Attwood Marshall Lawyers Aged Care Paralegal and Accredited Aged Care Professional Bindy Marshall discusses the latest news and developments that are impacting the aged care sector.
Federal Budget 2024-2025
The Australian Government released its 2024-25 budget, announcing that it plans to invest $2.2 billion in aged care reform. So, what does this mean in real terms?
Half a billion dollars will be spent in the next financial year to provide an extra 24,100 Home Care Packages, which should lead to reduced waiting times for HCP recipients and more Australians having the opportunity to remain in their own home. There is also the promise of additional staffing for My Aged Care and Centrelink to try and clear months of backlog for the processing of income and asset assessments for aged care.
Aged care workers are also in line for a pay increase and changes to carer payment (referred to as carer pension), which will allow recipients to work up to 25 hours per week. $1.4 billion will be invested to upgrade the sector’s technology and digital infrastructure. There will also be additional funding for the Quality and Safety Commission, and deeming rates will remain the same at 0.25 per cent and 2.24 per cent.
While these are positive outcomes that can be picked out of the budget announcement, overall, our sector has been overlooked with minimal decisions made for the long-term funding of aged care, which we know is a significant issue that needs to be addressed.
For example, while there has been much emphasis on the extra Home Care packages being provided, there has reportedly been a 35 per cent increase in people waiting for these packages, with an estimated 40,000 new packages needed in 2025. As of December 2023, there were over 50,000 people waiting for a HCP, over 13,000 more people than at the same time a year before.
One big, but unsurprising announcement, is that the start date of the new Aged Care Act has been pushed back to July 2025. More on that below.
More work to be done to meet governance standards
According to the latest sector performance report released by the Aged Care Quality and Safety Commission, too many aged care providers are still failing to comply with the regulator’s organisational governance requirements.
The Commissioner Janet Anderson said that compliance rates will be a “key focus area” and that providers will need to closely scrutinise their data to identify where they can improve.
Only 66 per cent of home service providers and 85 per cent of aged care homes were found fully compliant with the 42 requirements of all eight quality standards.
Quality Standard 8, organisational governance, now has the lowest rate of compliance in residential and home services. Organizational governance is vital for the smooth operation of an aged care institution, holding the governing body accountable for the delivery of safe and quality care and services. It encompasses processes like information management, financial governance, regulatory compliance, complaints handling and effective risk management.
Home service providers have also been told to address their compliance with personal and clinical care requirements, which fell across the sector.
The report, released in April, looks at data from between October and December 2023, the latest stats available.
Aged Care Steps seeks feedback on the regulation of financial advice for aged care
Education body Aged Care Steps is consulting on the licensing and regulation of aged care advice, amid fears that an increasing number of unlicensed and unregulated businesses and services are providing financial advice to older Australians and their families.
The organisation said there has been “a prevalence of superficial, often conflicted advice, no regulatory oversight and a lack of essential consumer protections, thereby putting the client at substantial risk.”
Navigating the financial complexities of the aged care industry requires a deep understanding of various laws, including the intersections between the Department of Health, the Aged Care department, and Centrelink. Additionally, financial advisors must consider significant tax implications, and how decisions can impact an individual’s investments, superannuation, and other forms of life savings.
Industry professionals and care service users are encouraged to review the discussion paper and give feedback through an online survey. The consultation will close on 10 May 2024.
Based on the responses received, Aged Care Steps said it will then develop a white paper and engage relevant industry bodies and regulators to ensure reforms prioritize the protection of older Australians, including by potentially making an Australian Financial Services License (AFSL) mandatory for those providing aged care funding advice, or applying financial product laws to Refundable Accommodation Deposits (RADs).
For financial advice, Attwood Marshall Lawyers will always refer clients to a qualified and well-respected practitioner who they can trust with their lifesavings. We also urge individuals to thoroughly research any “advisor” seeking their custom, including by checking that that person has an Australian Financial Services License through ASIC and that they have a legitimate ABN and office address.
Fair Work Commission confirms next stage of pay rises
Following a Fair Work Commission decision handed down 15 March, jobs across the aged care sector will see pay increases ranging from 3 to 28 per cent.
According to the Australian Financial Review, the pay rises will apply to roughly 250,000 aged care workers plus another 80,000 “indirect carers” such as cleaners, cooks and those who carry out laundry duties.
The increases are inclusive of last year’s 15 per cent pay rise for personal care workers, nurses, recreational activities officers and cooks, which the Federal Government had set aside $11.3 billion to cover.
The decision for the pay rises came after the Royal Commission recommended a significant boost in award wages to attract and retain more workers in the field, after reports that Australia has a 35,000 shortfall of workers each year compared to international best practice.
Some commentators have criticised the way the tiered system grants one category of worker a much higher pay rise compared to their colleagues in different roles. Others have voiced fears that pay rises for jobs like cleaning in just one sector could put wage pressure on other sectors, fuelling inflation.
However, we strongly believe these wage increases are long overdue and reflect the rightful compensation for these workers. Low wages have hindered recruitment efforts and it is hoped that this measure will incentivise more individuals to pursue a career within the sector.
Gov’t confirms no new levies or increased taxes
The Minister for Aged Care The Hon Anika Wells MP has confirmed that the government will not impose any increased taxes or a new levy to fund the costs of aged care. She also promised there will be no changes to the means testing of the family home for aged care.
The announcement followed the release of the Aged Care Taskforce’s final report, which recommended that the government continue to play a significant role funding aged care services, but not through a specific tax or levy. The taskforce was responsible for reviewing funding arrangements to develop a fairer system. It consulted extensively on possible solutions.
The 23 recommendations in the final report covered how best to support older people ageing at home for longer and offered up ways to ensure sustainable funding of aged care services, while also maintaining innovation, increased transparency, and quality care.
One suggestion, for example, was to ensure funding for daily living covered the full cost of these services, composed of a basic daily fee and a supplement. Another said residents and providers should be able to negotiate better daily living services for a higher fee.
Ms Wells MP said that the government will now analyse the recommendations and announce any big policy decisions in time.
Aged Care Act delay sparks mixed response
After media reports in early April that the Aged Care Act could be delayed for a year, the government confirmed that it has indeed put the commencement date of the legislation on hold.
The legislation was due to be rolled out by July 2024, however Channel 9 obtained leaked government documents suggesting it would have to be pushed out to July 2025. That has now been confirmed in the recent Budget announcement, as mentioned above.
Addressing the rumours, the Minister for Aged Care The Hon Anika Wells MP said that her department will continue to review the “extensive and valuable feedback” they have received from the exposure draft Bill, which was released in December 2023.
There was mixed response over the announcement, with some industry experts grateful for the pause, which they said should lead to a better understanding of the extent of the changes and a smoother transition when they kick in. Others expressed disappointment, arguing that older Australians have waited long enough for a better system that enshrines their rights in law.
The Aged Care Act is wide-ranging and is expected to introduce significant changes across multiple parts of the sector.
For example, heightened obligations and duties are expected to be placed on registered providers and their staff, ensuring that they take reasonable steps to avoid harming the health and safety of older people in their care. There will also be new civil and criminal penalties for non-compliance and a revised compensation regime set up for aggrieved individuals affected by a provider’s failings under the law.
The delay comes after the deadline for responding to a consultation on the draft Bill was extended from 16 February 2024 to 8 March 2024. The Aged Care Department had claimed that respondents had asked for more time to review the draft, citing its importance to the entire aged care sector.
Attwood Marshall Lawyers – helping people at every stage of life
Our dedicated team of elder law specialists have a comprehensive understanding of the aged care sector and are committed to helping people make informed choices that align with their needs and preferences.
We are passionate about the aged care sector and continue to monitor the industry changes that will impact aged care providers as well as residents and care recipients.
There are several financial and legal factors that need to be considered when an individual transitions to aged care, including reviewing service agreements and the individual’s estate plan. We are committed to providing our clients with personalized attention and support throughout this process, ensuring that their rights and interests are always protected.
If you or someone you know needs legal advice about transitioning to aged care or estate planning, we are here to help. Our Aged Care and Wills and Estates Department Manager, Donna Tolley, can be contacted on direct line 07 5506 8241, email dtolley@attwoodmarshall.com.au or free call 1800 621 071.
