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Local governments are being pushed out of aged care. But at what cost?

  • 05 April 2022
Due to media focus on cases of abuse and COVID-19 deaths in nursing homes, residential aged care has received a lot more attention than in-home aged care. This is despite the critical importance of in-home services — such as showering, toileting, cleaning, cooking, delivery of meals and home maintenance — for preserving their independence of elderly people and keeping them out of residential facilities. More than one million older Australians receive home support services — far more than the roughly 300,000 living in nursing homes.

Like the aged care sector more broadly, home care is in the process of transition as the federal government implements a system designed around the principles of consumer choice and efficiency.

The efficiency push is driven by expectations that the number of Australians accessing aged care services will more than triple by 2050. Simultaneously, the federal government is under pressure to improve the quality of aged care services in response to the damning findings of the Royal Commission into Aged Care Quality and Standards.

Caught between these conflicting objectives are Victorian local councils, where a long-term partnership with the Federal government has been undermined by the process of reform. Since the 1980s — and to some extent even earlier — Victorian local councils have played a central role as providers of in-home aged care.  In 2019, Victoria had more than twice the number of local councils providing aged care than any other state. The majority of the money has always come from the Federal government, but there was an understanding that councils had the local knowledge and connections to best deliver the services.

Under the long-established ‘block funding’ model, the Federal government gave local councils a set amount of money — based on how many elderly people needed support — and the councils decided how to spend it. However, block funding is being supplanted by a new consumer-directed model, under which clients are allocated a set amount of money and then choose among a selection of competing providers. At the moment, both models are run side-by-side, with block funding delivered through the Commonwealth Home Support Program and client-directed funding through Home Care Packages. The Federal government has announced that by June 2023, the two programs will be rolled into one. Although it hasn’t released the technical design of the program, it is widely believed that funding will be largely consumer-directed and based on regulated market competition.

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