Jul 23, 2020

Lack of funding forces staff cuts in time of crisis

A Victorian aged care provider says it is cutting back on staff due to financial pressures, despite the fact the sector is facing its most serious health challenge in more than a century.

Not-for-profit provider Royal Freemasons Aged Care Facilities has been forced to cut back staff hours to ensure the organisation’s ongoing financial sustainability, says CEO, Kerri Rivett.

Ms Rivett told HelloCare the organisation will boost staff numbers and hours in some areas, but wind them back in others. Overall, staff costs will be lower, she said. 

The Australian Nursing and Midwifery Federations has called staff cuts “unfathomable” in the current crisis.

Can’t maintain ongoing losses

“We’ve had consecutive years of losses and we can’t continue to wear those losses. We can’t see any light in the tunnel for extra funding,” she said.

The latest data from both the government’s Aged Care Funding Authority (ACFA) and Stewart Brown show that over 74 per cent of rural and remote aged care providers are making an operational loss, even prior to the COVID-19 crisis.

“This sector is facing significant challenges financially and clinically at this time, and it is escalating due to this pandemic,” Ms Rivett said in a statement.

“Additional funding thuis far has been to assist providers with personal protective equipment, and not to meet the increasing acuity needs of the residents in our care.”

The government has said it won’t release additional ongoing funding to the sector until after the royal commission releases its final recommendations, a deadline that has been pushed back to March next year.

Funding per bed in decline

Recent government aged care funding is “new money”, Ms Rivett told HelloCare. 

“That money is for more beds and more facilities across Australia to meet the number of ageing  people, however the money to actually operate a bed has been decreasing,” she said.

Government aged care subsidies are adjusted in line with the Commonwealth Own Purpose Outlays index, otherwise known as ‘COPO’. While the COPO has risen between zero and 1.2 per cent in the last three years, salaries have gone up 3 per cent and electricity has risen as much as 10 per cent in some incidences, Ms Rivett said. Other costs are also rising more rapidly than the COPO, she said.

“The costs of care and services are not being fully recovered by the income that we’re receiving,” Ms Rivett explained. Due to the “highly regulated” nature of the aged care market, she said they are not able to increase their prices, like any other business would.

Cuts bring staffing levels down to industry average

Until now, Royal Freemasons has had higher numbers than average of staff on the floor, However, the cuts will bring them into line with the industry average.

The change has been difficult for staff, residents and families to accept, Ms Rivett said. “It’s causing some distress,” she noted.

The changes were planned prior to COVID-19 becoming the serious issue it is now, however the board has made the decision to proceed. 

Ms Rivett said if one of Royal Freemason’s facilities recorded a case of COVID-19, the resources would be put in place to “meet the needs of the residents and ensure everyone’s safety”.

But she added the cost of resources needed to manage a COVID-19 outbreak are extremely high. “That’s really expensive,” she observed.

Nursing union: Staff cuts during pandemic “unconscionable”

Australian Nursing and Midwifery Federation Federal Secretary, Annie Butler, told HelloCare that its members were “appalled” that some providers are cutting back on care hours during the pandemic.

“It’s simply unfathomable that aged care providers are taking this action, which as we understand, is effectively a financial response. It’s unconscionable,” Ms Butler said.

The secretary of the Australian Nursing and Midwifery Federation (Victoria Branch), Lisa Fitzpatrick, told HelloCare, it’s “outrageous” that staff cuts have been implemented during the pandemic.

“The modus operandi of lean staffing and low wages has put this sector, the staff and the residents in a very fragile position,” she said.

The ANMF’s recent National COVID-19 Aged Care Survey found that 64 per cent of workers reported staff cuts since the beginning of March. 

“We have ongoing concerns that many vulnerable, elderly residents will suffer even more, as they face longer waits for basic, everyday care from a depleted workforce,” Ms Butler said.

“Aged care providers have been given an almost additional $1 billion dollars in funding by the Federal Government, much of this is to assist with employing additional staffing needed for the pandemic.”

“Providers then must justify why they continue to cut nurse numbers and care hours,” she said.

Older Australians blocked from care they deserve

Ms Rivett said she would like to see more funding from the government that would allow Royal Freemasons to deliver the care and services desired by families and residents. “Not just the basics,” she said. “I’d like to be able to deliver the care and services that meet the psychosocial needs of our residents.”

Ms Rivett said older people in hospital receive far higher rates of funding that those living in residential aged care. “It’s a huge discrepancy, yet the family expects the same level of services,” she said.

“I’m a strong advocate for the elderly,” Ms Rivett said. “I’ve been working in this industry for just under 40 years. These people are the bricks and mortar of Australia. I do this because I think the elderly don’t get what they deserve.”


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  1. If Covid-19 enters the facility, by the time they put on extra staff, it will already have spread and this facility will have blood on their hands

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