Indexation woefully inadequate and unsustainable: services will suffer

Release date: 25 Jun 2019

Peak body Aged & Community Services Australia (ACSA) says the indexation increase for home and residential aged care funding announced today will be inadequate and services for older Australians will suffer as a result.

“The situation facing aged care is very serious. The response from government is still woefully inadequate and services will suffer,” Patricia Sparrow, CEO of ACSA said.

“These increases simply aren’t enough. In aged care we have more providers operating at a loss than ever before, more complex health and care needs than ever before, unprecedented demand and rising costs.

“As a nation we need a better plan for our own ageing and for the ageing population so that everyone is treated with respect. Providers need to own up to failures when they occur, and improvements need to be made, but ultimately it is the responsibility of everyone to ensure we have a sustainable system that provides people with a high quality of care, dignity and respect.

“The minor gain of a 1.4% indexation increase in residential aged care is hardly a compensation for the fact that the 9.5% temporary funding increase is about to cease. This level of indexation increase for home care packages further erodes their value to clients and families.

“The Commonwealth Home Support Program (CHSP), the largest of the support programs, is the building block for keeping older people well and independent. But it is struggling with demand whilst also being expected to maintain services with annual indexation increases of just over a per cent. Providers are being squeezed at both ends.

“Wages in the award system have been boosted by a 3% annual increase which clearly displays the inadequacy of the 1.4% indexation to support our staff in aged care.

“These rates will widen the gap between the funding and services available and the costs needed to provide appropriate care for our ageing population.

“Currently, 45% of aged care facilities are operating at a loss and this figure rises to 67% for outer regional, rural and remote services.

“As we live longer, our healthcare needs are more complex. It’s clear that the costs are increasing faster than the amount of funding the sector has been allocated.

“The government has provided stop gap measures such as the short-term funding increase, but these temporary measures are about to cease. Providers will struggle but ultimately it is our clients and residents who will feel the pinch.

“Our ageing population can’t wait any longer. The Royal Commission can’t be used as an excuse to delay urgent actions that can be taken now,” said Ms Sparrow.


Media contact: Aliya Ahmad 0428 684 307

As the peak body representing church, charitable and community-based organisations providing accommodation and care services to older people, people with a disability and their carers, ACSA can be contacted for comment on issues affecting the industry.

Areas ACSA may provide media commentary on include:  

  • Aged care reforms
  • Residential aged care
  • Home care
  • Independent and retirement living
  • Housing for older Australians
  • Palliative care
  • The aged care workforce in Australia


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