Aged care costs higher than government recognises

The release of the latest fees and charges by the Department of Social Services shows an indexation rise of just 1.3%, despite ABS data showing costs for healthcare alone have risen by 4.4% in the past year.

“As the voice of aged care, LASA urges the department to reconsider how it calculates indexation for aged care because the true costs of care are not recognised,” says Patrick Reid, LASA chief executive.

“Current funding levels are one-third of what is needed for providers to keep up with rising costs, let alone expand their services to meet rapidly growing demand with 2,000 Australians turning 65 years every week,” Mr Reid says.

According to Mr Reid, successive federal budgets have stripped more than $700 million from the industry, while providers continue to face increasing costs for health care, staff wages and superannuation and infrastructure.”

“Although we have seen some increases to aged care funding, its value is completely outstripped by the true costs of care. The impact of this affects everyone – age service providers, staff, people receiving aged care services and their families,” he says.

The Treasurer’s own intergenerational report noted the main drivers of aged care costs were both increasing provider costs and growth in the number of people aged 70 and over.

LASA has supported changes that see increased consumer contributions, but it will take time for these changes to have an impact and they are only part of the solution to ensuring sustainability within age services.

“Consumer co-payments should not be an opportunity for government to starve the industry or shirk its responsibility to fund aged care properly,” Mr Reid says.

“Recognising the true costs of age services through a review of indexation calculations and realistic funding is the only way we can guarantee a sustainable age services industry that meets the needs of all older Australians.”