Aged care accountancy firm StewartBrown has released its latest Aged Care Financial Performance Sector Report this week and among its findings, there was one statistic that stood out.
It’s not the headline figure that 64% of aged care homes are currently running at an operating loss – it’s that providers are increasingly relying on agency staff and overtime for existing staff to bridge gaps in their workforce.
Spending on agency staff has more than doubled from the same time last year – increasing by $9.86 per bed per day (from $7.18 pbpd) to $17.04 pbpd.
Based on our back-of-envelope calculations, that’s around $3 million a day on agency staff.
If we assume those numbers continue, that will amount to $1.1 billion over the course of a year.
For a sector that lost more than $850 million for the nine months ending March 2023 according to the survey findings, this is unacceptably high.
Speaking to providers for this week’s special Workforce issue of SATURDAY, the chronic workforce shortages that the sector has faced for years have reached a critical point.
While the 15% wage rise has seen a recent rise in applications to work in the sector – in part from the disability sector – the reality is it will take much more to build a sustainable aged care workforce where people want to work.
Time to ditch payroll tax for aged care providers?
So, is it time to consider a more radical approach?
The StewartBrown report outlines several measures aimed at providing additional incentives or benefits to aged care workers.
These include:
- Increasing the Fringe Benefits Tax exemption for aged care employees to a cap of $40,000 (the current cap of $30,000 has been in place since 1 April 2001 – that’s 22 years)
- Expanding the FBT exemption criteria to include all aged care workers, not just those employed by a public benevolent institution
- Allowing travel to work costs to be tax deductible for aged care workers (noting that many travel quite a distance to their place of employment)
- Providing a payroll tax supplement where applicable
As we reported last week, private Victorian provider TLC Healthcare and the Aged and Community Care Providers Association (ACCPA) have also been calling for exemptions for the aged care sector from the recent increases to payroll tax in the state.
Why not take this one step further and consider exemptions for all aged care providers?
Should the Aged Care Taskforce be examining measures like these to encourage more workers to the sector and reduce wage bills for providers?
Its Terms of Reference do include the option “to consider other related issues in the course of their work”.
Food for thought.
To read more about how some providers are attracting and retaining their workforce, check out this week’s issue of SATURDAY – subscribe here.