Aged Care was a key focus of the 2020-2021 Federal Budget, coinciding with the Federal Government releasing its official response to the Royal Commission into Aged Care Quality & Safety. As part of its response, the Government announced that it will implement five key pillars to provide ‘once in a generation' reform to the delivery of aged care services in Australia over the next five years.

1.3 million Australians access aged care services today and, by the middle of the century, the number of Australians aged over 65 years will almost double to more than seven million. Therefore, the importance of these reforms cannot be overstated.

In this blog, we summarise:

  • What the 2020-21 Federal Budget means for the Aged Care sector
  • The five key pillars of reform, and
  • The Government’s official response to the Royal Commission into Aged Care Quality & Safety.

What the 2020-21 Federal Budget means for the Aged Care sector

The Government has committed to an investment of $17.7 billion in Aged Care over the next five years. This is the largest investment in aged care, and the largest investment in response to a Royal Commission in Australia’s history, indicating how seriously the Government is taking the current issues in Australia’s Aged Care sector.

The five key pillars of reform

1. Home Care

$7.5 billion has been committed to supporting older Australians who choose to remain living in their home. This funding will provide an additional 80,000 Home Care Packages, additional support for informal carers and respite services and more face-to-face support to access and navigate the aged care system.

2. Residential Aged Care and sustainability

$7.8 billion towards improving and simplifying residential aged care services to improve access for older Australians. This funding will ensure better care, services and food, more care time allocated to each resident per day and other measures to deliver services reform and funding sustainability.

3. Residential Aged Care quality and safety

$942 million committed to helping improve access to health and aged care for older Australians and implement a star rating system and other improvements in quality and safety.

4. Workforce

$652 million funding allocated to growing a skilled, professional and compassionate aged care workforce. Initiatives will involve the creation of a dedicated assessment workforce for all older Australians, financial support for nurses, a national recruitment campaign, additional training and upskilling for workers.

5. Governance

$698.3 million to improve governance across the aged care system. This funding will establish the new governance and advisory structures (National Aged Care Advisory Council, Council of Elders and are working towards establishing a new Inspector-General of Aged Care), improving access for people in regional, rural and remote areas including Indigenous Australians and the drafting of a new Aged Care Act to cover the Government’s reforms by mid-2023.


The Government’s official response to the Royal Commission into Aged Care Quality & Safety

The Royal Commission’s final report was released in March 2021 and contained 148 recommendations to overhaul Australia’s aged care system.

The Government:

  • accepted 107 of the recommendations
  • accepted ‘in principle’ 19 of the recommendations
  • rejected 7 recommendations
  • chosen to support a competing recommendation in 4 instances (where the commissioners had differing recommendations)
  • noted 1 recommendation, and
  • will subject 10 recommendations to further consideration.

Although there were some significant recommendations that were not accepted, on the whole, it is positive that a significant number of recommendations have either been accepted, or accepted in principle.

Some of the key recommendations overlooked are:

Governance. The Government rejected the recommendation to establish an Independent Aged Care Commission to oversee aged care, taking this responsibility away from the Department of Health. Instead, the Government has adopted some other measures to strengthen governance, by establishing a National Aged Care Advisory Council, a Council of Elders, and an office of the Inspector-General of Aged Care. Will this be enough to make the radical changes recommended by the Commission? Time will tell.

Aged Care Levy. The Royal Commission recommended that a levy be established to help fund additional aged care services. The Federal Government decided against this idea, at least for now. Although the Federal Budget has allowed for a significant investment in aged care, it is likely that this investment amount will continue to grow in line with Australia’s aging population. The levy idea may well need to be looked at again in the future.

Dental scheme. The Royal Commission recommended that a Senior Dental Benefits Scheme be established – but the Government deferred their decision on this to 2023. Although disappointing, this scheme would have added significant costs annually to the aged care budget, so it is not surprising.

The full Australian Government response to the final report of the Royal Commission into Aged Care Quality and Safety can be found here

In summary

On the whole, the Australian Government’s adoption of many of the Royal Commission’s recommendations, and its significant investment in aged care in the Budget, gives the sector real hope. Though this is only the beginning of the transformation needed in Australia’s aged care system, and time, and future aged care budgets, will be the real measure of whether the Government can deliver its ‘once in a generation’ reform that it has promised.

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