AUSTRALIA’S biggest Jewish aged-care homes could lose millions of dollars after the government announced plans to slash funding to aged-care providers.
Under the new scheme, the criteria that determines how much money a facility receives for aged-care residents is set to change, with the cuts predicted to cost the industry around $500 million.
Residents already receiving funding will not be affected, unless they are reassessed and their level of care changes. As a result, someone that enters an aged-care facility after July 1 with the same level of care needs as someone already in the facility will get less government support.
“We were shocked when we saw this government announcement,” Melbourne’s Jewish Care chief executive, Bill Appleby, said. He, along with the rest of the aged-care industry, is calling on the government to reverse these changes immediately before they come into effect next month.
“The government is taking a political position saying that the industry’s numbers are wrong, but we have done some modelling and if all of our residents were reassessed, it would mean a reduction in funding of $1.1 million per year.
“Next week you can have two residents living in two beds next door to each other with the same care needs but different funding for the provider from the government. How can you explain that to families?”
Sydney’s Montefiore Home chief executive, Robert Orie, said he is hopeful a solution will be found, but the situation is quickly escalating.
“We are working with the government at the moment,” Orie said. “This may ultimately result in a joint campaign between aged-care providers and other affected stakeholders such as unions and consumer advocates, if we can’t come up with a reasonable solution.”
The funding cuts could not have come at a worse time, with aged-care facilities still in the dark about another potentially crippling government scheme to cap up-front payments to homes.
Facilities can accept a lump-sum up-front payment for a resident but a proposal from the recent “Living Longer. Living Better” report into the state of aged care in Australia recommended the government put a cap on the size of those payments.
A spokesperson for the Department of Health and Ageing confirmed that the proposals will be implemented, but said the caps are yet to be determined.
Appleby said the industry is on edge. “They would never come up with a single cap across the country because an aged-care facility in Toorak or Rose Bay would have different costs compared to one in Parramatta,” he said. “But we don’t know how they will determine the cap. Will they take into account land costs? The cost of construction? Medium house prices in the area? We obviously need to build two new aged-care facilities but we won’t be pushing the go button until we have certainty and clarity around this issue.”
The cap is expected to be announced in October or November.
Montefiore Home chief executive Robert Orie (left) and president David Freeman