Federal Budget delivers $1.6 billion for 23,000 new Home Care Packages – but residential care providers to hang on for next seven months until May 2021 Budget. Is this a sign of the Government’s lack of respect for operators?

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Treasurer Josh Frydenberg has delivered the Morrison Government’s 2020-21 Budget – five months after it was delayed because of COVID – but the Morrison Government appears to be waiting for the Royal Commission’s Final Report – and the May 2021 Budget – to provide the funding relief that the sector urgently needs. So, why the snub?

No immediate relief

Despite the raft of measures, there is little immediate relief for the residential care sector in terms of day-to-day funding.

Labelling aged care “one of the greatest challenges we face in delivering essential services to Australians”, the Treasurer pointed out that the Government has already outlaid $1.6 billion since February to support the sector during the pandemic to justify the measures.

However, there was hope for the future with Mr Frydenberg adding that more funding will be forthcoming once the Royal Commission delivers its Final Report in February 2021.

“The government will provide a comprehensive response to the final recommendations following receipt of that report,” he said. “This will involve significant additional investment.”

What was handed out

In summary, the Budget’s aged care measures include:

  • $1.6 billion over four years from 2020-21 for the immediate release of another 23,000 home care packages across all package levels (which will be rolled out from November 2020 and increase the number of packages in the system from 155,625 at 30 June 2020 to an estimated 185,597 at 30 June 2021)
  • $125.3 million over three years from 2020-21 to replace the Commonwealth Continuity of Support Programme with a new Disability Support for Older Australians program to ensure that older Australians with disability who were not eligible for the National Disability Insurance Scheme continue to receive the supports they need
  • $91.6 million over two years from 2020-21 to continue the reform to residential aged care funding including undertaking ‘shadow assessments’ using the Australian National Aged Care Classification
  • $35.6 million over two years from 2020-21 to provide additional funding for the Business Improvement Fund (BIF) to continue assisting eligible aged care providers to improve their financial operations
  • $29.8 million over three years from 2021-22 to administer the new Serious Incident Response Scheme (a recommendation that the Government already committed to last week in its response to the Royal Commission’s special COVID report that will see around 70 staff inspect services and provide safeguards for people in aged care with providers held to account for managing and reporting incidents)
  • $26.9 million in 2020-21 to support the operation of the My Aged Care system
  • $26 million in 2020-21 to maintain the capacity of the Aged Care Quality and Safety Commission in its ongoing regulation and compliance of the aged care sector
  • $21 million over four years from 2020-21 to delay the implementation of payment in arrears and on invoice for home care services as well as provide transition support to providers to adjust to these arrangements
  • $11.4 million in 2020-21 to defer the introduction of a cost recovery levy for unannounced site visits
  • $11.3 million in 2020-21 to provide additional dementia services and training programs
  • $10.6 million over three years from 2020-21 to establish a network of care coordinators to assist younger people in residential aged care or who are at risk of entering residential aged care to look for more age-appropriate accommodation and supports (which the Government also announced last week)
  • $10.3 million over three years from 2020-21 to support the Aged Care Workforce Industry Council to implement the Aged Care Workforce Strategy
  • $4.6 million over two years from 2020-21 to review the support care needs of senior Australians who live in their own home and determine how best to deliver this care in the home
  • $4.1 million in 2020-21 to support the Department of Health and the Aged Care Quality and Safety Commission to respond to requests from the Royal Commission into Aged Care Quality and Safety.
  • $6.9 million in 2020-21 to extend the reporting date of the Royal Commission into Aged Care Quality and Safety from 12 November 2020 to 26 February 2021, following the suspension of hearings, workshops and group consultations because of the COVID-19 pandemic.

A deeper problem

The failure of the Government to commit more funding to residential care – despite having ample evidence of the financial pressure facing the sector – hides a deeper problem however.

Is the Budget a snub of the sector? It seems clear that the aged care providers still lack the voice and respect of the Government, which means it has not earnt it in their eyes.

The Royal Commission repeatedly asked for positive, innovative proposals. Is it time for the sector to deliver?


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