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Delay Aged care act and sort out the mess

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f / n / ) A1 Australian Catholic H ealth Care A ssociation R E L E A S E

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Delay Aged'Care Act and Sort Out the Mess

The Australian Catholic Health Care Association has called for the Aged Care Amendment Act to be delayed in the Senate so crucial issues of funding for nursing homes, hostels and aged care programs can be resolved.

In its submission to the Senate Community Affairs Committee, the Association outlined the urgent issues still to be addressed in the Government's aged care reforms.

The Association's Executive Director, Francis Sullivan, reiterated that short stay nursing home residents should not have to pay the new accommodation charges or increased daily fees.

'Given that over fifty percent of nursing home residents either die or return to hospital within the first twelve months, residents are primarily seeking a health care service, if not a palliative care service rather than a residential one', he said.

'We still have the unsatisfactory situation where the new increased daily fees being paid by new residents in nursing homes will not add an extra dollar to care or capital. Furthermore as of next week two people sharing the same accommodation and the same care could pay a daily differential of $41 because of the new fees', Mr Sullivan said.

'This anomoly will be a source of antagonism and resentment among residents. It will work against the supportive and homelike atmosphere sought by nursing home providers.

'The Association calls on all Senators to seriously consider the financial and funding structure which accompanies the aged care reforms and to ensure that where increased user charges are being called for that all monies are directed back into the aged care program', he said.

27 March 1998

Contact: Francis Sullivan, Executive Director 02 6239 7633 (b) 02 6281 2878 (h) 0418 486 440 (m)

57 Hicks Street, (PO Box 57) Red Hill ACT 2603 Tel (02) 6239 763 5 Fax (02) 6239 7634 Email




26 MARCH 1998

The Association thanks the Committee for the opportunity to comment on the Aged Care

Amendment Bill 1998 before it for consideration. We appreciate the legislation is only part

of a more complete Aged Care Act that the Committee has considered previously.

However, like yourselves we are now faced with legislation that arises from significant

policy changes since the original Act was passed. In that light the Association would like

to make some brief comments over the general thrust of these amendments as they apply to

the overall purpose of the Aged Care Act.

Our submission does highlight the areas where the amendments have improved the

operations of the Act and consequently made the administration of residential aged care

more equitable. We commend the Government for these changes.

In our previous submissions to this Committee we stressed the importance of access to

nursing home and hostel care and our concerns over the impacts of increased ‘user charges’

in the system. Those concerns still remain.

It is still the position o f the Association that short stay nursing home

residents should not he charged new accommodation charges or increased

daily fees.

These people are primarily seeking a health care service. If for no other reason, there

should be continuity with the health system where entry fees and increased daily fees do

not exist. The recent debate over Medicare funding of public hospitals has highlighted the

problems that this financial disincentive can bring to the flow of nursing home type patients

from hospital to residential aged care settings.

The Association has always made the distinction with longer staying residents who seek a

housing option along with increased attendant and personal care. To that end we support

the use of accommodation bonds to assist with capital upgrading.

However, it is the policy of ACHCA that the Government should provide substantial

capital funding, along with the contribution from consumers, to ensure the adequate

upgrading and refurbishing of the sector. We contend that these amendments fall short of

that goal and must be supplemented through a Government sponsored capital works


Moreover, it is important to recall that these new accommodation charges and bonds are

being introduced along with increased daily fees for part pensioners and self funded


It is well known that ACHCA opposes the introduction of the income tested daily fees if

they don’t contribute to extra funding of aged care.

Certainly the new daily fees do contribute to the shortfall in the resident’s care subsidy,

however the anticipated savings to Government are not being redirected to essential areas of

need. We believe the wider community is not fully aware that the increased daily fees are

simply the result of the Federal Government’s cuts to the care funding of the frail elderly.

Unfortunately, nursing home and hostel providers are being placed in the situation of

charging fees that are not of their making, nor are they the result of proving any extra

service to the individual.

We contend that these new fees will be a cause of resentment and even antagonism between

residents. As of next week the situation could quite easily arise where two people, sharing

the same level of accommodation and care could be paying a fee differential of as much as

$41 a day. This does not lead to harmonious relationships in a setting meant to be home

like and supportive.

We contend that extra fees should provide extra funding, particularly in the areas of

community aged care , services for the intellectually and psychiatrically disabled and

dementia care at home.

From the commencement of the aged care reforms ACHCA has recognised that a proper

balance between community participation and personal responsibility was needed. From

our perspective this did not include massive public funding cuts to the aged care program.

We recognise the measures taken to date by the Government to respond to some of the

concerns raised by the community. We applaud the injection of funding for concessional

residents, the exemption of existing residents from new daily fees, the exemption of

nursing home people from accommodation bonds and the softening in income testing

requirements for self funded retirees and part pensioners.

We also appreciate the steps put in place by the Minister for Family Services to improve the

communication with providers and consumers over the impacts of the reform process.

Having said that, in the interests of fairness, we consider more changes are warranted.

Good legislation requires a viable financing structure and sustainable funding of those

services which complement the residential aged care program. These two issues cannot be

considered separately.

Ultimately, access to essential nursing home and hostel care should not be impaired by

one’s capacity to pay. It should also not be restricted due to one’s geographical location or

socio economic status. The amount of public funds available for rural and remote

communities is far too insufficient to meet the real costs of construction.

Already some homes are facing a precarious future. Having failed the certification process

they will now struggle to acquire the necessary capital to upgrade. ACHCA supports the

push for better standards of accommodation, but calls for a realistic strategy to assist

providers who seek to remain in the sector over the long term. At this stage the $20 million

allocated for industry restructuring will not meet this goal or effectively assist rural and

remote communities.

In analysing these amendments we call on the Committee to seriously consider the financial

structure in which the legislation will operate. At this stage, as our submission suggests,

we do not believe the Aged Care Amendment Bill 1998 should proceed through the Senate

until these outstanding, yet crucial, issues are settled.

We thank the Committee for indulging our considerations.