According to Federal Minister for Aged Care, Ken Wyatt, the Australian Government currently contributes approximately $17.5 billion a year to aged care. It’s been predicted that  number will increase to just under $21 billion by 2019-20.  

Earlier today the Federal Government released a new report, Alternative Aged Care Assessment, Classification System and Funding Models, outlining alternatives to to the current Aged Care Funding Instrument.  

The new report was prepared by the  Australian Health Services Research Institute at the University of Wollongong, which was commissioned by the Department of Health to analyse and evaluate the current status of funding and what other options couple be put in place.

“It’s important that we review the way we fund aged care to ensure we create an aged care system that is affordable, sustainable, flexible and responsive to consumers,” says Minister Wyatt.

The report provides a five different options for residential aged care funding. However, this isn’t the only review that is happening in terms of funding – a separate review of the Aged Care Funding Instrument is currently being initiated by Applied Aged Care Solutions.

“That review will focus on options to improve the current tool to make it less subjective including the feasibility of external assessment,” Minister Wyatt said.

“These two separate but important pieces of work will help inform the Government’s deliberations over the future direction for funding reform.”

“The aged care sector will continue to play a key role in this reform and there will be further consultation with the sector before any decisions are made on funding options.”

With an increasing ageing population, more and more people are accessing aged care services, “in 2015–16, more than 1.3 million older people received some form of aged care and with more Australians living longer and healthier lives, those numbers will increase”.

“To meet the level of demand for aged care services now and into the future the Australian Government needs to make sure its funding gives the best possible value for money,” says Minister Wyatt.

The healthcare sector have received many funding cuts over the past few years, and the biggest concern has been directed towards the aged care industry.

These new solutions for funding, released in today’s report, are being suggested not long after ACFI received $1.2 billion funding cuts last year, which were to span over the next four years. Among other hits, there was also the freezing of indexation in 2012 and the removal of the Payroll Tax supplement in the 2014 Budget.

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