Feb 20, 2020

$12 billion in aged care funding, yet people are still malnourished. Why?

There have been a number of distressing stories recently about aged care homes either in financial distress or even having closed. Some discussion has been around the impact of the new Aged Care Quality Standards which came into force in July last year, suggesting that meeting these imposes additional financial burdens which impact Aged Care Homes’ viability.

Organisations may have needed to address staffing, to ramp up training or to contract outside assistance to bring their systems and processes into line with the new Standards. I sympathise completely with the challenges providers face working to ensure optimum care on the funding they receive and know many in management who feel similar pressure. 

But the fault is not with the Standards – after all the Royal Commission into Aged Care Quality and Safety is uncovering many, many ways the system needs improvement, particularly in addressing malnutrition!

The fault is with funding and in many cases with where government funds end up. 

The Aged Care Quality and Safety Commission (ACQSC)’s new Standards focus on the person in care and their needs. This is exactly what is needed and what has been needed for years. 

I have the advantage of being an independent consultant to aged care homes, and I visit different places and see the good and the bad. There are places where my heart breaks to see staff clearly stretched to breaking point trying to deliver the care they desperately want to achieve – this is just not sustainable and great people are leaving in droves, unable to keep that up. 

While I see places where care is absolutely not what it should be, I also see places where the situation is reversed; where residents enjoy quality care and respect and the staff smile.

The Standards are designed to deliver the latter to every recipient of aged care.

If the costs associated with the Standards are a challenge to some providers of care, then it is not the Standards that are the problem, it is being able to fund the changes necessary in aged care to meet them. That is about how much funding is made available, but also where it goes.

I’m a dietitian and I’m biased.  I want every person being supported in aged care to enjoy meals, drinks and snacks they love while getting good nutrition. Some providers are willing to bring in chefs to prepare fabulous meals and consider that to be enough.  It’s certainly an excellent starting point because of course, quality food and drink are important.

But the focus on production of food alone misses the point.  

It doesn’t matter how good the food is, it’s of no benefit unless its eaten and I see the new Standards addressing that distinction. There has to be wider oversight of nutrition beyond what goes on the plate in the kitchen alone.  An aged care experienced dietitian not only ensures that appropriate, quality food is produced, but also that it supplies adequate nutrition and that there are systems and processes in place to get it from the kitchen and safely into the mouth of every resident. 

In my experience aged care providers frequently resist the comprehensive services of dietitians beyond the occasional consult with individual residents in care. Their aim of reducing upfront costs however is often short-sighted: better nutrition is not only of immense benefit and value to residents, it also reduces overall costs of care in many, many ways.

This reluctance also goes some way to explaining why we have such appallingly high rates of malnutrition and complaints about food – there has not been appropriate oversight or financial support for good nutrition. 

Yes, I get it, there is not an unlimited pool of government funds and everyone wants more: there are many, many vital and deserving causes.  But to blame the new Aged Care Standards, which after all are rightly designed to provide dignity and a well-deserved quality of for people who need the support, is wrong. 

What we do need to look at is the funding: not only how much is made available but making sure all the money Australians pay in taxes to support the care of our elders is actually used for that care. I willingly pay tax to support wider society and more, but I am outraged when I read that some aged care providers seem to be gaining financial benefit from government funds while our elders receive substandard care as demonstrated by ACQSC assessments and the Royal Commission. 

The Guardian has reported that some for-profit providers have complex tax arrangements. It may be that their homes in Australia pay ‘rent’ for their facilities to a parent company in an overseas tax haven, there may be other complex arrangements in use.  However it happens, this means that tax contributions needing to be paid in Australia are greatly reduced.  

The Guardian reported that in 2015-16, one aged care provider paid tax of just $105m despite a profit of $663m in its aged care business alone and $7.5 billion overall.  Another was reported as paying $2.4m on a declared profit of $7.9m, despite overall income of $572m.  A third company providing aged care services paid no tax at all.  

I’m no accountant but I can see no way that arrangements designed to reduce tax can possibly be benefiting the residents in Australia who are facing malnutrition on less than $10 a day for all their food, drinks and snacks.  

Remember, this is ‘government money’ – the money we everyday taxpayers work hard for.  It is likely that the combined tax paid by staff of these aged care homes is greater than that paid by some very profitable aged care organisations employing them!

Certainly, even not-for-profit businesses are feeling the pinch, but what if the tax funds received if such complex tax arrangements were not in place, were instead added to the aged care pool?  Extra hundreds of millions in funds could provide the additional staff so desperately needed, and in my world, boost the now inadequate spend on quality food and the input from dietitians needed to reduce the appalling rates of malnutrition we see. 

Organisations might apologise for poor care and maybe some dollars come back after long legal action is taken, but I have seen little change on the ground. 

I think it is time for the government to make providers more accountable, not only for the care of residents, but also for transparency in the way the money they receive is spent and particularly for any expenses destined for off-shore corporations. An amendment to legislation attended on the very last day of Parliamentary sitting in 2019 sought to address how fund were spent and provide us with some of the transparency aged care residents deserve. But alas, as many readers will know that was unsuccessful. Taxpayers have a right to know where profits from government funded operations go.  Should this not be part of the contract when receiving such considerable amounts of public funds? Or is the government not interested in how funds are being spent and how profits are being applied?

There are many calls for additional funds to be made available for aged care and rightly so. But it would be outrageous if any of those funds intended to support those so desperately in need of good food, adequate nutrition and dignified care, ended up instead profiting companies outside the country by way of complex taxation arrangements. 

It’s time for transparency and accountability, not just in relation to the provision of care for our elders, but in how the funds provided by the public are spent on that care. 

I’m a very frustrated aged care dietitian, but I’m not giving up yet!

Image: Monika Podlaska, iStock. Stock image.


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  1. Aged Care providers should be required to have all their tax affairs within Australia and fully transparent. The same audited transparency as companies listed on the Australian stockexchange would be s good start.

  2. I too am appalled at the standard of care in many aged care organisation both residential and community based. I agree that government funding should be increased particularly to increase the number of home care packages and home based services provide to Australians needing care in their older years and in cases of disability. I agree that tax payers money should not be used to provide tax relief and subsidies to organisations so limit their tax liabilities on profits they are making particularly when those profits are going overseas. I agree that the standards are not the problem.
    What seems to be missing in the argument about increasing government funding is that these organisations are making profits from services that are providing substandard care. On top of government funding organisation charge clients substantial amounts of money just for the privilege of receiving that substandard care. The argument goes that the government funding only provides so much for food, staff, equipment etc but what always gets left out of the equations are the fees and charges levied on top of the government funding and often the (what i consider unconscionable) holding of equity in peoples homes and assets.
    These organisations say the government needs to give us more to meet the standards imposed. But how much of the additional moneys these organisations charge clients is being used to provide care instead of to make profits. Same goes for the not for profits. They are still making profits from care (Or show me where the funding is coming for their organisations to keep topping up their aged care businesses and how sustainable is that for them) Quality of care should come before profits or excess revenues.


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