Aged care

Budget Review 2015–16 Index

Alex Grove

This Budget introduces significant aged care policy changes, particularly for home care. The home care changes come with new implementation funding, but there are a number of savings measures in other related areas. This reflects the Assistant Minister’s commitment to continue with aged care reform while ensuring ‘sustainability in terms of taxpayer dollars’.[1]

Changes to aged care in the home

The most significant new measure is $73.7 million over four years to allocate Commonwealth funded Home Care Packages (HCPs) directly to consumers, rather than to providers as is currently the case.[2] HCPs provide individually tailored care and support services to help older people remain in their own homes,[3] at an estimated cost of $7.5 billion to the Government over the next four years.[4] A certain number of HCPs are funded within each aged care planning region according to the aged care provision ratio.[5] Home care providers currently compete for an allocation of packages through the Aged Care Approvals Round (ACAR), which they then offer to eligible consumers.[6]

Under this measure, from 1 February 2017 packages within each region will be prioritised and allocated directly to eligible consumers by My Aged Care Gateway.[7] Funding for each package will be paid to the approved provider selected by the consumer.[8] The measure is intended to increase competition and improve service delivery through increased choice for consumers, including the flexibility to change providers if they wish. It is also meant to reduce ‘red tape’ for providers who will no longer have to compete in the ACAR for home care places.[9]

A related measure, which has been announced but has not been funded in the Budget, is to explore options for combining HCPs and the Commonwealth Home Support Programme (CHSP) from 2018.[10] The CHSP is an entry-level home support program that commences on 1 July 2015 and replaces a number of existing programs including the Commonwealth Home and Community Care (HACC) Program.[11] Combining HCPs and the CHSP is intended to ‘make the aged care system easier for consumers to understand and further reduce regulation and red tape for providers.’[12]

These changes are in keeping with the Productivity Commission’s 2011 recommendation for a system of aged care entitlements in which ‘[i]ndividuals should be given an option to choose an approved provider or providers’,[13] and were foreshadowed by the Assistant Minister in a key speech last November.[14]


The reaction to the proposed home care changes has generally been positive. Catholic Health Australia (CHA) has welcomed the HCP changes as a first step towards ‘a consumer-driven aged care system’, while noting that the integration of HCPs and the CHSP may leave some service providers ‘alarmed at the prospect for yet further change.’[15] COTA Australia (formerly Council on the Ageing) believes the changes will lead to older Australians receiving better services, allowing them to remain in their homes for longer.[16] Aged & Community Services Australia (ACSA), however, cautions that ‘strong supports and safety nets’ for disadvantaged older Australians should be maintained as the system changes.[17]

Savings measures

A number of other policy measures in the Budget are forecast to produce small savings. These include:

  • An increase in short term restorative care places (currently called transition care places) to help rehabilitate older Australians and reduce premature admissions to permanent residential care.[18] This measure is anticipated to save $56.2 million over four years as the places will be included in the aged care provision ratio at the expense of an equivalent number of permanent residential places.[19]
  • Moving the Aged Care Complaints Scheme from the Department of Social Services (DSS) to the Aged Care Commissioner from 1 January 2016, for an estimated saving of $2.8 million over four years.[20] This is in keeping with the Productivity Commission’s recommendation that consumer complaints should be handled by an independent agency,[21] and has been welcomed by COTA who has ‘long called for a more independent complaints scheme’.[22]
  • Charging most residential aged care providers the full cost of accreditation services undertaken by the Aged Care Quality Agency, including site audits and unannounced visits,[23] for a projected saving of $30.7 million over four years.[24] The longer term aim is to move towards private market provision of accreditation services for aged care providers.[25]
  • Including rental income in the aged care means test for residents who rent out their former home and pay their accommodation costs by periodic payment, saving $26.2 million over five years.[26]

Cuts have been made to two program funds: $20.1 million over four years to the Aged Care Service Improvement and Healthy Ageing Grants (ACSIHAG) Fund and $40.2 million over four years to the Aged Care Workforce Fund (ACWF).[27] The latter cut has been described by ACSA as ‘poor policy when 55,770 additional [aged care] employees are required over the next eight years’.[28] As promised, the $54.5 million that was cut when the Dementia and Severe Behaviour Supplement for residential care providers was ceased on 31 July 2014[29] has been restored as funding to establish Severe Behaviour Response Teams.[30]

In this Budget, the Government is continuing with reforms intended to produce a consumer-led market for aged care, but also pursuing savings opportunities where possible.

[1].          M Fifield (Assistant Minister for Social Services), Senator the Hon Mitch Fifield address to the CALD Cultural Diversity in Ageing 2014 Conference with Senator the Hon Fierravanti-Wells, media release, 12 June 2014.

[2].          Australian Government, Budget measures: budget paper no. 2: 2015–16, p. 147.

[3].          Department of Social Services (DSS), ‘Home Care Packages’, DSS website.

[4].          S Morrison (Minister for Social Services) and M Fifield (Assistant Minister for Social Services), Supporting greater choice for older Australians, media release, 12 May 2015.

[5].          Australian Government, ‘3.3.2 How does the Commonwealth Plan its Allocation of Places?’, Guides to Social Policy Law website.

[6].          Budget measures: budget paper no. 2: 2015–16, op. cit., p. 147.

[7].          Ibid. My Aged Care Gateway currently comprises the My Aged Care website and national phone centre which assist clients to access aged care information and services. DSS, ‘My Aged Care’, DSS website.

[8].          DSS, Increasing choice for older Australians, Budget fact sheet, DSS, 2015.

[9].          Ibid.

[10].       Australian Government, Portfolio budget statements 2015–16: budget related paper no. 1.15A: Social Services Portfolio, p. 113.

[11].       DSS, ‘Commonwealth Home Support Programme’, DSS website.

[12].       Portfolio budget statements 2015–16: Social Services Portfolio, op. cit., p. 113.

[13].       Productivity Commission, Caring for Older Australians, vol. 2, Productivity Commission, Canberra, 2011, p. 173.

[14].       M Fifield (Assistant Minister for Social Services), The economics of aged care: Speech to the Committee for Economic Development (CEDA), media release, 11 November 2014.

[15].       Catholic Health Australia (CHA), ‘2015 Budget ushers in welcome next steps in aged care reform’, CHA website, 13 May 2015.

[16].       COTA Australia, Budget 2015: Next big step in aged care revolution, media release, 12 May 2015.

[17].       Aged & Community Services Australia (ACSA), Budget slices aged care worker benefit while Government lays path for changes, media release, 12 May 2015.

[18].       Budget measures: budget paper no. 2: 2015–16, op. cit., p. 147.

[19].       DSS, Expansion of flexible care initiatives, 2015 Budget fact sheet, DSS, 2015.

[20].       Budget measures: budget paper no. 2: 2015–16, op. cit., p. 148.

[21].       Productivity Commission, op. cit., p. 422.

[22].       COTA Australia, op. cit.

[23].       DSS, Aged Care Quality Agency, 2015 Budget fact sheet, DSS, 2015.

[24].       Budget measures: budget paper no. 2: 2015–16, op. cit., p. 149.

[25].       DSS, Aged Care Quality Agency, op. cit.

[26].       Budget measures: budget paper no. 2: 2015–16, op. cit., p. 146.

[27].       Ibid, pp. 148, 151.

[28].       Aged & Community Services Australia (ACSA), op. cit.

[29].       M Fifield (Assistant Minister for Social Services), More support for people with severe symptoms of dementia in aged care, media release, 4 February 2015.

[30].       Budget measures: budget paper no. 2: 2015–16, op. cit., p. 169.


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