Government data shows residential aged care providers in 'turmoil'

Documents obtained under freedom of information laws by Canberra actuary Dr Richard Cumpston show of about 880 anonymised facilities, nearly 390 saw losses in the 2017-18 financial year.

A further five broke even across all areas, while nearly 55 per cent of about 350 regional-only providers ended the year with more spent than gained. The worst-affected claimed it was an average of nearly $500,000 out of pocket for each of its residents, although that could include non-operating costs, which were non-recurrent.

Others at the high end of the scale reported gaps of more than $300,000, $200,000 and $100,000 between their average spend on residents and the income each garnered.

Canberra Aged Care Facility director Clayton Hutchinson said the industry was "in a state of turmoil".

"We're all holding our breath for more funding, and just waiting for the government to act.

"In the last year, we've seen 90 providers leave the industry. That's becoming commonplace."

The data for all facilities reflects accountancy firm Stewart Brown's findings in March 2019, which showed 45 per cent were running at a loss. The figure increased to 67 per cent for regional providers, although the government's dataset was a "high level view" based on the total number of beds, rather than actual occupancy.

Stewart Brown excluded non-operating income.

Peak aged care body Leading Age Services Australia is lobbying the government to inject $1.3 billion into the residential care sector over the next 18 months to ensure its viability.

The financial constraint on providers was seeing them struggle to deliver residents' needs, chief executive Sean Rooney said. The data showed the government had not kept pace with rising operational costs.

"This data suggests that some providers are under particularly severe pressure," Mr Rooney said.

"Our members are telling us they will be forced to withdraw services, cut jobs and reduce investment unless the government takes action to address [this]."

The demands on providers had increased with the introduction of new standards in June, Mr Hutchinson said. His family, who had owned Canberra Aged Care Facility for 32 years, were forced to sell their $2.8 million farm to keep up with costs.

Mr Hutchinson was in the process of clearing a notice of non-compliance.

"This year we have had a deserved staff pay increase of 3 per cent but the funding did not even keep up with the staff costs - let alone the added strain of more services under the new standards," he said.

"The royal commission has been extended [until November 2020] and the government has already alluded to the fact that they're not going to change much until after it is finished.

"We will make it through until the end of the royal commission because we had assets to sell, but we're definitely not making ends meet and we refuse to cut services."

Minister for Aged Care Richard Colbeck said the government was increasing annual spending on aged care from $20.5 billion in 2018-19, to $25.4 billion by 2022-23.

"Supporting a sustainable, high-quality aged care sector is a priority for the government," he said.

The Canberra Times