Aged care funding – boost or blow?

Federal Minister for Ageing, Justine Elliot, announced a 1.7% increase for aged care subsidy funding, which she described as a ‘boost’. However the aged care sector has since described it as a ‘blow’, saying it is less than the inflation rate.

On 28 May, Mrs Elliot said that in 2010-11, expenditure on aged care services will increase to more than $10.7 billion, “an increase of nearly 9% over the previous year and nearly 30% under the Rudd Government.”

Over the next four years, Commonwealth subsidies and personal contributions from residents will average more than $72,000 each for residents of aged care facilities. Over this period, the Government will provide more than $47 billion in direct financial support, she said.

She noted that “The Productivity Commission is conducting a comprehensive inquiry into Australia’s future aged care needs and setting out a path for further structural reform so that Australia’s aged care system is better equipped to meet future demand”.

However, Aged and Community Services Australia (ACSA) said it was “incredulous” at the 1.7% increase in funding for aged care services.

ACSA chief executive officer, Greg Mundy, said it was almost impossible to understand how the Government could take pride in the announcement when CPI alone was 2.9% for the March Quarter.

“The dollar amount of $140 million sounds impressive but does not come close to addressing the costs of providing care and services for older Australians,” Mr Mundy said.

“The 1.7% will do nothing to stop the erosion of community care hours or help to pay more competitive wages for valued staff. It means the competition for staff will only get worse in aged care. The hours of community care an older person receives will continue to fall without more funding.

“Of course any additional funds help, but if the Government is serious about its health reform agenda and providing older Australians with access to high quality accessible and affordable care, it will need to do better than this.

“With any recommendations from the Productivity Commission inquiry into aged care still 12 months away, it seems the door has been closed on any real change to the status quo.

“Far from a funding boost, 1.7% is a funding blow.”