AGED care providers are reeling after the federal government announced an extra $1.2 billion in funding cuts over four years to curb growing costs of residential care for people with complex needs.
The changes, announced in last night's budget, mean the formula for deciding funding levels for patients with complex needs will be changed, and the rate of indexation of complex health care payments to providers will be halved in 2016-17.
They come as the proportion of patients entering aged care with complex needs grows, and on top of the budget's failure to address the next step in the aged care reform process, with no timeframe set for changes that would remove the rationing of aged care places.
The government has increased funding estimates for residential aged care by $3.8 billion over five years from 2016-17 to 2019-20 "in light of higher than anticipated growth in funding claims".
"Aged care residents will continue to get the care they need, (and) the highest levels of funding will go to the residents with the highest needs," the budget papers said.
"The government will also further consult with the sector to strengthen the way care funding is determined, including options such as separating residents' needs assessments from service provision, and having it done by an independent party."
Leading Age Services Australia spokeswoman Beth Cameron said the extra $1.2 billion in cuts came on top of $1.9 billion already cut from aged care services since 2014-15.
She said the move showed the government was in denial about the costs of providing complex care.
"Increasing numbers of senior Australians, due to a rapidly ageing population, are now requiring more complex care than ever before," she said.
"And with complex care comes more cost.
"The sector is already experiencing financial difficulties, with about 38 per cent of aged care providers currently deemed financially unviable.
"The additional viability supplement funding and changes to business tax arrangements announced today are welcome, however in the face of $3.1 billion in cuts it will have a marginal impact on lifting the financial viability of many providers."
Opposition ageing spokesman Shayne Neumann said the cut in complex care subsidies would hit aged care residents the hardest.
"This latest round of savage cuts brings total aged care funding cuts to $3 billion since this government came to power," he said.
On the plus side for aged care, about 7000 people on home care packages in remote or regional areas will benefit from an increased viability supplement from January 2017, which will also mean boosts for about 250 mainstream aged care providers in areas including Holbrook in NSW,Childers in Queensland and Rushworth in Victoria.
Changes to update the supplement will cost $102.3 million over the next five years.
The government will also invest $136.6 million over five years from July this year to boost the capacity of the My Aged Care contact centre.
The volume of calls to the centre has grown from 110,000 in 2013-14 to an estimated 1.28 million in 2015-16, and volumes are expected to increase by 90 per cent in the next five years.
However Council on the Ageing chief executive Ian Yates said more could have been done.
"The $136 million contained in the budget to improve the My Aged Care website and contact centre is very welcome, but needs to be accompanied by other major measures to address the core failures in our aged care system," he said.
"This includes giving older people control over their own residential aged care in the same way they will have control over their home care packages next February - this is a huge missed opportunity.
"We will be forcefully arguing to all political parties to adopt this commitment as we move into the federal election campaign."
