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Rethinking aged care: at home or in a home?

National Seniors Australia Chief Advocate Ian Henschke looks at a complex issue.

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  • Health
  • Read Time: 6 mins

I was recently asked about aged care facilities that had announced closure. It’s been reported that since last September, 23 residential care homes have either shut or announced they will shut.

In Perth last April, the Brightwater Care Group said it was closing three homes, affecting 75 residents. But it added in a press release that it recently opened a 128-bed facility.

One of the providers in Sydney, Wesley Mission, cited “challenges to workforce and flow on impacts from the national reforms to Aged Care”. The CEO, Reverend Stu Cameron, had already shut one home last year and was announcing the remaining three Wesley-operated homes would close by the end of May.

The Mission says it will continue to provide in-home care and retirement living “to help people stay in their homes for longer”.

These closures have become a political issue as well an aged-care welfare issue. The Opposition says the closures are because of the Labor government’s “reckless” push to speed improvement in aged care.

The government announced that, from 1 July 2023, there would be a commitment to “get nurses into nursing homes 24/7” and to “fix the aged care crisis”. This was originally supposed to take place from 1 July 2024.

So, what’s the truth? Are aged care homes closing because it’s become too hard to improve the workforce to provide better care?

High rate of residential care

National Seniors always looks at the evidence and it’s worth noting although 23 homes have closed in the past nine months, we know 51 homes closed between 2020 and 2022. So, a home closed on average almost every two weeks even before the reforms were announced. 

We also know from the OECD (Organisation for Economic Cooperation and Development) that Australia has one of the highest rates of residential aged care for people over 80.

Australia has 18.9% of its over 80 population in long-term residential care compared with Germany’s 10.7%, Canada’s 12.0%, and Sweden’s 12.6%.

But now that’s changing as more and more people stay in their own home for as long as possible. The revelations of the Royal Commission and the tragic effects of COVID have seen that trend get stronger. 

The average occupancy rate in residential care homes in Australia was 95% in 2018. By 2020, it had fallen to 88% and the most recent figure, from 30 June 2022, revealed an occupancy rate of 86%.

We know that, because people are going into residential aged care at an older age, they are more likely to be suffering more frailty, more complex health issues, and more dementia.

Aged care homes are becoming more like hospices, and many say we should see them as part of the hospital system and fund them accordingly so they can provide more nursing care, dementia care, palliative care, and end-of-life care.

The Royal Commission outlined the urgent need for better paid and better trained workers and laid out a pathway for better care. The better pay is happening, now we need better care and better training.

Who should pay?

How to fund this is the next big question. The Royal Commission recommended a levy. This was rejected by both parties – but you have made your view quite clear. 

When we surveyed members, an overwhelming 85% wanted aged care funded either out of general revenue or a levy, just like the rest of the health system.

Under the present system, the government pays 85% of aged care costs. The resident pays the rest. There’s a user pays contribution and means testing is also applied.

In residential aged care, the government takes a minimum fee equivalent to 85% of the aged pension. The provider also has separate charges. It’s complex. 

Our 2021 research paper, Planning for Aged Care Costs, showed more than 90% of NSA members owned their home, so it seems the idea of staying in your home is a reality for most.

Using some of that equity to stay out of residential care and buy care to top-up a home care package may be the way of the future. 

The government has just released the draft National Care and Support Economy Strategy. It mentions the need for a “national conversation” about the split in contributions between government and individuals. 

We will continue to make sure your voice is heard and continue to fight for a better, easier to understand aged care system.

Have your say here. 

Read our Aged Care research here.

Watch what was said about the state of aged care here.

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