The first month review (July) of the new Aged care Funding Instrument (ACFI) program has demonstrated an increase in funding, says the Ageing Minister, Mark Butler (pictured). His figures indicate a rise from $8.8B in 2011/12 to $9.1B in 2012/13 – a 3.4% increase.

However both Aged Care Services Association and Leading Aged Services Australia are represented on the Government’s ACFI Monitoring Group and have immediately hit back, saying real aged care funding has actually dropped $2.21 per bed per day or $140M a year.

Gerard Mansour of Leading Aged Services Australia points to two key changes:

1. The base was lowered by 1.6% before the Government indexation was applied – effectively cancelling out an increase

2. Changes have been made to the scoring for Activities of Daily Living (ADL) and Complex Health Care (CHC) for new residents – meaning they receive less for the same service than existing residents

The fact is that even a 3.4% increase doesn’t satisfy the increasing number of people seeking aged care at a later and more intensive health support stage in their life, meaning higher average costs. Additionally there was a 2.9% minimum wage rise in July plus utilities. With 160,000 frail Australians in aged care, the $8.8B budget is $50,000 per head per year for 24/7 aged care and low and high care accommodation. That is the challenge.