Aged Care Policy

In 2014 Australia’s aged care sector was reformed under the Living Longer, Living Better Bill. Broadly speaking, the changes reflected the recommendations of the Productivity Commission’s 2011 report ‘Caring for Older Australians’, which identified growing demand for aged care services, cost increases, workforce issues and higher expectations around quality as major issues to be addressed. The Living Longer Living Better reforms consolidated governmental responsibility for residential and home care and restructured the funding models for each. The Aged Care Standards and Accreditation Agency as well as the Aged Care Complaints Scheme were dissolved and replaced with the Australian Aged Care Quality Agency and Aged Care Complaints Commissioner, both of which are separate from the Department of Social Services who deliver funding and policy. The separation of responsibility for funding, quality monitoring and complaints management was a welcome move.

The Living Longer, Living Better reforms also brought about a shift to consumer directed care. Under consumer directed care, government subsidies for aged care services follow the individual care recipient, rather than being allocated directly to the provider. The idea is that people who need aged care will ‘shop around’ for the provider that is best able to meet their needs, which in turn incentivises aged care providers to improve the quality of services on offer so as to retain their share of the market.

Funding for residential aged care

The Australian Government subsidises a significant proportion of residential aged care costs, with care recipients making co-contributions on a means-tested basis. All care recipients are required to pay a basic daily fee, based on the equivalent of 85% of the Age Pension, to cover the cost of delivering care. Care recipients can then be asked to pay an additional means-tested care fee and a contribution towards accommodation costs.

Aged care homes can collect accommodation contributions either as a lump sum, referred to as a Refundable Accommodation Deposit (RAD) or through a Daily Accommodation Payment (DAP), which is fully retained by the home. Aged care homes invest the RAD bonds and use the return amount to fund capital costs associated with housing care recipients. The current average RAD bond is $365,000 and they are generally financed through the sale of the care recipient’s home.

The aged care sector has long been calling for a substantial increase in Australian Government Funding for residential aged care, with several formal inquiries and reviews focussing on this issue. These inquiries and reviews have looked at the issue of funding in the absence of cost-and-quality benchmarks, assuming that currently the quality of aged care is adequate. However, this is not the case and given the current accreditation and compliance processes, it can be argued that Australians have no means of gauging the quality of care being provided and whether or not it represents value for money.

The Productivity Commission’s report ‘Caring for Older Australians’, which informed the ‘Living Longer, Living Better’ reforms, recommended increasing the financial contributions of care recipients. It recommended that care recipients should be required to use the equity in their home either through sale or through a reverse mortgage.

CPSA’s position:

  • CPSA is fundamentally opposed to forcing people who have no other assets to sell or reverse mortgage their home to pay for residential aged care. Their home is all they have got and it is something they have worked long and hard for
  • A long term sustainable funding model for aged care must be developed to ensure sufficient funds to cover the growing costs of delivering services to an ageing population
  • An independent analysis must be carried out to evaluate the costs of providing aged care, with a view to setting benchmarks for aged care subsidies. If it is demonstrated that the aged care sector is underfunded, CPSA supports the adoption of an insurance scheme similar to the National Disability Insurance Scheme.

Accreditation and quality monitoring

The Australian Aged Care Quality Agency (AACQA) is responsible for the accreditation of aged care providers and ongoing assessment of their compliance with the standards set out in the Quality of Care Principles 2014. Once a provider is accredited, they are subject to a review against the standards every 3 to 5 years, unless AACQA is alerted to a potential problem. Providers are told well in advance of an AACQA inspection and have time to prepare for audits. Homes are also subject to random unannounced site inspections, though only during business hours and these inspections do not include a full review of compliance against the care standards.

The standards set out in the Quality of Care Principles 2014 focus on the administrative and operational systems in place to deliver quality aged care. This means that auditor's look at documents, rather than actual care outcomes for recipients. Where systems and processes are in place, an aged care provider will receive a tick. Where providers fall short, they can be sanctioned. There have been numerous cases where recently audited aged care homes have come to public attention as a result of incidents caused by serious neglect or systemic misconduct.

CPSA’s position:

  • Continued accreditation of nursing homes and compliance monitoring of nursing homes’ performance should focus on outcomes: that is the wellness and wellbeing of residents rather than on processes such as administrative and operational systems
  • The Quality of Care Principles 2014 must be rewritten to focus on care outcomes and must incorporate objective clinical indicators.


The Aged Care Complaints Commissioner is charged with investigating complaints against government funded aged care providers. This can include concerns from care recipients, their carers and relatives related to the care provided, the care environment, suspected abuse, communication issues, catering and safety. However, the Aged Care Complaints Commissioner is limited in that it can only investigate issues retrospectively, once they have occurred. The Commissioner also requires that complainants attempt to resolve the complaint with the aged care provider before they can launch an investigation. This means that the Commissioner is not able to address systemic issues or operate in a proactive manner to minimise the reasons for complaints. It is common practice to refer complaints to the relevant aged care provider for internal investigation and to notify providers of complaints investigated externally.

CPSA’s position:

  • The privacy of complainants must be respected, that is, aged care providers should not be notified of complaints made against them and complainants should not be required to raise complaints with the provider in the first instance, where the complaint relates to serious allegations of wrongdoing.


Consumer directed care relies on prospective aged care recipients evaluating all relevant information about the aged care services available to them before choosing the provider that best suits their needs. But there is a dearth of public information about aged care services and the majority of the information that is available is online. It is critical that the ‘consumers’ of aged care are able to access high quality, meaningful information about aged care service providers so that they can make an informed decision about their care. There is also quite often a discrepancy between the information available on the MyAgedCare website and what the provider is offering, particularly around the availability of respite and concessional beds.

CPSA’s position:

  • Up-to-date information about the services offered by aged care providers should be made publicly and readily available
  • The audited accounts of residential and home care providers should be made publicly and readily available, including where a decision is later overturned following improvements by the aged care provider
  • Government subsidies received by aged care providers should be acquitted against actual expenditure and this information should be made publicly and readily available
  • All information available online through MyAgedCare and other sites must be made available in paper form, for people who are not tech-savvy.


Adequate staffing levels and correct skill mixes improve care and quality of life outcomes for residents in homes. There are no minimum staff-to-resident ratios in aged care and the aged care standards simply require a home to have a "sufficient" number of staff on duty to deliver care.

The accreditation system relies on an auditor's own judgement of what is an appropriate staffing configuration. Many of these auditors have no clinical experience, which means they do not have the knowledge to assess the "sufficiency" of staffing arrangements. On top of this, the assessment of staffing levels is not directly linked to the care needs of residents. So while a home may be receiving funding to provide a high level of specialised nursing care to a group of residents, there are no checks to make sure that a nurse is rostered on at all times to deliver that care. Assessment of staffing levels involves in part looking at rosters and observing activity in the home during the visit. As there are no checks on homes at night, the only way to examine night staffing levels is to look at rosters and question staff about their workloads.

The wage gap between nurses working in hospitals and nurses working in aged care goes a long way in explaining why the aged care sector has trouble attracting nurses.

CPSA’s position:

  • Mandatory staff to resident ratios should be used in aged care facilities to ensure quality of care and lifestyle of residents are achieved and maintained. These staffing ratios should be directly related to the care needs of residents.
  • Inadequate remuneration for nurses working in aged care must be addressed.