Regional aged care headed for financial disaster under Labor

The government’s changes to aged-care funding under the Living Longer, Living Better program, which came into effect on 1 July this year, represent a knife to the heart of small local regional aged-care service providers.

When the Labor Party spruiked their plan as the panacea for our aged-care system, they failed to tell the Australian people that this program is in fact an attempt to claw back $750 million from the aged-care sector over the next 2½ years.

The real result, as opposed to the misrepresentations of the government, is that residential aged-care providers receive less funding for new patients than they received for patients last year.

A very frail, elderly Australian entering aged care in the current year now brings with them federal funding of around $56 to $63 a day less than a resident admitted last financial year.

Given the average turnover rate in aged-care facilities of around 50 per cent per annum, by the end of the current financial year, half of the residents will be funded by the government at this new lower rate.

At the end of the next financial year, nearly all the residents will be on the lower rate of funding.

For a 40-bed unit, this would represent a loss of funding of close to half a million dollars by the year 2014-15.

I cannot understand why the government does not understand the impact that this is having on small aged-care facilities, particularly those in my electorate.

I think the government must be asleep. Many aged-care providers in regional Australia are already losing money.

That is why they cannot afford to add additional beds. They are already losing on each and every bed, and extra beds create even greater losses.

That is why, of the 5,278 new residential aged-care places allocated to Western Australia since 2007, only 1,910, or 36 per cent, have been taken up. Now they will attract even less. There will be fewer aged-care facilities in my community.

This government is making it even harder for our elderly by cutting support for the most needy and the most frail. There are examples starting to flood in from all around the nation.

Funding for residential aged care is managed under the Aged Care Funding Instrument, in which levels of acuity—nil, low, medium and high—are assessed over a range of biological and behavioural factors to determine the funding received.

The factors are categorised as activities of daily living, behaviour, and complex health care, and there are 12 in total.

The levels are frequently reviewed in individual patients. In one case recently from my electorate, despite the patient’s level of acuity rising from low to medium in the behavioural section due to deteriorating behaviour, the payment actually dropped by $18 a day.

It is really astounding that, as the need increased, the funding reduced.

Given the impending increase in aged-care needs bearing down on Australia in the form of an ageing population, this assault on the viability of residential aged-care providers is really not acceptable.

A $56-a-day loss equates to $392 a week, or $20,440 a year per resident.

The onset of this issue will be insidious but cumulative, as gradually more and more residents are turned over and lower payments become far more common.

Crunch time will probably be around the end of the current financial year when the new budgets are prepared.

If we are judged on how well we treat our most vulnerable, in the case of Labor and its new funding model it is definitely a fail. I hope that there are no closures of aged-care facilities anywhere in Australia as a result of this measure.

We know that we have increasing requirements in aged care.

I receive phone calls in my office because of the beds that have not been taken up in Western Australia—because of the shortage of beds—from people who cannot get their loved ones into the facility that they want or need and from those who are seeking care right throughout the south-west.

For those from my electorate who may be watching tonight: I am going to continue to stand up for you on this issue.

I know how important aged care is, and I know how important those small local aged-care facilities are in my electorate of Forrest. That is why this issue is a major one throughout Australia.