A huge shift in Australian aged care has been revealed deep within the budget papers.
Older Australians are increasingly opting to receive care at home rather than in residential aged care, a shift that the federal government projects will save billions of dollars.
Tuesday night's federal budget reveals the government is anticipating the number of residential aged care places it needs to fund will drop from next year.
The budget papers show a temporary reduction in the residential aged care provision ratio, meaning for every 1,000 people over the age of 70, the government is now expecting to fund about 60 residential places, rather than 78.
That decline in residential numbers, the government says, will lead to budget savings of $2.2 billion over three years, starting in 2024, all due to what Canberra says is "an increasing preference of older Australians to remain in their homes".
"What we saw in this budget was the government downgrade their estimate of how many people they expect to need residential aged care beds in the near future," Aged and Community Care Provider Association chief executive Tom Symondson noted.
"We were slightly surprised by how big that downgrade was."
'Five years of aged scare' leads to decline
The residential aged care occupancy rate has been declining for years.
In 2018, 95 per cent of all available places were occupied — and by last year that had dropped to 91 per cent, according to data from UTS and StewartBrown, an accountancy firm that surveys aged care providers.
Ian Henschke, chief advocate for National Seniors Australia, said there was a simple explanation.
"I have heard, 'I don't want to go into aged care,' because [people] have had had five years of 'aged scare'," he said.
The Royal Commission into Aged Care Quality and Safety began in October 2018. Soon after, the occupancy rate in residential aged care dropped.
During the COVID-19 pandemic, the aged care sector again came under heavy scrutiny, with hundreds of aged care deaths attributed to poor management, and residents blocked from seeing friends and family.
"We had a royal commission highlight the problems in aged care, we've had COVID, we've had television investigations like Four Corners, we've had reports about poor food in aged care," Mr Henschke said.
"In many ways, people have voted by staying in their homes."
Mr Symondson agreed years of negative coverage had taken a toll.
"It's absolutely had an impact," he said.
"We still have a huge amount of work to do to improve the reputation of our sector.
"A lot of people during COVID held off on making that decision to move into residential care … for much longer because they were worried about the lockdowns, the impact of COVID."
Home care grows as aged care slows
From 2012 to 2022, the number of people receiving Commonwealth-funded home care packages nearly quadrupled from 55,000 to 216,000.
The number of people in residential aged care rose by 8 per cent over that period.
In the budget, the government said the $2.2 billion saved in residential aged care funding would "be redirected to our commitments in the health and aged care portfolio".
A government spokesperson said savings measures had supported the government's overall investment in health and aged care, but were not directly linked to specific programs.
They said aged care funding, in total, would increase from $30 billion in 2022-23 to $42 billion in 2026-27.
Aged Care Minister Anika Wells has addressed other significant aged care aspects of the budget, including $11.3 billion over five years to fund a 15 per cent pay increase for 250,000 aged care workers.
"I think $11.3 billion to increase pay is an enormous deal," Ms Wells told ABC Brisbane.
"It's $7,000 a year for professional carers and $10,000 a year for nurses.
"We've got modelling that says that the … commitment to lifting wages should attract about 10,000 more workers to the sector."
Those workers will be needed to meet the unceasing demand for home care packages. An additional 9,500 packages were announced in the budget.
"The pay increase for workers is a good start. It will make our industry more attractive for people to both stay working in and to join," Mr Symondson said.
"But we still don't have enough people in Australia to meet the worker demand."
At in-home aged care provider Home Instead in Geelong, they're more optimistic.
"It's all going in the right direction," said owner Giovanni Siano, whose company has about 1,000 clients receiving care at home.
He said the pay increase would make it easier for his business to attract workers.
"Our caregivers will have an hourly rate of $36 to $37 an hour," he said.
"I feel like that's a much stronger proposition."
Home care reform delayed one year
Mr Siano was also pleased to learn the budget had delayed a significant reform to the home care system, the Support at Home program.
"Basically, it's going to change the whole funding model. Clearly the government is not ready for that."
Ms Wells said it was not a decision the government took lightly.
"I am genuinely listening to the feedback [from] the people that this matters to," she said.
"The feedback has been very clear that they want more time."
The starting date for the Support at Home program has now been pushed back one year, from July 2024 to July 2025.
If you are unable to load the form, click here.
