Key outcomes of the ACCPA Financial Sustainability Summit 2023

Australia’s population is ageing. According to the Australian Institute of Health and Welfare, more than 4.2 million Australians are currently aged 65 or over, representing 16 per cent of the population. By 2066, that figure will climb to almost a quarter of the national population.

This inescapable reality means that demand for aged care services will continue to increase, while the proportion of the Australian working population decreases.

At the same time, chronic underfunding for aged care services has resulted in an unsustainable sector – negatively impacting the standard of care older Australians receive.

The Royal Commission into Aged Care Quality and Safety confirmed what has been known to many within the industry for decades: a poorly funded aged care sector compromises service delivery and results in substandard care.

Currently, the long-term financial viability of the sector is at risk with the majority of residential aged care facilities operating at a loss. As highlighted by the StewartBrown report in March, the viability of home and community care providers also continues to trend down, highlighting the unsustainability of current aged care funding. The way Australia funds aged care, which has remained relatively unchanged for decades, needs to be modernised.

The key question is how we balance the fairness of asking older Australians with financial means to make a greater financial contribution to their own care, against the fairness of asking a shrinking percentage of working-age Australians to fund a growing aged care system through their taxes.

To get input from the industry and stakeholders, the Aged and Community Care Providers Association (ACCPA) hosted a Summit at Old Parliament House, Canberra on 1 June 2023, as part of its contribution to the national conversation on the future sustainability of aged care. 

Forty-three organisations representing consumers, providers, unions, experts, government bodies and other interest groups, came together in a spirit of cooperation to discuss long-term policy solutions the Australian Government should consider. Following the views expressed at the Summit, combined with follow-up submissions, a subsequent Issues Paper identified ten principles for consideration in the design of a sustainable aged care system in Australia:

1. Independent and person-centred. Maintaining independence as we age is critical and can be central to a person’s identity and sense of self; many people wish to age in their own homes and community.

2. Efficient. Financing systems should be integrated across health and aged care and should consider efficiency in aged care delivery.

3. Transparent and specific. It should be clear who is paying for what in the aged care system.

4. Equitable. Every person in Australia should have access to high-quality aged care, regardless of their location, income or financial means.

5. Means-tested. Those with financial means should pay for or make a contribution to their accommodation and lifestyle expenses.

6. Flexible design for First Nations aged care. There should be an appropriate and tailored funding system for First Nations aged care.

7. Universal. The Government should continue to be the primary funder of care.

8. Future-focused. The aged care system should aim to support quality into the future, rather than maintaining the status quo.

9. Guaranteed. Service levels should be guaranteed, including for thin markets, which requires appropriately skilled and supported aged care workers.

10. Inter-generationally fair. Aged care funding should be designed for the long term, be predictable and be sustainable.

Australia needs to urgently modernise its aged care funding model. This is particularly critical given Australia’s population will progressively age over the next 20 years, and the parallel expectation in the community to improve the quality of care and supports older Australians receive. 

While funding alone will not solve all of the problems in aged care, the current financial situation makes solving those problems impossible.

As per Summit participant views, our Issues Paper proposes that the Australian Government continue to be the primary funder of care services – as they are for Australians throughout their lives through the NDIS, Medicare and the public health system.

People should not be treated differently simply because they are over the age of 65, regardless of whether they are still living in the community or in a residential aged care home. However, for those who can afford it, there should be consideration of increased consumer co-contributions in aged care for accommodation and lifestyle expenses, which people have funded throughout their lives.

We can no longer put off the structural reforms needed to ensure older Australians receive the care, dignity and quality of life they need.

Anne Liddell, Head of Policy,
Aged & Community Care Providers Association

To read the Issues, visit: www.accpa.asn.au

This article originally appeared on Aged Care Today Spring 2023 edition