The Prime Minister Scott Morrison yesterday has announced a $662 million funding boost to the Australian aged care sector, a day ahead of the commencement of Royal Commission hearings, and in the wake of media reports claiming budget cuts in 2015 had put pressure on aged care providers.

Almost half – $320 million – of the funding increase will go towards residential aged care and to the creation of 10,000 new home care packages – the equivalent of around $1,800 for every permanent resident of aged care, a statement from the Prime Minister’s office said.

Where will the new funding go?

The funding increase will go towards:

  • $282.4 million for 10,000 home care packages at all levels
  • $320 million subsidy boost for aged care providers for the 2018-19 year
  • $4.2 million for a mandatory quality indicator program, including an indicator on the use of chemical and physical restraint
  • $7.7 million to improve the safety, quality and integrity of home care
  • $35.7 million increase to home care supplements for those living with dementia and veterans
  • $4.6 million trial of a new residential care funding tool to replace the Aged Care Funding Instrument
  • $7.4 million for a business advisory service for residential and home care providers to help them improve their operations and share best practice.

Royal Commission witness hearings today

The funding increase comes ahead of the commencement of Royal Commission witness hearings today.

Senior counsel assisting Mr Peter Gray QC described how the aged care system operates in Australia, and how it is monitored and regulated. He talked of the changing demographics of the Australian population, and what that means for the aged care system. He said the growing number of people with dementia in Australia will be followed up later in the Royal Commission.

The family of Bob Spriggs, Barbara and Clive, also spoke of their experiences, and encouraged others to come forward and share their stories.

The Spriggs’ hearings will be followed by Prof Ian Yates AM, Chief Executive of COTA Australia, and John McCallum, CEO and Research Director of National Seniors Australia.

Government knew past aged care savings had impacted industry

The funding increase also comes after an article in The Australian revealed the government’s budget cuts in 2015 had had a negative effect on the aged care sector.

Details of the impacts were included in a departmental briefing report handed to the Aged Care Minister Ken Wyatt shortly before Scott Morrison announced the Royal Commission and denied funding cuts.

The report showed budget cuts resulted in “cutbacks to staffing” and notes that “increasing cost pressures will be putting pressure on the sector”, according to the article.

Older Australians “deserve our respect”

In announcing the funding increase, Prime Minister Scott Morrison said Australians needs to have a “culture of respect and care” towards older members of society.

“Older Australians have worked hard all their life, paid taxes and done their fair share, and they deserve our support,” he said.

Aged Care Minister Ken Wyatt said the LNP has delivered record funding to the aged care sector.

“Under the Liberal and Nationals Government, aged care funding is increasing by about $1 billion each year,” he said.

More funding is needed: LASA

Leading Age Services Australia, the peak industry body for aged care providers, issued a statement saying the funding boost is welcome recognition by the Government that more funding is needed to deliver effective care for older Australians.

LASA CEO, Sean Rooney, said, “The $320 million residential aged care component, which equates to approximately $1,800 per permanent resident over the next 18-months, is especially welcome as a short-term measure, given recent reports estimating that 43% of aged care facilities are operating at a loss.”

He said the announcement of the trial of a new new funding tool acknowledges the current approach is inadequate.

“It [ACFI] is the core funding arrangements for the sector, and how the funding tool is able to respond to the true cost of care, that has been our biggest ongoing concern.”

Mr Rooney said he hopes the upcoming Federal Budget on the 4 April will contain more funding for aged care.

“This is the only way we can guarantee a sustainable age services sector that meets the growing and changing needs of older Australians in all types of care settings,” he said.

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