Budget helps change ‘doom and gloom’ aged care narrative

12 May 2023

VMCH CEO Sonya Smart is “cautiously optimistic” for the future sustainability of the aged care sector following Tuesday’s Federal Budget.

Ms Smart, who heads up Catholic for-purpose aged and disability organisation VMCH, believes budget allocations were largely positive, following years of underfunding that have left many aged care providers struggling to keep their heads above water.

Finally, the government has some kind of finger on the pulse as to what is actually happening across the sector and is giving us more targeted support to do what we do best; deliver high quality care and support to our deserving older Australians,” Ms Smart says.

“Most importantly, they’re investing in our valuable workforce with a 15 per cent pay rise on Award rates. This is a reflection of their hard work, dedication and compassion, shown particularly over the past few years as we’ve battled COVID. We look forward to passing on this well-deserved wage boost to our staff and are hopeful it will attract more workers to our sector.”

Ms Smart says a reduction in funding of aged-care places from 78 per 1000 (expected to decrease payments by $2.2bn over three years from 2024-25) highlighted the shift for more people wanting to age in place at home.

“We need a clear pathway to reinvestment to make in-home care a real option, not just a stop gap while waiting for residential aged care. People should be able to age well at home, not ‘make do’.”

Across Australia, residential aged care occupancy sits around a record low of 86.2%, while the number of people receiving Commonwealth-funded home care packages nearly quadrupled from 2012 to 2022, from 55,000 to 216,000.

The government will fund an additional 9,500 Home Care Packages (HCPs), costing $166.8 million.

“This reflects what we are seeing on the ground, in terms of demand for people to age in place at home,” Ms Smart says.

Interest in our HCPs is growing, with enquiries increasing by 600 from 2021 to 2022. We’re also investing in the build environments of our affordable homes and retirement living developments so that they are accessible and geared towards supporting people to age comfortably at home.”

However, Ms Smart says the funding cut for residential aged care wasn’t without its concerns.

“We’ve had a mass exodus of providers and people are struggling to fill beds. We still need to ensure we can care for those in particular who require specialised dementia and palliative care support; this is where the future of residential aged care is heading. It is not realistic to believe that people will age as well at home with complex health conditions, social isolation and a workforce under pressure.”

Woman in blue jacket smiling at camera — VMCH CEO Sonya Smart

Ms Smart believes the key to keeping residential aged care financially sustainable may lie in the user pays system, as well as some minor changes that would allow providers to charge appropriately for maintaining the fabric of the facilities older people call home.

As part of its establishment of a new Aged Care Taskforce, the government will consider increased consumer contributions to the cost of aged care.

Ms Smart echoes Catholic Health Australia’s calls for the government to uncap daily fees for wealthier residents, which currently don’t take into account a resident’s wealth or retirement status and are unlinked from the actual cost of providing a service.

With 70 per cent of all aged care homes running at a loss, something needs to be done,” Ms Smart said. “It makes sense for those with more financial means to pay more.”

Investments in enhancing the Star Ratings system for better data quality and analysis ($126.7m) and helping to improve the dining experiences of residents ($12.9m) are also welcome.

It’s been ‘doom and gloom’ across aged care for a long time,” Ms Smart said. “We are cautiously optimistic these announcements will translate into sustainable sector reforms. Finally, our older generation is receiving a very important message that their care is worth investing in, and our staff are valued enough to deliver it.”

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We here at VMCH respectfully acknowledge the traditional owners of the lands on which we gather, and we would like to take a moment to honour the fact that we live on the lands of the oldest civilisation in the world. We acknowledge the stories, traditions and wisdom of Aboriginal and Torres Strait Islander peoples, and pay our respects to their elders past, present and emerging.