A System That Doesn’t Work for Those Who Need It Most
Australia’s aged care system has undergone substantial reform in recent years, with the introduction of the Support at Home program marking a significant shift in how in-home care services are funded and delivered. While the program aims to provide a range of services for elderly Australians, a new and troubling aspect has emerged: pensioners will now be required to contribute towards the cost of their independence and everyday care needs, 5% and 17.5% respectively for full pensioners and between 5-50% and 17-80% for part pensioners. This change, along with the significant reduction in care management fees (down from 35% to 10%) for service provider overhead coverage, raises serious concerns about the future accessibility and sustainability of aged care for those who need it most, particularly for vulnerable groups such as pensioners and Aboriginal and Torres Strait Islander peoples.
A Shift in Financial Responsibility
Previously, the aged care system, especially for pensioners, was largely government-funded, allowing those on fixed incomes to access the care they needed without significant financial strain. However, the Support at Home program introduces a new model in which pensioners are expected to contribute to the cost of their care. While allied health services (like physiotherapy, occupational therapy, podiatry and speech therapy) will remain fully covered by the government, many other essential daily living and care services will now require financial contributions from pensioners, a change that could have dire consequences for those on an already limited budgets.
The Australian Government’s Aged Care Reforms, specifically within the Support at Home program, aim to introduce “user pays” components for care similar to their residential care counterparts, where individuals are expected to pay a portion of the costs depending on their financial capacity. According to the Aged Care Reforms Guidelines, this system is designed to ensure that those who can afford to contribute help maintain the program’s sustainability. However, evidence suggests that many pensioners struggle with the cost of living, particularly in the face of rising inflation and stagnant pension rates. The Australian Institute of Health and Welfare (AIHW) reports that more than 30% of older Australians live on incomes below the poverty line, making it clear that many may not have the financial means to meet these additional costs (AIHW, 2022).
Pensioners, already struggling to make ends meet on a fixed income, may find it increasingly difficult to afford these additional costs. For many, this contribution will not be a manageable expense, leading to the possibility that they will either delay or completely forgo the care they so desperately need. This not only compromises their health and well-being but could also increase the burden on hospitals and emergency services as people are forced to seek more intensive and expensive care when their needs go unmet.
The Risk of Unmet Care Needs
With many pensioners already living with financial insecurity, the requirement to contribute towards their everyday care needs could make access to essential services an unattainable luxury. The cost of basic care – whether it’s personal hygiene assistance, home help, or nursing services – could force individuals to make difficult decisions about where to allocate their limited funds. Will they choose to pay for food and medication, or will they try to scrape together enough to meet the costs of their home care?
The Australian Aged Care Quality Standards, outlined in the Support at Home Program Guidelines, state that care must be person-cantered and delivered in a way that ensures dignity and respect for individuals. If pensioners are unable to afford care, it risks undermining this principle, leading to deteriorating health, greater reliance on hospital emergency departments, and increasing healthcare costs in the long term. Evidence from the Australian Bureau of Statistics (ABS, 2021) suggests that as healthcare costs rise, seniors are increasingly forced to choose between essential services and their health needs, which can result in avoidable hospital admissions due to untreated conditions.
Disproportionate Impact on Aboriginal and Torres Strait Islander Communities
The introduction of these cost-sharing arrangements is particularly concerning for Aboriginal and Torres Strait Islander peoples, who already face significant disparities in access to healthcare. Indigenous communities, especially those in remote areas, experience higher rates of chronic illness and lower life expectancy, and they often struggle to access services due to geographical isolation. With fewer healthcare resources available in these communities, the new Support at Home program may be a further blow to already limited services.
Research by the Australian Indigenous Health InfoNet (2020) shows that Indigenous Australians have lower access to in-home care services compared to their non-Indigenous counterparts, and those in rural or remote areas often experience longer waiting times and fewer service options. The Support at Home program’s introduction of financial contributions could compound these barriers, making it even more difficult for these communities to access the support they need.
According to Aged Care Reforms Guidelines, the program’s design includes a focus on equity, which is essential to ensuring that people in underserved communities are not left behind. However, given the existing geographical, financial, and systemic barriers, it remains to be seen whether these reforms will truly address the needs of vulnerable populations, including Indigenous Australians. The Australian Medical Association (AMA) has highlighted that the gap in health outcomes for Aboriginal and Torres Strait Islander peoples is widening due to insufficient healthcare access, and introducing financial contributions into the equation could further entrench these inequities.
Impact on Service Providers and the Financial Strain
In addition to the challenges facing pensioners and indigenous Australians, there are growing concerns about the financial viability of service providers under the new program. Previously, aged care providers could charge up to 35% in overhead-administration fees to cover the costs of their operations. However, the new reforms cap this fee at just 10%, a drastic reduction that could threaten the financial sustainability of many service providers, small and larger organizations.
The Australian Government’s Aged Care Reforms are aimed at increasing competition and transparency in the sector which seems like a juxtaposition given that the significant legislative requirements under the Aged Care Act and Quality & Safeguards Commission demand ever increasing financial resources to enable an organisation to meet the standards whilst equally the provider is hamstrung in managing these costs due to industry financial regulation and capping. According to a 2022 report by The Aged Care Industry Association, the reduction in administration fees is likely to increase operational pressure on providers, especially those servicing remote areas, where logistical challenges already make service delivery more expensive. As a result, providers may have to cut back on essential services or reduce staff hours, further reducing the availability of care for pensioners in need.
How are providers expected to provide high quality care, when and where it is needed with inadequate government financial backing to make it possible. In the most recent Stewart Brown Industry Report (Q4 2024) there is evidence to suggest that the residential care sector is only just turning around financially after significant periods of time being crippled by the beating served out by sector wage increases, mandated staffing requirements, significant changes to the bond fee structure and reduced government funding for basic care service delivery. The home care sector seems to be doomed to potentially suffer a similar fate under the new Support at Home program.
Looking Ahead: The Need for a Fairer System
While the Support at Home program may have good intentions, it risks creating a two-tiered system where only those with the financial means to contribute can access high-quality, consistent care. For the elderly living on a pension, this contribution could place their basic needs – such as food and rent – in direct competition with their healthcare needs. Without affordable access to care, many pensioners will face increasingly severe consequences, from deteriorating health to isolation and dependency.
As the Support at Home program is rolled out, it will be important for the government to monitor its effects on vulnerable groups. While the reduction in service provider overhead fees and the cost-sharing model may sound like cost-saving measures on paper, they could ultimately result in fewer services, lower quality care, less providers in the sector and greater health disparities.
Pensioners, particularly those in disadvantaged communities, deserve a system that prioritizes their well-being over financial burdens. The Support at Home program needs to be adjusted to ensure that the most vulnerable Australians are not left behind. This may include re-evaluating the cost-sharing arrangements, providing additional subsidies for those who cannot afford to contribute, and ensuring that Indigenous communities, who already face significant barriers to healthcare, have equitable access to aged care services.
In its current form, the Support at Home program risks leaving behind those who need care the most. Without adequate support, pensioners and Indigenous Australians may find themselves with fewer options, forced to navigate a system that doesn’t work for them.
