Aged care providers will lose $1.2bn over four years to help curb a predicted blowout of $3.8bn in costs in the residential aged-care system. However, transitional assistance gains $53.3m and the My Aged Care web portal will receive a $137m boost.

The budget papers say: the government will achieve efficiencies of $1.2bn over four years through changes to the scoring matrix of the Aged Care Funding Instrument that determines the level of funding paid to aged-care providers. This aims to bring the ACFI back into the budgeted growth trend to stabilise higher than expected growth. The savings from this measure will be redirected by the government to fund health policy priorities.

Rural and remote providers will be supported by an extra $102.3m over five years to help address the cost pressures associated with those areas. COTA Australia Chief Executive Ian Yates says older Australians will be disappointed that the next steps in aged care reform had been left out of the 2016 Budget with no timeframe for ensuring people can access the aged care they need, when they need it. “Unfortunately, aged care is still a rationed system which means people who have been assessed and approved as eligible for care don’t get it because of the rationing. “This means thousands of older people still languish on long aged care waiting lists or may have to move to inappropriate care or care far from loved ones. “The $136 million contained in the budget to improve My Aged Care website and Contact Centre is very welcome but needs to be accompanied by other major measures to address the core failures in our aged care system. “This includes giving older Australians control over their own residential aged care in the same way they will have control over their home care packages next February. This is a huge missed opportunity.

Mr Yates points out COTA, the National Aged Care Alliance and the government’s own Aged Care Sector Committee’s Roadmap for Reform have all laid out a clear path for change over the next five years. “This budget was a great opportunity for the government to commit to that process and timeframe for achieving this overdue reform,” says Mr Yates, adding COTA will be forcefully arguing to all political parties to adopt this commitment as we move into the Federal election campaign. Mr Yates is also concerned about the removal of the carbon tax compensation for future pensioners and benefit recipients. “While the rest of the population enjoys the benefits of the restructured income tax arrangements which were put in place for the carbon tax, it seems unfair that those who have least resources will have these benefits withdrawn.”

Mr Yates also points out a range of other significant issues largely absent from the 2016 Budget. These include:

  • An increase in the Newstart Allowance – 25% of Newstart recipients are over 50 and are driven into poverty by long term unemployment;
  • Measures to increase mature age workforce participation and reduce age discrimination;
  • Affordable housing measures to address the increasing rates of homelessness and housing stress for older people; and
  • New measures to address mental health needs of older people and in particular the high rates of suicide in men over 80.

COTA would also be keen to see the details of the administrative efficiencies being sought in the Department of Human Services which amount to $80million over four years and could impact on the Department’s already questionable ability to provide quality services. In other areas of the budget, superannuation savings of high-income earners and wealthy retirees have been targeted with a $1.6 million cap on super balances eligible for tax-free earnings in retirement. For those still working, concessional contributions annual cap has been lowered from $30,000 to $25,000 and super contributions tax is doubled for those earning between $250,000 and $300,000 a year.

The government has also set aside $10m to continue a blitz on compliance audits by the Australian Aged Care Quality Agency throughout 2016-17.


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