Increased spending on staff, particularly on Registered Nurses and agency costs due to the mandatory care minutes, are eroding the recent increases in Government funding to the aged care sector.

Back in May, aged care accountancy specialists StewartBrown warned that the introduction of mandated care minutes could erode gains from the increased AN-ACC funding (which came in from 1 October 2022) and FWC ruling (funding started to flow 1 July 2023).

Providers are telling The SOURCE that they are feeling the pinch from increased staffing costs due to the mandated care minutes, which came into effect on 1 October 2023 – last week.

Though their financial performance improved by about $40 per resident per day when AN-ACC was first introduced, Victorian retirement living and aged care provider Shepparton Villages’ Chief Executive Officer Veronica Jamison told The SOURCE, the mandatory 200 care minute targets will have a “negative financial impact” once the care minute reforms are fully implemented, particularly in relation to Registered Nurses.

The Not For Profit provider has three aged care homes set within Retirement Villages located in Shepparton, about 181km north of Melbourne.

“We are in the process of reviewing our rosters to help alleviate this issue,” Veronica said.

Shepparton Villages has yet to achieve its mandated care minute target.

“In particular, we don’t have enough RNs to meet the care minute requirements. We have had to use a lot of agency staff and are spending a lot more money in this area than we used to. This is contributing to our bottom line in a negative way,” Veronica said.

The SOURCE: The more positive financial results the residential care sector has seen in the past 12 months are now forecast to evaporate.