Aged care providers should not be allowed to charge wealthy residents higher fees until they can demonstrate the money goes towards providing care, a former senior adviser to the royal commission has warned.
Industry lobbyists and one of the biggest aged care providers in Australia believe the change would help address a funding crisis in residential aged care, improve conditions and boost staffing levels.
The daily fees aged care facilities can charge are capped at $56.83, or $20,700 a year, for all Australians. This rate is fixed at 85% of the aged pension and adjusts to inflation twice a year.
Chris Mamarelis, the chief executive of New South Wales-based provider Whiddon, which has around 1,800 residential aged care residents in 21 locations, said current funding levels were unsustainable and would eventually lead to closures unless addressed.
“The current revenue streams that are flowing in do not cover our costs. There’s a significant shortfall and someone has to pick it up, surely our seniors deserve that,” Mamarelis said.
“Asking residents and their families to find the extra money and subsidise and cover the costs of aged care is a political challenge and that’s why the government needs to be brave about this.”
Mamarelis said recent changes to governance and board structures, along with new prudential and reporting requirements, would provide sufficient transparency to follow the flow of money generated from increased fees.
But Charles Maskell-Knight, who spent more than two decades as a senior public servant in the health department, said increased fees in the sector should not be allowed until “a much stronger regime is put in place to ensure the money is spent on care”.
Maskell-Knight said transparency had improved since the royal commission but cited two ongoing issues in the sector obscuring what government funds and resident fees were used for: a lack of financial disclosure by providers and payments to related parties.
Maskell-Knight said the royal commission exposed a large number of related party transactions, where money from aged care providers was transferred to beneficial operators or affiliated companies and could then be used for purposes other than aged care.
“Significant amounts of money were funnelled to the beneficial owner of the aged care provider, which meant it was very difficult to get a clear view of what the provider’s true financial state was,” Maskell-Knight said.
“I’ve got no reason to think that anything has changed.”
Earlier this week, Guardian Australia reported one of the country’s largest aged care providers, Blue Care, does not publish its own financial reports. Instead, its owner UnitingCare Queensland, details BlueCare’s revenue along with several other operations, including Lifeline and four hospitals.
Last financial year, UnitingCare Queensland transferred $25.7m to the Queensland Synod of the Uniting church. It also had $218.9m in deposits with Uniting Church Investment Services, a fund used to maximise returns for church initiatives. It is not clear whether that money came from government grants.
When asked whether any federal funds had been allocated to anything other than the delivery of aged care services, a UnitingCare Queensland spokesperson said all of its property, including residential aged care homes, was owned by the United church’s trust fund. The spokesperson said each year the Queensland Synod provided a range of services to UnitingCare Queensland, and the trust received fees from all activities of the church to support the work of all agencies owned by the trust.
It is not suggested UnitingCare Queensland has done anything illegal or unethical.
Anna Willis, a solicitor with advocacy group Aged Care Reform Now, said it still wasn’t clear whether government funds set aside to improve the quality of food in residential aged care were being spent appropriately.
“That was additional revenue given directly to providers, $10 per person, per day, and we’re still waiting to see the expense trail,” Willis said. “Some of the people who we’ve been communicating with have not seen any difference in the food. Where is the funding going?”
The aged care minister, Anika Wells, recently said the aged care sector had been “plagued by a decade of inadequate funding”. According to government figures, 66% of residential aged care providers recorded a loss in the final three months of 2022.
