Federal budget commits to aged care reform

The Albanese Government has delivered on its election promises by gifting $3.9 billion to the aged care sector in its inaugural budget this week.

At its core, the reform package announced on Tuesday evening makes good on 23 recommendations of the aged care royal commission including:

• committing to increase the number of care minutes residents receive – 200 minutes including 40 from registered nurses from 1 October 2023; 215 minutes including 44 from RNs from 1 October 2024
• requiring aged care homes to have a registered nurse onsite 24/7 from 1 July 2023.

The above commitments will be funded through the new Australian National Aged Care Classification funding model with a combined investment of $2.5 billion over four years.

To help providers adjust to the new funding model – which was introduced on 1 October – $43.8 million has been set aside for the AN-ACC Transition Fund.

In a statement, Minister for Health and Aged Care Mark Butler said: “Older Australians deserve respect and dignity in aged care and this budget takes the first steps to deliver the reforms that they so badly need.”

In the same statement, Minister for Aged Care Anika Wells said: “The government embraces both the spirit and intent of the recommendations of the Royal Commission into Aged Care Quality and Safety, and through this budget we are taking action.”

Other budget commitments

Federal Treasurer Jim Chalmers’ maiden budget – which has been widely praised by stakeholders – also earmarks $810.2 million to continue to reimburse residential and home aged care providers for direct costs related to Covid outbreaks.

More than $300 million worth of funding has been set aside to modernise the sector’s information and communications technology to reduce the administrative burden for the more than 2,000 providers that interact with the government’s aged care reporting systems.

Almost $70 million has been pledged to implement a Strengthening Regional Stewardship measure to expand the Department of Health and Aged Care’s presence in regional areas, including in eight new locations.   

At a cost of $38.7 million, a new independent Inspector-General of Aged Care will be installed to target systemic issues affecting older Australians.

Individual aged care homes caring for older First Nations peoples, older people from diverse communities, those living with dementia and those living in regional areas will receive a total of $26.1 million.

Meanwhile, funding for the Disability Support for Older Australians program will be extended through $53.5 million – DSOA supports older people with disability who received specialist disability services from the Continuity of Support Program, but were not eligible for the National Disability Insurance Scheme.

Initiatives to progress in-home aged care reforms will receive $23.1 million. This includes funding for additional consultation, a large-scale trial of a new assessment tool, and the establishment of a Service List Advisory Body.

The package also delivers on the royal commission’s recommendation that there be installed a dedicated Aged Care Complaints Commissioner.

Another royal commission recommendation recognised in the reform package is a registration scheme for personal care workers. At a cost of $3.6 million, the scheme includes a code of conduct, ongoing training and English proficiency.

Continuity of care will also be improved by requiring providers to preference direct employment. This is despite advice by the Productivity Commission that providers avoid preferencing direct employment.

The Maggie Beer Foundation has received $5 million over three years to educate and train staff to meet new nutritional standards.

Workforce the “biggest priority”

In its budget media release, the department said the workforce was its “biggest priority”. To back this up, Labor’s first budget in nine years allocates $185.3 million to help ease the workforce crisis in both the health and aged care sectors.

Almost $30 million will go towards the upskilling and training of nurses, pharmacists and other health workers. A key priority is an investment in 20,000 extra university places and 180,00 fee-free TAFE and vocational education places – with at least 15,000 of the TAFE places being reserved for aged care.

The workforce package includes support for more GPs, nurses and allied health professionals to work in regional and rural communities of Australia. It also invests in First Nations health professionals.   

Regarding the work value case currently before the Fair Work Commission, the government has reiterated its support to fund any increases to the award wages resulting from the FWC decision, which is expected this summer.

Reform package at a glance:

• 24/7 nurses and 215 care minutes – $2.5 billion over four years
• AN-ACC Transition Fund – $43.8 million over three years
• research and consultation for reforms of home care – $23.1 million over one year
• Aged Care Complaints Commissioner – $9.9 million over two years
• Inspector General of Aged Care – $38.7 million over four years
• personal care workers registration scheme – $3.6 million over one year
• improved food and nutrition – $5 million over three years
• Strengthening Regional Stewardship of Aged Care – $68.5 million for four years
• ICT overhaul – $312.6 million over four years
• funding for individual facilities – $26.1 million over four years.

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