Aged care: federal budget promises $17.7bn to overhaul Australia’s scandal-plagued system

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A $17.7bn package to reform the scandal-plagued aged care system aims to clear the home care waiting list within two years, mandate minimum care time in residential aged care homes, and boost the aged care workforce.

Accepting all but six of the 148 recommendations of the royal commission into aged care quality and safety either in full or in principle, the health minister, Greg Hunt, said the “once in a generation” overhaul of the sector had been approached from a needs-based perspective to address the inadequacies uncovered by the inquiry.

Under the five-year plan, an extra $7.5bn will be spent on home care, including $6.5bn to clear the waiting list of an estimated 80,000 people over the next two years, and about $800m to support 1.6 million informal carers, including respite services for 8,400 Australians.

The royal commission’s final report found that the cap on the number of care packages meant people were waiting about seven months for the lowest levels of need and about 34 months for those with the highest levels of need, leaving many older Australians to die while waiting.

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Hunt said the extra funding would ensure the waiting list was cleared, and that people would be given the correct home care package according to their level of need.

The extra 80,000 places means that a total of 275,600 packages will be available by June 2023.

An additional $7.8bn will be spent on improving services and on ensuring the sustainability of the residential aged care sector, with the package to mandate minimum levels of care provided to residents and to include more funding for better services, including new quality standards for dementia, diversity, food and nutrition.

Providers will receive an immediate increase of $10 per resident per day from July this year before a new funding model comes into effect in 2022.

Under the new system, which will see annual increases and price settings recommended by a new independent Hospital and Aged Care Pricing Authority, average care minutes for each resident will increase to 200 minutes a day, including 40 minutes of time with a registered nurse. A registered nurse will also be required on site for a minimum of 16 hours a day.

By 2024, the government will have care packages assigned to consumers, not providers, and bed licences will be abolished to create more competition in the sector.

To improve the quality and safety of residential aged care, the government will also allocate $200m for a new star rating system and $264m to strengthen clinical care standards. This will also allow the independent regulator to conduct an extra 1,500 site audits of homes and to quickly investigate complaints where required. More funding will also be allocated for dementia care and management, including $67m to reduce the reliance on physical and chemical restraints.

A key part of the package is also a $652m workforce strategy that will include upskilling of the existing workforce, and training for 33,800 new aged care workers through subsidised vocational education places.

From 2022, the government will fund financial incentive payments worth $135.6m, giving bonus payments to registered nurses who stay with one employer for 12 months, who work in rural areas or who take on additional training or qualifications.

The home care workforce will also expand by 18,000 new workers, funded by an extra $91.8m.

However, the government has said it will give “further consideration” to a recommendation for mandatory minimum qualifications for personal care workers.

The government has also accepted a recommendation for a positive duty to be imposed on approved providers, which commissioner Lynelle Briggs had recommended to ensure that the nursing and personal care provided was “safe and of high quality”.

But the government has not adopted a recommendation that would impose civil penalties for a breach of the duty and compensation payments in the event of a breach, saying this will be considered as it prepares the new Aged Care Act.

Rejecting calls from the royal commission for a levy to fund the sector and changes to user fee arrangements, including means testing, Hunt said the package would be funded through economic growth within the budget.

By the end of the forward estimates, government expenditure on aged care will match that of the spending on Medicare, growing to a total of $33bn.

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The aged care sector welcomed Tuesday night’s package, saying it would provide “real hope” following 20 government reviews over the past 20 years.

“Eighty thousand new home care packages, relief for aged care homes under financial pressure, and workforce support including more care minutes per day and greater training and career development are significant steps forward,” said Sean Rooney, from the Australian Aged Care Collaboration.

“It also deals with major reform including a new aged care inspector general, the creation of a new independent pricing mechanism and revised quality standards through an expanded Australian commission on safety, quality and health care.”

Rooney said the sector was on the pathway “to a transformed aged care system that is resourced and enabled to meet the needs of a growing number of older Australians”.

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