The aged care sector has welcomed a 1.8 per cent government funding increase, after years of enduring increases of around one per cent. However, the increase won’t be a silver bullet for many providers who are struggling to meet the costs of running their facility.

The funding increase was the main outcome of the 2017/2018 Age-Related Residential Care (ARRC) and Age-Related Hospital Specialised Services (ARHSS) agreements.

“This is the biggest increase the sector has received in the past four years,” says New Zealand Aged Care Association (NZACA) chief executive Simon Wallace.

“While it won’t address the fact that funding has fallen behind historically, it is recognition by the government that funding needs to be increased.”

The 1.8 per cent increase in fees will apply to the bed day rates from 1 July 2017. This is in addition to the extra funding relating to the pay equity settlement, which also begins 1 July this year.

Forsyth Barr broker Lyn Howe describes says the pay increase for care givers as “complex”.

“The 1.8% lift in broader funding will help if there is any initial funding shortfall for some operators,” she told Otago Daily Times.

While the extra funding is welcomed by the sector, Wallace says there will still be smaller providers that will still struggle in spite of the increase.

“It is too early to tell whether this will cover all their costs. This won’t be a panacea for them,” he says.

Aged care providers have also secured $1 million in funding to relieve the increasing costs of non-emergency ambulance transport, which have become a contentious issue for the sector in the last few years. The principles and parameters for how this funding is allocated is yet to be decided, says Wallace.

The ARRC agreement has also resulted in a cost-sharing arrangement for bariatric equipment. Again, the finer detail is yet to emerge, but providers will welcome agreement on this issue, as many have struggled for years with the costs related to sourcing this equipment.

Funding has also been granted for the aged care funding model review, although the amount has not been disclosed. The review is due to happen over the next year, with involvement from aged care providers, consumer advocacy groups, District Health Boards and the Ministry of Health.

Wallace says the investment in the funding model review, the pay equity settlement and the increase in funding all indicate that the Government is starting to acknowledge the importance of the sector.


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