The Albanese government has not increased funding to cover the rising costs of aged care services, including a wage increase that will come in this Friday.
Aged care providers had been led to believe a Labor government would fund higher wages because a key plank of Labor’s election campaign was they would “back a real pay rise for aged care workers” if elected.
But the federal health department has confirmed that the subsidies aged care providers will receive in 2022–23 will increase only 1.7 per cent, meaning a cut in real terms – inflation is sitting at 5.1 per cent and is expected to reach 7 per cent by the end of the year.
It has been well established that the aged care sector is in the midst of a financial and workforce crisis following the royal commission. The systemic problems have only been exacerbated by the pandemic.
Data from aged care accountancy specialists, StewartBrown, revealed that 64 per cent of aged care homes are operating at a loss. On average, Australian residential aged care homes are losing $12.64 per bed per day.
The indexation announcement has sparked a furious response from the sector.
The chief executive of MyHomecare Group, Stuart Miller, told The Guardian the low subsidy increase will mean many older Australians “can’t afford to continue living at home”.
“It is estimated the cost of care has gone up 20%, so while this 1.7% subsidy increase will assist Home Care Package recipients, it will mean many can’t afford to continue living at home.”
The interim chief executive of the national peak body for aged care providers, Aged and Community Care Providers Association, said the announcement is “dire news” for the sector and “perplexing” given Labor’s promises during the election campaign.
Mr Sadler said, “Aged care providers are seeking an urgent explanation from the federal government following today’s extremely disappointing announcement that subsidies paid by government to providers to care for and support older Australians will increase by only 1.7 per cent during 2022-23.
While the indexation figure was part of the previous government’s budget, Mr Sadler said ACCPA would like to hear the Albanese government’s plan to fix the issue – in line with their promises.
“The gap between indexation and cost increases is enormous – with inflation at 5.1 per cent, award wages for most employee classifications increasing by 4.6 per cent, plus a 0.5 increase in the superannuation guarantee.
“This year’s gap adds to the gap from previous years, and is further compounded by Award changes due to take effect in home care from 1 July and the ongoing costs of COVID-19.
“The inadequacy of aged care indexation is further illustrated by the fact that NDIS subsidies have been increased by nine per cent with a further supplement to provider funding for COVID-19 costs.
“We are deeply concerned that the aged care crisis will continue to worsen without urgent action to adequately cover the costs of care and well-deserved pay increases for hard-working staff.”