Leading Age Services Australia (LASA) CEO Sean Rooney says the Aged Care Funding Instrument (ACFI) indexation increase of 1.4% in the “Activities of Daily Living” and “Behaviour” domains and 0.7% increase in “Complex Health Care” is “totally inadequate”.

The Government is “oblivious to the true costs of aged care. This rise does not even come close to the consumer price index for health, which has been estimated to be over 4 per cent and comes on top of successive minimum wage rises of 3 per cent and 3.5 per cent in July 2017 and July 2018,” he said.

Mr Rooney says the rise is only a third of what is required for aged care providers to keep up with rising costs, let alone expand their services to meet growing demand.

His comments have been backed by Aged & Community Services Australia CEO Pat Sparrow, who says StewartBrown has found there has been an increase in care labour costs of 4 per cent since June 2017 – over half due to additional costs and hours worked in both care management and allied health staffing.

“The StewartBrown data also shows there are declining results for Home Care Package (HCP) providers making level 1 and 2 HCPS very marginal and today’s indexation announcement of 1.4 per cent just does not keep up with increasing costs of care delivery”, she says.

“Despite ongoing data and evidence from industry experts and recent independent reviews finding that Australia’s aged care system is under-funded, there is no plan to address this situation,” Mr Rooney added.

LASA wants an immediate 4% funding indexation increase or about $470 million across the sector.

Will it happen? Given the recent boost to home care, we aren’t placing bets yet.