Federal Budget fails to deliver on home care packages and aged care places – what next for the viability of the sector?

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Despite the media headlines that this year’s Budget would deliver big on aged care spending, analysis of the major announcements is proving otherwise according to aged care provider advisers Ansell Strategic.

14,000 new home care packages were announced, but with 104,000 consumers already on the national queue, these are unlikely to go far. Around 48,000 are sitting on lower level packages while they wait for a higher one to become available, while the remaining 56,000 have no funding at all. Nearly one-third of consumers have been left waiting over 12 months.

Cameron Ansell also points out that these 14,000 packages are not a new initiative, but are simply the places that should have been allocated in last year’s undelivered Aged Care Approvals Round (ACAR).

Treasurer Scott Morrison announced the 2018-19 ACAR will be 13,500 places, but this still puts us far behind the estimated 83,500 beds needed to be built in the next decade.

In other words, the Government didn’t release any new bed licenses. That money had been diverted to home care.

Ansell Strategic says its analysis of the $2 billion cuts to aged care funding in 2016 showed the measures were too severe, resulting in an extra $590 million in cuts above what was forecast and undermining the viability of the sector as a whole.

Today we are seeing the results. As we covered here, StewartBrown’s latest data shows 41% of providers are making a loss. Regional and rural facilities are the worst hit.

Unsurprisingly last year’s recommendation to the Government that the means-testing for aged care be changed to increase costs for consumers was not addressed in the Budget.

“In the absence of genuine sector reforms, the availability of suitable aged care services will continue to be highly constrained,” Ansell writes.

We would agree.

Read his full report here.