Aged Care budget takes a hit

Wednesday 14 May 2014

The Federal Government has redirected the $1.5 billion from the previous government's "Workforce Compact" back into the general funding pool for aged care.

This will mean an increase of 2.4 per cent in the basic subsidy for both residential and community care providers.

However, the downside is that this increase will be funded by absorbing the previously additional $1.5 billion Workforce Compact money. Bargaining for fair pay increases for aged care members will remain a big challenge with no requirement for employers to pass on any of the increased basic subsidy to workers.

There will also be a reduction in the annual growth rate in funding of the Commonwealth Home Support Program from 2018-19 from 6 per cent to 3.5 per cent, and the Payroll Tax Supplement paid to for-profit aged care providers will end.

Overall, it's a disappointing budget for aged care - a sector which desperately needs new investment and increased funding to meet the needs of our ageing population.