The Albanese Government is increasing funding for residential aged care from next month, as pressure mounts on the Government to address problems across the sector.
From 1 October, the Australian National Aged Care Classification (AN-ACC) price will rise to $303.19 per resident, per day. The increase comes at a difficult time for the Albanese Government, which has faced mounting scrutiny over its handling of aged care in recent weeks.
A Four Corners investigation into the controversial IAT algorithm raised fresh questions about how artificial intelligence is being used to assess older Australians’ care needs and determine funding. At the same time, state and territory health ministers have been increasingly vocal about the number of older people remaining in public hospitals while waiting for aged care or other appropriate support.
The issue has become a significant pressure point for hospitals, with governments under pressure to find ways to move older patients into more appropriate care settings and free up hospital beds.
Against that backdrop, the Federal Government says the latest funding increase will provide additional support for more than 200,000 people living in residential aged care.
The Government says the increase is part of its response to the Royal Commission into Aged Care Quality and Safety, which recommended a funding system capable of keeping pace with the actual cost of providing care. However, the increase will not apply to every component of residential aged care funding.
The hotelling supplement, which contributes towards everyday costs including food, cleaning and laundry, will remain at $22.15 per resident, per day for now.
The Government has asked the Independent Health and Aged Care Pricing Authority (IHACPA) to review the supplement, with the review expected to inform any future changes. The Government will also maintain the existing care minute requirements and the current AN-ACC fixed and variable funding categories.
It says the decision is based on IHACPA advice and is intended to ensure funding continues to reflect the costs associated with caring for residents across Australia.
The Government estimates it will spend $47 billion on aged care this year. It also points to a $1.7 billion commitment in the 2026-27 Budget designed to encourage the construction of 5,000 additional aged care beds each year.
The shortage of appropriate aged care places is also increasingly being felt beyond the sector itself, with hospitals carrying the consequences when older people cannot transition into suitable care.
Aged Care and Seniors Minister Sam Rae said funding aged care properly remained a priority for the Government.
“Making sure older Australians and their families have a quality, affordable and safe aged care system that is properly funded is a priority of the Albanese Government,” he said.
The Government will now need to demonstrate that the additional funding translates into better outcomes for older Australians, particularly as pressure continues to build around hospital access, aged care capacity and the way care needs are assessed and funded.
