Daniel Aitchison, CEO of Palm Lake Care, said the fact there is a delay in the Stage 3 pay rise to aged care workers, that the new financial mechanism for aged care remains unknown, and the new care minute requirement in October, means it is impossible to fully budget for FY25.
"We will leave the Budget for the next year as late as possible and will probably complete around 90% of it as we still have so many unknowns. The main cost of course is the wages of the workforce," Daniel said.
He admitted it was easier at Palm Lake Care, a privately-run company, than at a Not For Profit or ASX-listed Regis with its financial committees, with the Budget to be then decided at Board level.
"We only received very late on this year how we should pay the Stage 2 interim award, in terms of the fact that most staff were already paid above the award. I think it will be the same this year whenever we are told how the new pay rise is to be treated. Then we don't know what the Independent Health and Aged Care Pricing Authority (IHACPA) will decide.
"We also have to prepare a budget factoring in the care minutes for October. You just put your hand into the wind and guess."
Chris Mamarelis (pictured), CEO of Not For Profit Whiddon Group, said forward planning in aged care has always been challenging.
"Our expectation is that we will begin to see the Taskforce reforms crystallise through the May Budget. The Government commissioned the Aged Care Taskforce, and it was Chaired by its own Minister for Aged Care – now we need action. An endorsement of the Taskforce Recommendations, through the May Budget, will lay the foundation for future funding certainty.
"With this said, we still require a response from the Fair Work Commission, regarding the outstanding Stage 3 Work Value Case decision. Additionally, we also need more time to gain confidence that the annual IHACPA indexation recommendations will continue to be embraced by Government, and flow through to the sector. There is still work to do in terms of regional aged care and this extends beyond the operational challenges to capital investment strategies and the development of new approaches to care delivery.
"While we are feeling a greater level of confidence about the future due to initial funding improvements, residential aged care requires a sustainable pathway - and this lies within the Taskforce recommendations. We now need a brave Government who are prepared to take this next critical step along the reform journey."
Direct care workers in residential aged care and home care are to receive a further 13.5% pay rise, the Fair Work Commission announced in its Stage 3 decision of the Aged Care Work Value Case in 15 March 2024.
Indirect care workers, who have not received a pay rise yet under the Work Value Case will receive 6.8% in total. 240,000 direct care workers received an interim 15% increase in November 2022.
The Federal Government wants to pay 50% of the increase from 1 January 2025 with the second 50% to commence on 1 January 2026.
From 1 October 2024, mandatory care minutes will increase to an average of 215 minutes of care, including 44 minutes from a Registered Nurse.
