A recent analysis has shown that many elderly residents in Australia are not getting the care they deserve and are entitled to. The UTS Ageing Research Collaborative, which we are part of, just published its mid-year report for 2023–24 on the aged care sector in Australia. This report specifically looked at the level of direct care provided by nurses and personal care workers to residents in aged care facilities. While there is a known worker shortage in the economy, with unemployment rates at historically low levels, some aged care providers are still delivering excellent care. However, many are not. About two-thirds of aged care facilities are not meeting the required levels of direct care, despite receiving millions from taxpayers to provide this care. Some facilities are making large profits as a result.
Following the Royal Commission into Aged Care Quality and Safety, the federal government promised to set minimum standards for direct care time for residents. In 2022, all providers had a year to increase their staffing to meet these standards, with funding provided. These standards require an average of 200 minutes of direct care per resident each day (from registered and enrolled nurses and personal care workers), with 40 minutes of that care delivered by a registered nurse. The actual care time each resident receives can vary depending on their assessed needs. These standards became mandatory on October 1, 2023. For the first three months after these standards were enforced, only half of all providers met or exceeded the total direct care minutes or the registered nurse target. Only 36% met both targets.
This was a small improvement over the previous quarter, but some providers still did not meet expectations. Residential aged care is funded for three primary activities: direct care (such as nursing and personal care, largely funded by taxpayers), everyday living services (like food, laundry, and cleaning, mostly paid for by residents and capped at 85% of the single age pension), and accommodation (paid by the government for those with limited means and self-funded for those with higher incomes and assets). Based on advice from the Independent Health and Aged Care Pricing Authority, the government has raised the funding for direct care per resident in aged care homes. The expectation is that this funding will allow homes to hire enough staff to meet care targets.
The report compares each aged care home’s average funding for direct care to its spending on this activity. In 2021 and 2022, homes generally had small surpluses where revenue slightly exceeded costs. This outcome, with funding just above costs, is what the new pricing reforms aim for. However, the situation has changed recently. The government has significantly boosted funding to cover staffing costs to achieve the mandatory care levels and increased funding due to wage increases for direct care staff, such as nurses and personal care workers, as decided by the Fair Work Commission. This taxpayer money is given to each home, regardless of whether they hire enough staff. Due to some providers not meeting their targets by December 2023, the sector on average generated a significant direct care surplus of over A$13 per resident daily.
Some providers have been using this surplus to offset losses in everyday living services and accommodation. We found homes that were not providing the mandatory care minutes were, on average, enjoying financial gains from their direct care activities. Conversely, homes that exceeded required staffing care levels were losing money in direct care. Additionally, homes not meeting mandatory care minutes were often in metropolitan and larger regional areas and were more likely to be operated by for-profit providers. In summary, although we recognize the challenging labor market and efforts by many homes to meet or exceed their requirements, a large number of residents are still not receiving the necessary care. This means taxpayers are funding direct care that is not being provided.