NATIONAL UPDATE
KEY INSIGHTS FOR FUTURE POLICY DIRECTIONS HOW THE AUSTRALIAN GOVERNMENT’S COMMITMENTS WILL IMPACT OUR INDUSTRY
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n its 2021-22 Budget, the Australian Government announced a package of aged care funding measures totalling $17.7 billion over five years and its specific responses to each individual recommendation of the Aged Care Royal Commission’s final report. The Government’s response represents a major step forward for aged care policy, providing at least partial short-term relief on key pressures in home and residential care and setting in motion processes to deliver fundamental structural reform. While a number of issues have not been addressed, the focus for our industry must be the effective delivery of the ambitious commitments that have now been made.
Legislation
From a legislative reform perspective, much will depend on the new Aged Care Act (to become law in July 2023). This includes many details around reforms to regulatory arrangements, including governance and prudential rules.
Funding and program design
but this largely represents a catch-up. Residential care also benefits from the one-off payments made as part of the initial Royal Commission response. For rural and remote services, the ongoing uplift in the viability supplement provides some relief, but financial pressures will likely remain until at least the introduction of Australian National Aged Care Classification (AN-ACC)—which has a greater weighting for rural and remote costs—in October 2022. Minimum staffing recommendations are only being committed to in part, up to the 200 minutes proposed in phase one (with at least 40 minutes of RN time and an RN on-site 16 hours per day). This will initially be voluntary (though subject to public disclosure of staffing levels) from October 2022. These staff levels will then become mandatory the following year, allowing services time to recruit staff. Subsequent increases in care staffing or commitments to additional allied health have been referred to the new pricing authority and standard setting process. Another key issue will be how the market responds to the removal of ACAR in 2024.
Pricing authority. The Government has accepted an independent pricing authority, but this will take some years to commence, and the methodology and scope of responsibilities is unclear. Rejection of the recommendation for immediate indexation means that cost changes will be taken into account from October 2023. This seems likely to apply for both home care and residential care.
Home care. Home care benefits from a further 80,000 packages over two years, without a commitment to clear the queue. This is not particularly different to growth over the last two years, however some workforce issues may emerge.
Co-contributions. There is no clear process for action on broader issues regarding co-contributions, with the exception of the development of the Residential Aged Care Accommodation Framework, which will consider the role of Refundable Accommodation Deposits (RADs).
The overall design for home care remains less clear than in residential care. Although the Royal Commission’s recommendations on redesign were accepted, we suspect that the final design will depend on research currently underway.
Residential care. Residential care has the short-term benefit of a $10 supplement to the basic daily fee from July 2021,
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Additional funding commitments for respite indicate that Government is becoming aware of the increased strain that more people ageing at home will place on the respite system.
The further 12-month extension of CHSP contracts to July 2023 give existing CHSP providers advantages that come with incumbency as the home care program expands, though
