Jun 01, 2023

Aged Care: Let’s talk

As National Seniors Australia’s Chief Advocate, Ian Henschke works to raise the profile of older Australians and strengthen their collective voice. [Source: Shutterstock]

The Government has just released the draft National Strategy for the Care and Support Economy. It talks about the need for a “national conversation” about the split in contributions between government and individuals. 

Should people pay more for aged care? Let’s talk.

From July 1, 2023, at least one Registered Nurse (RN) must be on-site and on duty at all times at every residential aged care facility. This requirement prompted some providers to say they’re closing, and since last September twenty-three homes have shut or announced they’ll shut.

In April, the Brightwater Care Group in Western Australia said it was closing three nursing homes, affecting 75 residents. But added in a press release that it recently opened a 128-bed facility. It makes you wonder what’s really going on.

Sydney’s Wesley Mission said it was getting out of residential care citing “challenges to workforce and flow on impacts from the reforms to aged care”. It shut one home last year and then announced it was closing the remaining three but said it would continue to provide home care and retirement living “to help people stay in their homes for longer”.

These closures have become a political issue as well as an aged care welfare issue. The opposition says it’s because of the Labor Government’s “reckless” push to speed up improvement in aged care. Labor’s announcement to get nurses into nursing homes 24/7 was a year ahead of the previous Government’s schedule.

So, are homes closing because it’s all got too hard to improve the workforce to provide better care?

National Seniors Australia always looks at the evidence and it’s worth noting although 23 homes have closed in the last nine months, we know from government data 51 homes closed between 2020 and 2022.

We also know from the Organization for Economic Cooperation and Development (OECD) Australia has one of the highest rates of residential care for people over 80. Australia has 18.9% of its over-80 population in care compared with Germany’s 10.7%, Canada’s 12%, and Sweden’s 12.6%.

But now that’s changing as more and more people stay at home for as long as possible. The revelations of the Royal Commission into Aged Care Quality and Safety and the tragic events of COVID-19 have seen that trend grow. It’s so strong the latest budget showed savings of $2.2 billion in aged care costs over the forward estimates because home care is cheaper than residential care.

The average occupancy rate in residential care homes in Australia was 95% in 2018, by 2020 it had fallen to 88% and the most recent figure from 30 June 2022 revealed an occupancy rate of 86%.

We know people are going into residential aged care with more frailty, more complex health issues, and more dementia. Aged care homes are becoming more like hospices. Perhaps we should see them as an integral part of the hospital system and fund them accordingly to provide more nursing care, dementia care, palliative care, and end-of-life care.

The Royal Commission outlined the urgent need for better-paid and better-trained workers and laid out a pathway for better care. Better pay is happening, now we need better care and better training. 

How to fund this is the big question. The Royal Commission recommended a levy. This was rejected by the Government and the opposition. But seniors have made their view quite clear.

Remember, although the Government pays most of the residential aged care costs, non-pensioners pay almost $32,000 per year because of means testing. Pensioners lose the bulk of their pension paying almost $22,000 as part of their contribution. 

In addition, the provider can have separate charges. And there’s the payment of the Refundable Accommodation Deposit (RAD ) or the Daily Accommodation Payment (DAP). It’s complex but suffice to say there’s user pay at play.

Our 2021 research paper, Planning for aged care costs, showed more than 90% of National Seniors Australia members owned their home, so the idea of staying in your home is a reality for most. Using some of that equity to stay out of residential care and buy extra care to top up a home care package may be the way of the future.

Have your say on the National Strategy for the Care and Support Economy draft here.

You can read other National Seniors Australia research here.

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