Aged care providers across Australia have cancelled plans for over 2,000 new beds, and counting, as a direct result of the Federal Government’s decision to implement a real terms cut in residential care funding earlier this week.

With almost two thirds of aged care homes already losing money, the announcement of a below inflation increase in the Australian National Aged Care Classification (AN-ACC) price on Wednesday has all but guaranteed even more homes will move into the red.

From 1 October, the AN-ACC price will be $303.19 per resident, an increase of just 2.55% from the current price of $295.64. This compares to pay rises of 4.75% for aged care staff and inflation of 3.5%.

The hotelling supplement, which helps to fund things like food, laundry and cleaning, will remain frozen at $22.15 pending a review, despite cost increases for those things far outpacing CPI over the past 12 months.

“Last year we were not even able to complete 1,000 of the 10,000 beds we need to build every year just to keep up with demand,” said Ageing Australia CEO Tom Symondson.

“Far from encouraging new beds, this decision is likely to see national bed numbers decline, not to mention it will put at risk the significant improvements in care and resident satisfaction we have seen over the past five years.”

Dozens of aged care providers have contacted Ageing Australia over the last 48 hours to sound the alarm on the decision, with plans for more than 2,000 new beds already shelved or at risk, including new developments that were due to commence shortly. Just a few of the examples provided so far include:

• NSW provider, Whiddon, will not be able to go ahead with a planned 100- to 160-bed Residential Aged Care Home because the changes make the build unviable.
• Nationwide operator Regis will shelve its 99-bed development at Belrose, close to Sydney’s Northern Beaches Hospital.
• Abound in Victoria had planned an 80-bed home in Berwick, but the financial position now does not support proceeding despite strong demand.

“These examples are just the tip of the iceberg of the many stories we’ve already heard, but they clearly highlight the very real consequences of a decision like this,” said Mr Symondson.

“At a time when national and international circumstances are hiking prices for everything, everywhere, the only way to ensure older people are not left languishing in hospital beds or suffering at home while they wait for a space, is to fund care properly.”

“The Royal Commission described inadequate government funding as ‘a major contributor’ to the problems it saw in aged care. Why would we risk the enormous gains we have made in quality of care for older people in the past five years, let alone building enough beds to meet demand, by ignoring that lesson?”

ENDS

Ageing Australia Media contact: Peter O’Dempsey 0499 106 957 or