May 26, 2020

Aged care providers seek class action against government over funding

An aged care peak body is exploring the possibility of a class action against the federal government over years of alleged underfunding in the sector.

Leading Age Services Australia has confirmed it is seeking preliminary legal advice on the proposition that aged care providers have not been adequately funded to meet their legal obligations.

Nursing home proprietor, Anton Hutchinson, said the government has failed in its “duty of care” to aged care residents, and has breached its contract with providers. 

Mr Hutchinson, whose family has owned Canberra Aged Care Facility for more than 30 years, said a small group of providers has been “pressuring” the peak body to investigate a class action for some time.

“Failed in its duty of care”

“Many believe that the Federal Government has failed in its duty of care to provide adequate funding to facilities to enable them to provide appropriate and sustainable care for vulnerable elderly Australians residing in residential care,” Mr Hutchinson wrote earlier this month to LASA in correspondence viewed by HelloCare.

“I believe the Government has breached its contract and a class action needs to be presented to the membership for consideration,” Mr Hutchinson wrote.

“This class action should present its case for future sustainability and seek compensation for the last five years’ losses that now sees 60 per cent of the residential care industry running at a loss, unable to maintain standards, stem necessary expansion for an ageing population and to continue to be significant employers across the country.”

He wrote the government has “failed their duty of care and hence endangered elderly residents by their neglect.”

Funding inadequate to meet legal obligations

LASA CEO, Sean Rooney, confirmed that LASA has sought “legal insight” into the proposition that residential aged care providers “have not been adequately resourced to meet their obligations under the requirements of aged care legislation”. 

He told HelloCare, “Large representative organisations like LASA have ongoing discussions with members on key issues impacting their operations and the care they provide to older Australians.”

Focusing the government’s attention on aged care

Speaking to HelloCare today, Mr Hutchinson said, “As a result of years of systemic underfunding the federal government is finally going to be taken to task with the proposal… of a class action.”

He said he hopes the move will galvanise the government into action.

“We are well aware that courts can’t change government policy, but we are aware that courts can bring public attention and government attention to a thing that no one is looking at.

“That’s our objective.”

Broken system needs fixing

Mr Hutchinson said the fact that so many homes are operating at a loss is a sign that aged care funding is inadequate.

“It can’t all be bad management, can it? There’s something wrong, and it’s time the government has a bloody good, hard look at it, and fix what they already know is broken.”

The latest research from accountants StewartBrown, which relates to the six-month period to 31 December 2019, revealed 56 per cent of aged care homes recorded an operating loss for the December six month period. In outer regional and remote homes, 71 per cent are operating at a loss, and in inner regional homes, 61 per cent are in the red.

StewartBrown says the results reveal “significant and urgent concern” about the ongoing sustainability of the sector. 

“The December six months showed a decrease in occupancy levels, the first overall decline over a period of time for at least five years.” Occupancy may have been further eroded by the COVID-19 crisis.

StewartBrown writes the sector urgently requires additional funding.

“Residential care is clearly and critically under-funded, both from a government and consumer perspective. 

“The financial concerns in relation to residential care cannot be overstated.”

Image: eclipse_images, iStock.


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  1. The loss is probably because more people are staying in their own homes for longer and getting assistance to do this. Facilities make money on everything and spend as little as possible. They are horrible places on whole. They are miserable deceitful waiting stations for people to die. Paying out more money will do nothing except line the pockets of the people who own the companies that run them.
    My mother’s care in a facility in Perth was so bad and so negligent that I spent five stressful years fighting them every day. I paid over $1,000 a week and had to do most of the basic stuff myself. Besides spending five years crying myself to sleep with worry every night. Simple things like changing them regularly (My mother had alzheimers) – I even bought continence aids myself and they were stolen to use on other residents constantly – they denied that they limited continence aids at two a day – but one staff member told me that was all they were given and they had to manage. After my mother died I was so exhausted and so angry – in the end I threatened to sue them and they laughed at me and said – people have tried before and haven’t succeeded. Can you believe that???? I walked away. It was such a negative situation – I was lucky I had an understanding husband and children. The whole thing traumatised me dreadfully – so give them MORE money – right! What a joke!!!!

    1. The facility my family resides at gets over $300k a year for their so-called care for 3 people in 3 tiny rooms, 3 pathetic mostly uneatable meals a day, they sit looking at walls waiting to die, bored to point of insanity. Prison would have been far better for them. If someone paid me $300k a year to look after them, they would live a life I can only dream off. They would have full-time care, not the spasmodic moments by underpaid, under-appreciated dedicated care staff doing their best in a nightmare situation. More money won’t fix this problem. It’s systemic, it’s greed, it’s a nightmare for those in care and the loved ones that put them there with no other options. From what I see and KNOW it’s multi-millionaires wanting more for themselves, not for the residents in most cases, maybe not in all cases, but the many I have investigated over the years.

    2. Hi Natalia, I’m so sorry that you had such a terrible experience. IT sounds as if the place your mother was living in was not using money wisely or taking sufficient care of their residents. However, many of the residential aged care facilities which are making a loss are NOT privately owned and are Not For Profits (charities) struggling to provide excellent care. Some privately owned companies are also in this situation and doing their best. Government subsidies have not kept pace with inflation and wage rises and the situation is getting worse and worse. We need to care for our elderly and vulnerable and that takes money to fund the care. More money means more care in the vast majority of aged care organisations.

  2. Nursing homes are a disgrace they treat the elderly like children with no respect. They are nothing but a place to die without dignity. These places should be were people can enjoy their final years not like were they don’t get proper food , limited pads, left in a chair all day, day in day out these places are nothing but a daycare for the age and these places need to be upgraded to suit living conditions that our elderly deserve to live . Even the staff training needs to be looked at and the trainers that are conducting these courses are also unexceptionable

  3. Great feedback ladies! You are all right in your statements. Greed is a big part of it as you see, the less staff you have to train the new staff coming in like a revolving door, the more money you save just there. The government past and present have not carried out checks to see where the taxpayer’s money is being spent. Staff to resident ratios cost money and I predicted at the beginning of this Royal Commission that nothing will change. We don’t have a full facility anymore. And they are cutting staff hours even though the staff are still run off their feet. They keep writing than you letters every day to thank the staff for their hard work and working under pressure!! Says alot hey? When the resident no’s go down so do the staff no’s so we never get a reprieve and are not able to spend more time with the residents and give them better emotional care. AINs are already filling in for cleaning staff by doing jobs the cleaners should do and laundry and kitchen!! Can’t win!! All I will say is GOOD LUCK With getting anything near to great care for our elderly. The carers and the dear elderly are the ones not being valued in this greedy world we live in! As much as I respect Nurses for the hard study they do to get ahead they still don’t get the wages they deserve but if I had 4 or 7 people to care for on a regular basis like most public hospital nurses do I would have to think if it is good enough for them to get a pay rise then why not all aged care staff! They work so damb hard for their $23/$24 per hr!! Ains in public hospitals get 29 per hr!! Very hard to get a job their as nobody leaves! Can you blame them? Not everyone can afford the money or the time to study.

    1. By the way we AINs only get 50cents pay rise every three years!! So please don’t whinge public hospital nurses as your flat out and exhausted sisters in aged care can only dream of a two and a half % wage rise every year!

  4. Who cares about the quality of aged care?!
    From a community perspective; no one much – until that is, they have to commit a loved one to a home, or are seeking home assistance to manage care. Then the penny drops …
    From a government perspective; “there no money tree” for such care, just like funding the ABC; you’ll have to find savings and manage.
    Contrast that with boys-toys for the military. Submarines and combat fighter jets with eye-watering price tags, mostly obsolete before they’re delivered. Or the upgrade of a war memorial to satisfy the ego of it’s director and former defence minister. We can’t afford to care for the living, but a cool half a billion can be found to care for the dead.
    We live in a morally bereft society


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