Leading Age Services Australia, the voice of aged care, says rates of payment of Australian Government aged care subsidies and supplements published yesterday will further harm the ability of providers to deliver the care and support older Australians need and deserve.

The Governments schedule of subsidies and supplements for 2019/20 reveals that funding will increase by just 1.4% from 1 July. This comes on the back of the Fair Work Commission’s recent decision to increase modern award wages and the National Minimum Wage by 3 per cent effective from 1 July.

“Indexation of funding for aged care in Australia has not kept pace with rising wages of aged care staff or the growing needs of older Australians and the costs of their care,” LASA CEO Sean Rooney said.

“This has been a compounding issue with wages increasing by more than 3 per cent per year over the last three years, and with indexation now confirmed as being set at less than 1.5 per cent, the situation for many providers is critical.

“Independent industry analysis reports an estimated 45 per cent of residential aged care facilities are operating at a loss and the average earnings per client in home care continues to fall, making many services unsustainable.

“The situation is even worse in rural, regional and remote areas where access to staff and higher costs are further compounding financial stress and putting the viability of some services under direct threat.

Mr Rooney said the Aged Care Financing Authority’s (ACFA) submission to the Royal Commission recently stated that feedback from its consultations ‘suggest there is an increasing number of mainly small providers facing financial and quality problems who are seeking to leave the industry.’

“Despite the pressure they are under, residential care providers continue to increase the number of hours of care per resident, but this cannot continue, and some providers have already been forced to cut back on staffing,” he said.

“In home care, a higher hourly wage means that fewer hours of care can be purchased by older Australians if there is not a commensurate increase in the value of packages.

“The leading industry survey also shows that earnings for home care providers have almost halved in the last two years, putting services under increasing pressure just to stay afloat.

“While the Aged Care Royal Commission continues its important work, this Government must commit to urgent action now to address this funding emergency if the sector is to effectively meet the needs of the growing numbers of older Australians.”

 

About Leading Age Services Australia (LASA)

LASA is the national peak body representing and supporting providers of age services across residential care, home care and retirement living. Our purpose is to enable a high performing, respected, and sustainable age services industry delivering accessible, affordable, quality care and services for older Australians.

We represent providers of age services of all types and sizes located across Australia’s metropolitan, regional and rural areas. Consistent with the overall industry profile, 57% of our Members are not-for-profit providers, 33% are for-profit providers and 10% are government providers.

Our diverse and representative membership gives LASA the ability to speak with credibility and authority on issues of importance to older Australians and the age services industry.

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