Govt announces long awaited aged care reforms

The Government has announced its long awaited $1.5 billion package of aged care reforms – entitled ‘Securing the Future of Aged Care for Australians’ package.

The Minister for Ageing, Senator Santo Santoro, said the package would provide the financial security needed by the aged care industry to ensure it is able to grow and meet the demands of Australia’s ageing population.

“This package strikes a sensitive balance between the needs of care providers, care recipients and the taxpayers who help fund the provision of services,” Senator Santoro said.

The package allocates $1 billion to increasing Government payments for residents of aged care homes. Additional care funding will be targeted to those with the highest care needs, while residents with moderate asset levels will also receive extra accommodation support.

It also increases the availability of aged care in the community, with 7,200 additional community care places to be delivered over the next four years, at a cost of $411.7 million.

These additional places will take Australia’s aged care ratio from the current target of 108
places per 1,000 people aged 70 and over to 113 places per 1,000 people aged 70 and over in 2011.

In addition to this commitment to community care, residential aged care will be available for an increasing number of people, particularly those requiring higher levels of support.

The package acknowledges that the cost of building has increased significantly in recent years, making it difficult for aged care provides to bring new high-care places on line.
The Federal Government will increase its accommodation subsidies for those with moderate asset levels. It will also allow care providers to implement reasonable increases in accommodation fees for those with higher levels of assets.

The Government hopes that the stronger revenue streams that these changes will generate for aged care providers will give them the confidence and financial stability needed to make new investments in high level care. In turn, that will ensure a ready supply of high-care places as Australia’s population ages.

Existing residents will be protected from any increase in fees and charges, and some will have a reduction in fees as a result of changes to aged care income tests.

The accommodation fees and subsidies will only be permitted where aged care homes meet the new, higher building standards required by the end of 2008.
The Government’s new Aged Care Funding Instrument (ACFI) will be delayed until 20 March 2008, rather than 1 July, 2007 following requests from providers for additional time to prepare for the new system.

For more details visit www.health.gov.au/securingthefuture