2018-19 Budget Analysis

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11 May 2018

Index

 

2018-19 Budget Analysis

Key Points:

  • The government will be increasing the number of home care places by 14,000 over four years at a cost of 1.6 billion

  • 2021-22 – over 74,000 high level home care places will be available, an increase of 86% on 2017-18

  • 146 million to improve access to aged care services in rural, regional and remote Australia

  • $83 million for increased support for mental health services in residential aged care facilities, especially to combat depression and loneliness

  • Prevention of elder abuse with new support services and a national online register for enduring powers of attorney

  • Pension Loans Scheme and Pension Work bonus changes to back older Australians who choose to stay in work

  • Consolidating residential and home care within the aged care special appropriation, this has allowed the government to use an underspend in residential care (related to timing and number of provisionally allocated beds) for home care places. As the program is demand driven beds will continue to be funded as and when they are operational

  • There will be an Aged Care Approvals Round in 2018-19FY, with 13,550 residential places, 775 short-term restorative care places and $60 million capital investment to support new places.

  • $40 million over five years for RRR providers for building improvements, maintenance and infrastructure

  • $300,000 has been allocated for an impact analysis study to allocate residential care places to consumers

  • $50 million for residential care providers to transition to the new Standards

  • The formation of the Quality and Safety Commission (previously announced) from 1 January 2019

  • Unannounced Visits Levy postponed till 1 July 2020

  • Prudential Risks – introduction of a compulsory and retrospective levy for the sector when default events exceed $3 million in any one year

  • My Aged Care – $61.7 million to improve functionality; $7.4 million for System Navigator Pilots

  • $14.8 million to implement a new assessment framework, including an assessment workforce from 2020

  •  $32.8 million over four years for new models of palliative care in residential facilities

  • $82.5 million over four years for mental health service for residential care and

  • $5.3 million for technology solutions to support people living with dementia

 

Projected number of residential and home care places in the 2017-18 and 2018-19 budgets

Residential care places

 

2017-18

2018-19

2019-20

2020-21

2021-22

17-18 budget

209,700

216,900

224,600

232,300

18-19 budget

204,700

210,000

217,000

225,000

234,000

Difference

-5,000

-6,900

-7,600

-7,300

 

Home care packages

 

2017-18

2018-19

2019-20

2020-21

2021-22

17-18 budget

100,436

112,733

124,443

134,545

 

18-19 budget

87,590

111,500

134,500

144,500

151,500

Difference

-12,846

-1,233

10,057

9,955

 

 

Funding for aged care services

On the headline numbers, the Government’s commitment of $5 billion funding to the sector over five years includes the retention of $2 billion (from under-expenditure on residential aged care as a result of slower and less provisionally allocated places becoming operational) which has been retained for funding purposes where it would ordinarily have been taken back to consolidated revenue to support the budget bottom line. This is a significant action. The home and residential care funding lines within the overall aged care special appropriation have been combined which provides greater flexibility and its potentially useful for other reforms.

The centrepiece for the sector was $1.6 billion committed to support 14,000 High Level (Level 3 &4) Home Care packages which will start to be introduced in the next few weeks. Obviously with so many still waiting for care, any additional packages are very welcome but this number leaves a large number of people still unsupported.

We have heard the concern that residential care has been “cut” so have today confirmed with the Department that the lower residential care place numbers in the budget do relate to the re estimation on provisionally allocated places. It is important to remember that aged care is a demand driven program and when the beds become operational the funding flows. In additional ACSA has been advised that the ratio of 125 places (78 RC/2 Restorative care/45 HC) will be met with the changes that have occurred in this budget.

While there were a range of useful measures in the budget and the Government has reaffirmed its fiscal commitment and reform intentions provider sustainability is left largely unaddressed.  We still need that broader community conversation about, and action on, the planning, financing and provision of aged care to meet the needs of this growing demographic. This message will continue to form the basis of our ongoing engagement with Government.

Overall, the 2018-19 Budget provided fresh evidence that the Government is still very much on the reform path laid out in the Roadmap for Reform which enjoys broad bipartisan support. 

 

Aged Care Approvals Round (ACAR)

In 2018-19 an ACAR providing $60.0 million capital, funding 13,550 residential aged care places and 775 short-term restorative care places being released.

 

Impact Study ‘funding following the consumer’

The announcement of $300,000 for an impact study to look into ‘funding following the consumer’ signals the Government’s in-principle support for the transition of residential aged care to the consumer. This is consistent with the direction set in the Sector Committee’s Aged Care Roadmap, that is, moving towards a consumer driven market based, sustainable aged care system.

 

Whilst ACSA is pleased to see that the Government has committed funding for the feasibility study before any changes are made there are issues that need to be addressed including ensuring ongoing service provision for disadvantaged or special needs older Australians, regional, rural and remote providers or those operating in areas where the market does not function effectively. Additionally, opening up of the market will potentially have impacts on issues such as capital re/developments and investment into the sector. The move to a more open market approach will need to occur over a number of years to ensure the sector can adjust appropriately.

 

Palliative Care

The Government has committed to funding of $32.8 million over four years from 2018-19 for a trial to improve palliative care for elderly Australians living in residential aged care facilities, contingent on matched funding from the States and Territories. ACSA highlighted the importance of improving palliative care services in residential aged care in the ACSA 2018-19 Pre-Budget Submission to allow older Australians the right to choose where they die. 

 

Elder Abuse

ACSA applauds the additional funding of $22 million which has been allocated to fund trials of specialist elder abuse services to protect vulnerable Australians. The funding will finance the creation of an Elder Abuse Knowledge Hub, a National Prevalence Research study and development of a national framework and approach including a National Plan on Elder Abuse. ACSA identified the need for increased efficiency in reporting of elder abuse in the ACSA 2018-19 Pre-Budget Submission believing that reducing the incidence of elder abuse across our communities is a priority for all Australians.

 

Transition Funding to new Standards

Residential aged care providers will be provided with $50 million over two years from 2018-19 to implement the new Aged Care Quality Standards. Whilst modest this is a welcome injection of resources to assist providers to transition as the new Standards are much more ‘consumer focused’, less ‘process focused’ and providers will require support to adapt to this change in emphasis. 

 

Unlike residential care, Home Care providers will not receive funding to support the transition to the new Standards. ACSA will raise this as an issue.

 

Dementia

The Government will provide $5.3 million over four years from 2018-19 for the development of technological solutions to support people living with dementia to better manage their care. Innovation and investment in this area needs to be supported and accelerated.

 

Home Care

The Government will fund 14,000 additional high-level home care packages, which is in addition to the 6,000 packages released in the Mid-Year Economic and Fiscal Outlook.

 

This means by 2021-22 more than 74,000 high level home care packages will be available, which is an increase of 86 per cent on 2017-18.

 

The Department of Health Data Report 1 October-31 December 2017 noted that of the 104,602 people waiting for their approved package, 11,126 consumers with approval for a Level 3 or Level 4 Home Care Package have been waiting six months or more to be assigned a home care package.

Of these, 376 consumers with approval for a Level 4 Home Care Package have been waiting more than 12 months.

 

ACSA highlighted the need for additional high-level Home Care Packages in our 2018-19 Pre-Budget Submission supporting the recommendations of the Tune Report. While ACSA believes the additional Home Care Packages will contribute towards reducing the significant demand for Level 3 and 4 Home Care Packages, ACSA believes significant new funding is still required as there remains a large gap between the availability and the demand for high level Home Care Packages.

 

ACSA will continue to advocate for new funding as recent Home Care Data Reports show us that of the 50,000 packages assigned between October and December 2017 nearly 48,000 were in or assigned an interim level package, with less than 5% assigned packages at their approved level. Additionally, consumers entering the national queue at package Levels 3 or 4 are likely to be allocated a Level 2 in the first instance and are likely to wait somewhere between six to nine months for that and ultimately 12+ months to receive their approved package level. One in every four people assessed for a Level 4 package is not receiving a service. This significant and ongoing unmet demand needs to be addressed by a mixture of a freeing up of the market, significant increases in government funding, along with increased consumer contributions to their care (with provisions where the government acts as a ‘safety net’ for disadvantaged older Australians). Again this would be consistent with the direction of the Aged Care Roadmap.

 

Aged Care Quality and Safety Commission

The Government’s plan to strengthen the regulation of aged care services to respect and protect older Australians is reflected in the establishment of a new Aged Care Quality and Safety Commission from 1 January 2019.

 

Funding of $253.8 million over four years from 2018-19 has been allocated to support the functions of the new Commission.  ACSA acknowledges that this has been announced previously by the Minister and awaits further detail as genuine consultation with the industry is important.

 

The Government will provide $32.6 million over four years from 2018-19 to enhance the regulation of aged care provider quality to better identify risks and respond more quickly to care failures. Additional funding of $8.8 million over four years from 2018-19 will be provided to improve the transparency of information on aged care provider quality.

 

A number of additional initiatives will be introduced to ensure safety and quality care standards are maintained for all aged care homes. These include:

  • My Aged Care will be improved with an investment of $61.7 million to make it easier to use, along with simplifying the forms required to apply for aged care services.

  • $7.4 million will be provided to trial navigators to assist people to choose the aged care services that suit their needs.

 

Unannounced Visits Levy

The unannounced visits levy has been deferred to 1 July 2020. ACSA welcomes this deferral. ACSA has lobbied consistently against the introduction of the levy and delayed introduction until 2020 is a good interim outcome for the sector. We will continue to lobby against the introduction of the levy at all.

 

Rural, Regional and Remote

The Government will invest $145 million to improve aged care in regional and remote areas, including $40 million for regional providers for minor capital and maintenance requirements, and $105 million to expand services to the Indigenous community.

The Capital grant component of $40.0 million over five years from 2018-19 is to be available to support aged care providers in rural and remote areas to undertake urgent building and maintenance works. ACSA applauds such grants as they provide the opportunity for smaller rural, regional and remote facilities to upgrade their built form improving services for residents and the work environment for staff. Currently around 56% of providers in these locations are losing money (StewartBrown December 2017). We know that compared to their metropolitan counterparts they have significantly higher expenses, including wage costs and lower overall financial results (ACCFA Rural and Remote Providers Report 2016).  Often without such grant assistance many of these services simply would not be able to upgrade. ACSA will be interested in the associated guidelines to better understand the definitions of ‘urgent’ and ‘maintenance works’.

 

These grants that enable facilities to upgrade, recognise that these services are integral to the regional, rural and remote towns that they are located within. They services are often significant employers within these communities, generating vital economic and employment activity and therefore ongoing investment is essential. The recent HESTA Workforce report ‘Transforming Aged Care’ highlighted that 40% of jobs in aged care are regional based.

 

A total of $105.7 million over four years from 2018-19 (including $32.0 million from within the existing resources) has been committed to support the National Aboriginal and Torres Strait Islander Flexible Aged Care Program to deliver additional residential aged care places and home care packages in remote Indigenous communities.

 

ACSA welcomes the increased funding believing the ongoing delivery of residential care in rural, regional and remote communities is paramount. This belief is reflected in our 2018-19 Pre-Budget Submission, where ACSA called for the Government to actively explore funding models to ensure the ongoing viability and sustainability of rural, regional and remote services as the aged care sector moves towards a consumer‑driven market‑based system ensuring consumers of aged care services in regional and remote Australia receive equity of access to Government funded aged care services.

 

The Government will provide $83.3 million over five years from 2017-18 to achieve stronger rural, regional and remote health outcomes by aligning the distribution of the health workforce to areas of greatest need and building the capability of Australia’s medical practitioner workforce. The Government states they will deliver an additional 3,000 new specialist medical practitioners and 3,000 additional nurses over the next 10 years however it is not only medical practitioners and nurses who are in short supply in these communities. The aged care sector in rural, regional and remote communities can often experience difficulties in accessing other health professionals such as physiotherapists, occupational therapists, speech pathologists. While ACSA acknowledges this is a step in the right direction in increasing health professionals in remote communities there is still a long way to go and the need for specific programs to support the development and retention of the aged care workforce are required.

 

The Government has announced they will reform the Community Development Program (CDP), redirecting funding of $1.1 billion over four years from 2018-19 to better meet the unique needs of job seekers in remote Australia and to aid their transition into paid employment. The measure will commence from 1 February 2019. ACSA hopes the injection of funds into rural, regional and remote employment opportunities will assist residential and community aged care providers attract and retain staff.

 

ACSA states that while the injection of funds is welcome, the certainty of ongoing service and workforce funding remains critical to the ongoing delivery of residential aged care in rural and remote communities into the future.

 

ACSA is pleased to have launched a new national Workforce and Industry Development Unit to assist providers to build the aged care workforce of the future. 

 

ACSA’s new unit is a national approach to tackling one of the biggest challenges facing the sector now, and into the foreseeable future. Collaboration between various workplace services has worked well in Tasmania to support providers to attract, recruit and retain the aged care workforce they need now, as well as plan for their future needs. ACSA wishes to apply that successful approach nationally so providers around the country have access to the same level of responsive workforce support that has had such great results for employers and aged care workers in Tasmania. We believe this initiative will help to strengthen the links between the right fit’ workers, and the skills and knowledge they need to progress their career in aged care.

 

ACSA’s new nationally-focused unit brings together a range of State-based resources to facilitate improved collaboration between aged care service providers, training organisations, employment agencies, government departments and other stakeholders involved in workforce development. 

 

A coordinated and collaborative approach to workforce planning has significant flow-on benefits to the community through employment and services.

 

As the peak industry body, ACSA can play a valuable role providing the support, opportunity and careers to foster the aged care workforce and ensure it thrives into the future to meet the growing needs of our ageing population.

 

Prudential

The government is to provide $8.6 million over four years from 2018-19 to improve the management of prudential risk in residential aged care facilities including through the introduction of a levy to secure accommodation bonds.

 

ACSA supports the principle of protecting the refundable accommodation deposits of all care recipients living in aged care facilities. We note that resident refundable deposits are currently protected by the Bond Guarantee Scheme (the Scheme) and that with only ten default events across the life of the scheme to the tune of approximately $43 million (from a Bond pool of $23 billion) the risk to government is low. Government has also always had the ability to levy the sector, which it has chosen not to do.

 

We will seek further detail on what the government is planning in relation to both ‘strengthening’ the prudential arrangements that are currently in place as well as introducing a mandatory levy for default events exceeding $3 million in any fiscal year.

 

The Ernst Young (EY) Report, commissioned by government to review the current legislative and operational framework of refundable deposits has made a number of recommendations that have the potential to significantly impact providers, particularly those experiencing viability pressures, smaller providers and regional, rural and remote services. Of particular interest is redefining liquidity standards and introducing capital adequacy requirements, including a recommendation limiting a provider’s ability to charge Accommodation Payments should they not meet these requirements.

 

ACSA has undertaken an analysis of this and will shortly release a report with recommendations for alterations to the EY proposals.

 

There is at this stage little detail as to how the government plans to implement such a levy. It is unclear whether this is to be a ‘flat-rate’ or a ‘risk rate’ levy.

 

ACSA has already raised potential unintended consequences of this approach with the Departmental Ministerial Offices. It is pleasing to note that there is an intent to engage with industry on how the levy will roll out. ACSA will work to ensure the best outcome given its introduction is now imminent.

 

Housing Affordability

The Government will continue to work with the States and Territories to reform the National Affordable Housing Agreement and provide ongoing, indexed funding for a new National Housing and Homelessness Agreement (NHHA) from 2018-19

As part of the NHHA, the Government will provide an additional $375.3 million over three years from 2018-19 to fund ongoing homelessness support services, with funding to be matched by the State and Territory Governments

  • This is being complemented with funding in State budgets, commencing with the release of the Victorian Budget last week

 

The new National Housing and Homelessness Agreement is also expected to commence on 1 July, providing $7 billion in housing funding and an additional $620 million for homelessness services over the next five years

  • ACSA has advocated for a national housing strategy for older Australians as noted in ACSA’s pre-budget submission to State Governments. ACSA supports nationally consistent incentives and interventions that could assist older Australians who wish to move to housing that is more accessible.

  • ACSA also supports and will advocate for increasing the supply of social and affordable housing. With older single women increasingly experiencing financial and housing hardship, more needs to be done to address this immediate and pressing need.

  • There needs to be more resources through the homelessness supplement to support provision of appropriate aged care.

 

The Government will expand the Pension Loan Scheme - which allows pensioners to borrow against the value of their home and other assets without selling up – and will encourage older homeowners to remain in their properties. The measure, in which the government is investing $11 million, will allow all older Australians, including self-funded retirees, to boost their fortnightly income stream to 150 per cent of the Age Pension rate using the equity in their homes. These monies can be used to support retirement needs, including paying for aged care.

 

Other related Housing initiatives:

  • $5.5 million over three years to AHURI (Australian Housing & Urban Research Institute) for research and $4.6 million over four years for ABS and $0.02 million in 2018/19 for AIHW (Australian Institute of Health and Welfare) to improve data related to housing and homelessness

  • This will support evidence-based strategies to address housing affordability and homelessness

 

Integrated Carer Support Services

The Government is to provide $113.3 million over five years from 2017-18 for a new Integrated Carer Support Services model to provide a range of early intervention and preventative services for carers. The government indicates the new approach is expected to lead to better longer-term outcomes and improved well-being for carers compared to the current costly and reactive crisis interventions.

ACSA is supportive of improved carer support services as this underpins the choices older Australians make to remain living within the community amongst their family, friends and support networks. Appropriate support for carers enables them to continue to care for loved ones at home avoiding premature admission to residential services.

 

Mental Health

The Government will commit a total of $102.5 million to improve access to psychological services for older Australians. This funding includes:

  • Funding of $82.5 million to be funded over four years from 2018-19 is targeted for mental health services for people in residential aged care facilities, this being delivered through the Primary Health Networks.  ACSA has long advocated for equitable access for older Australians living in residential facilities (with those living in the general community) to government subsidised mental health services and we will continue to pursue this as an outcome for our members and their residents.

  • A further $20.0 million funding has been allocated over four years from 2018-19 for a pilot to improve social connectedness of Australians aged over 75 years. The funding will commence with a pilot service, led by mental health nurses, for people assessed as having, or at high risk of, mental health and health conditions associated with social isolation and/or loneliness.  

  • These monies can be used to support retirement needs, including paying for aged care. best outcome given its introduction is no

 

ACSA welcomes additional mental health services for older Australians, acknowledging the need for additional mental health funding in residential aged care was included in the ACSA 2018-19 Pre-Budget Submission. ACSA supports the additional funding as it should result in increased access to services for residential aged care facility residents and increased support for residential aged care providers in managing behaviours of concern.

ACSA supports the development of a national mental health plan that is inclusive of mental health for older Australians regardless of where they live, whether in the community or in residential aged care. We believe all Australians are deserving of equal and equitable access to mental health services.

 

Department of Human Services – reduction in staff directly employed

The Budget papers are showing a reduction of 1,280 in staff directly employed by the Department of Human Services from 28,587 in 2017-18 to 27,307 in 2018-19.

While the Department also uses contracted staff and people employed by outsourced providers, it is to be hoped that this reduction does not have a negative impact on what is often already a poor service to aged care providers, particularly in relation to the well-publicised and problematic aged care payments system.

 

Guaranteeing Medicare – modernising the health and aged care payments systems

As part of the 2018-19 Budget, the Government announced it will provide an additional $106.8 million over four years from 2018-19 to modernise the health and aged care payments systems.  This measure includes funding for replacing and decommissioning ageing ICT systems, upgrading cyber security, and introducing user experience improvements for consumers and providers of health and aged care services.

Whilst this would appear to be a positive measure we note the protracted problems with the aged care payments system for providers, with many providers being owed significant amounts of funding from DHS, many of whom employ dedicated staff to manage the ongoing and regular payments errors. A permanent fix for the problematic system cannot come soon enough for the sector. At this stage, there is no information on timing for the new aged care payment system.

 

More Choices for a Longer Life – jobs and skills for mature age Australians

The Government will provide $189.7 million over five years from 2017-18 to support mature age Australians to adapt to the transitioning economy and develop the skills needed to remain in work.

The funding is for a range of measures including targeted training to help mature age job seekers aged 45 years and over and who are registered with a jobactive provider; training funding of up to $2,000 for workers aged 45 to 70 years to take up reskilling or upskilling opportunities, with the Government contribution to be matched by either the worker or their current employer; and $1.1 million in 2018-19 to restructure the Employment Fund to allow additional wage subsidy places for mature age employees.

With predicted significant shortages in the aged care workforce over the next decade, with aged care workers either leaving the workforce completely or leaving to work in other areas of the employment market, strategies that encourage the uptake of mature age workers suitable for our workforce are to be supported, albeit understanding the challenges that come for mature age workers working in roles that involve known manual handling risks.

 

Digital Health and e-prescribing for medicines safety

The Government is to provide $28.2 million over five years from 2017-18 to upgrade the e-prescribing software system used by clinicians to prescribe medicines. This measure supports a national electronic prescribing system that will contribute to Pharmaceutical Benefits Scheme efficiency, compliance, drug safety and data collection.

ACSA supports improvements to safety for the prescribing of medicines for older Australians. Transition points of care between older Australians living at home or in aged care services, acute care, GPs and community pharmacies are acknowledged risk points for medicine safety. The work of Australian Digital Health Agency, through their Medicines Safety Program Steering Group, on which ACSA sits, addresses e-prescribing safety with a view to reducing the rate of incidence of adverse drug events (including loss of life), through fewer prescribing errors, including for older Australians.

 

Investing in Health and Medical Research

The Government is to invest $275.4 million from the Medical Research Future Fund (MRFF), including, $18.1 million over four years from 2017-18 for a Keeping Australians Out of Hospital program to support preventive health, behavioural economics and reduce avoidable presentations to hospital.

ACSA supports measures to reduce avoidable hospitalisation, including for older people, as we know it can be confusing and distressing for older people with cognitive impairment. We would like to better understand to what extent the $18 million will be targeted for hospital avoidance programs for this cohort of the population and we will advocate strongly for ACSA to be involved representing the needs of our sector.

Whilst we support hospital avoidance measures we also advocate for equal access for older Australians, particularly those residing in residential aged care facilities, to acute care services. All Australians have the right to equal and equitable access to timely health care services, regardless of where they live.

 

Visas for General Practitioners — targeting areas of doctor shortages

The Government is to improve the targeting of visas for general practitioners to areas of doctor shortages. From 1 January 2019, the Government will set a planning target of around 2,100 overseas trained doctors per annum to contribute to the continued growth in overall doctor numbers. Better managing the total number of doctors entering the system and directing them to areas of need has also made available $415.5 million over four years from 2018-19 to fund Health policy priorities.

ACSA supports measures to improve access for older Australians to medical services in rural, regional and remote areas, which will assist people to continue living within their chosen communities. This will assist these people to remain connected to family and friends and their social networks, contributing to their quality of life as they ‘age-in-place’.

 

2018-19 Budget Webinar featuring Pat Sparrow, ACSA CEO

Dated 10th May 2018.