Was aged care featured prominently enough in the budget?

June 11, 2014 | Aged Care Management

Ever since the 2014-15 budget was released last month, industry bodies from a variety of sectors have voiced their concerns at the changes, and the effects they’ll have over the next few years. Aged care was one such sector to receive alterations.

Now that the dust has settled, it’s important to assess the thoughts of various industry bodies and what impacts the changes are likely to have in the near future.

Moving aged care

This was the first budget since aged care had been moved from the Department of Health to the Department of Social Services, a substantial change undertaken last year.

Ceasing of the Aged Care Payroll Tax Supplement

Arguably the biggest change of the budget, ceasing this supplement from January 1 2015 is likely to have significant ramifications in the industry. Currently, the supplement is paid to private residential care providers who are required to pay state governments payroll taxes, unlike not-for-profit providers.

According to a release from the government, the change is necessary in order to reduce impacts on the budget.

“[By doing so it] will remove an indirect transfer payment from the Commonwealth to states, saving the Budget around $653 million over the next four years,” a spokesperson said.

Understandably, providers have opposed this change. CEO of the Council of the Ageing (COTA), explained the negative impacts it will have on both providers and residents.

“The change will see aged care providers pass on more than $650 million to consumers over the next four years in higher accommodation charges,” explained Mr Yates.

Increased funding

Funding has also been redirected to provide $1.5 billion over the next five years to increase aged care subsidies. Residential, home care and flexible care providers will see basic subsidiaries increased by 2.4 per cent from July 1 2014.

Understanding the budget can help facilities to plan accordingly for the future, and put appropriate plans in place.