1.6 million to fund an interim First Nations Aged Care Commissioner.
Access to aged, health and disability
This budget also includes $41.3 million over four years for systems that will assign residential care places to people rather than providers.
There’s also $112 million over four years for new incentives for general practitioners to provide care to aged care residents.
A further $487 million over four years will extend the Disability Support for Older Australians program to deliver consistent, timely and quality disability services to older people with disability so they can live in their homes and communities.
Home care
Elsewhere for home care, the budget provides $166.8 million for 9,500 additional home care packages to be released in 2023-24. There’s also $11.9 million to expand the quality indicator program to in-home care services.
Within the $172 million for home care reform mentioned previously, there’s:
- $10.9 million over two years for a trial of an assistive technology loans program
- $73.1 million in 2023–24 for ICT capability development
- $15.7 million over two years for single comprehensive assessment.
Ms Wells said the government was ambitious for aged care and determined to ensure older people received safe, high quality support.
“This budget meets these challenges head-on, with targeted and responsible investments that put the health, wellbeing and dignity of older Australians receiving aged care front and centre.”
Other measures previously announced include:
- a change in direction for the $350 million earmarked for residential aged care providers to fund onsite pharmacists from July, with the funding now going to community pharmacies to deliver enhanced outreach medication management programs for aged care residents
- a new Aged Care Industry Labour Agreement that aims to promote increased recruitment and retention in the aged care workforce.
The new funding announced in this aged care budget is on top of the $3.9 billion for the aged care sector announced in Mr Chalmers’ inaugural budget last October to largely pay for 24/7 registered nurses from July, and a sector-wide average of 200 minutes of care per resident per day from October.
Main image: Treasurer Jim Chalmers delivering the Federal Budget to parliament
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