Navigating the impact of aged care package changes 👵🚧🛣️
As of June 30, a historic wage increase for most aged care workers and nurses has come into effect. This significant wage hike is a welcome development in a sector that has long grappled with severe staff shortages. The primary goal of this pay increase is to retain existing workers and, ideally, attract new talent to the field. However, the exact implications of this wage rise for the thousands of individuals receiving government-subsidised home care packages remain somewhat unclear.
Home care workers are now entitled to a 15 percent pay increase starting from June 30. While the government has partially offset this wage hike with an increase in home care subsidies linked to these packages, there are still unanswered questions about how this will affect package recipients. In an unexpected communication from the Minister for Aged Care, Anika Wells, recipients of these packages have been cautioned to anticipate an increase in costs from their providers.
While the government is covering the wage increase, it does not include other associated staff expenses, including superannuation payments for workers. Additionally, Wells anticipates that there will be necessary business overheads such as fuel, marketing, and administration costs, which may need to be passed on to package recipients.
Ironically, the consequence of such increases is that fewer care hours are covered by the home care package. In order to deliver the same services and number of service hours that a person may have previously received, the daily subsidies for home care packages will see an 11.9 percent increase starting from July 1.
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In terms of annual dollar amounts, the changes are as follows: a level one package will increase from about $9179 a year to $10,271; a level two package will increase from $16,148 a year to $18,063 a year; a level three package will increase from about $35,139 to about $39,310 a year; and a level four package will be $59,594 a year, up from $53,268. It’s important to note that these figures are before considering income-tested contributions, package provider administration fees, or case/care management charges, all of which are now capped.
Wells notes that these subsidy increases were calculated based on the amounts providers spent in 2021-22 on aged care workers and what was needed to ensure clients continued to receive the same hours of care starting July 1. The calculations also take into account that some care recipients use their home care subsidy for goods, equipment, home modifications, and allied health services, which are unaffected by the wage increase.
If package recipients are dissatisfied with the level of service or the charges associated with their home care package, they have the freedom to switch providers at no cost, at any time.
However, it is essential to recognise that many home care packages often fall short of covering a person’s care needs in their own home. This leaves individuals with the difficult choice of either paying for additional care privately (provided they can find and hire care workers) or transitioning into residential care.
For those on the highest package (level four), providers may be able to apply to the government to cover any financial gap in costs. If you are on a level 1-3 home care package and you are utilizing your entire budget on nursing and personal care, you may require a reassessment. Your provider can guide you through the process and determine if you need a reassessment by the Aged Care Assessment Team.
Another option for individuals looking to get better value from their package is to self-manage it. This means paying lower fees and negotiating pay rates directly with the care workers they hire themselves. However, it’s worth noting that self-management may still require recipients to appoint a provider, which should not be charging more than the government-capped 15 percent of the package in administration fees.
Fortunately, the current home care system is under review, and the proposed Support at Home program is part of the responsibility of the recently established aged care task force. This task force is actively addressing various residential care issues with a focus on achieving faster solutions.
The Support at Home program, initially scheduled for a July 2025 start date, means that providers and package recipients, as well as existing and new workers, will continue to work with a system that does not fully meet the needs of aging Australians or care providers.
In the realm of residential care, the 15 percent wage increase for nurses, carers, activities officers, and cooks is a critical component of meeting the government’s previously established minimum staffing standards and care minutes, all of which have become requirements this year.
Retaining existing staff, including vital roles such as administration, maintenance, and kitchen staff, who did not receive the special wage increase, remains a continuous challenge for facilities.
According to the UTS Ageing Research Collaborative (UARC) half-yearly report on the aged care sector, only one in 10 residential aged care homes surveyed currently have adequate direct care staff to meet the new 24/7 registered nurse requirements and mandatory care minute targets.
UARC estimates that an additional 12,520 full-time equivalent workers will be needed to meet the new standards, including 5911 registered nurses.
Starting from July 1, the minimum standard mandates that a registered nurse must be on-site and on duty 24 hours a day.
