Services for older Australians in rural areas at serious risk

LASA says that it is alarmed at new viability warnings showing 65 per cent of rural and remote residential care facilities lost money in the first quarter of this financial year.


The independent analysis by Chartered Accountants StewartBrown shows the average net loss for rural and remote aged care homes between September 2018 and September 2019 jumped by $1,391 per bed per annum, to a loss of $3,963.


“Maintaining rural and remote aged care services is critical to enabling older Australians to age in place, as well as sustaining local communities. This is increasingly at serious risk,” said Leading Age Services Australia (LASA) CEO Sean Rooney.


“We have already seen the closure of regional aged care homes in recent months and the risk of missed care and more service closures is looming large in 2020.”


Mr Rooney noted that, despite the big challenges facing rural and remote aged care providers, the StewartBrown analysis found their residents still received the highest number of direct care hours per day, compared with inner regional and city residents.


“The passion and dedication of staff and management of these facilities is without question,” he said. “But the financial distress, the rising costs compared with lower facility incomes, and the challenges of attracting and retaining care professionals is putting regional care in danger.”


The StewartBrown survey indicated regional homes making a surplus relied on additional subsidy funding outside of the general Government Aged Care Funding Instrument (ACFI) subsidy and supplements.


The survey showed the rural and remote aged care cash loss increased in every mainland State over the past year.


The report found rural and remote homes face:

  • Smaller resident cohorts, with proportionally higher needs
  • Difficulty in attracting staff
  • Lower accommodation pricing
  • Higher food, consumables and maintenance costs


Mr Rooney acknowledged Aged Care Minister Richard Colbeck’s recent announcement of a $50 million aged care Business Improvement Fund (BIF), including a business assistance focus on rural and remote providers but is re-iterating calls for an extra $1.3 billion in operational funding over the next 18 months.


“There is something fundamentally wrong with Australia’s aged care funding levels, which are well below the OECD average,” he said.


“Unless we begin distributing more operational funding ahead of the Royal Commission report in November, the welfare of thousands of older people relying on aged care services in regional Australia is at risk.”


17 February 2020.