Media release from NZ Aged Care Association

Understanding the Governments Latest Announcements on Aged Care Funding Increases

Today the National Government announced some pre budget funding increases for the aged residential care sector.  These were:

 “$12 million increase in funding for dementia bed subsidies over four years, to encourage further investment in dementia beds”.

 The $12 million increase in dementia care over four years equates to a yearly increase of $3 million across 20 DHBs.  In terms of the daily entitlement for the elderly it represents a 2.51% increase in dementia care funding which is currently around $150 per day gst exclusive.

 Including the 0.89% increase funded out of the $33.2 million over four years, this means the total increase in the dementia rate as of 1 July is 3.4%

 “This is another good increase in the dementia rate and means the underfunding of this service has reduced from about 36% to 17% in the last three years based on the 2010 Aged Residential Care Review paid for by the Government,” the Chief Executive of NZACA, Martin Taylor, said today.

 “In addition district health boards have been funded to invest an additional $33.2 million on aged residential care subsidies over four years”.

 The $33.2 million increase over four years equates to an $8.3 million increase per year, or a 0.89% increase in the daily entitlement for the elderly in rest home, hospital or dementia level care.

 The 2010 Aged Residential Care Review also established the daily entitlement for the elderly in rest home care was 40% underfunded and the hospital rate 17% underfunded. 

 These underfunding levels have increased over the last three years as inflationary pressures have not been met.  The table below sets out the Aged Care Price Index (ACPI)[1] which shows inflationary pressures in the aged care sector have been well ahead of CPI and funding increases.

In 2012, there were around 32,000 people in care at any one time and about 40,000 elderly received care in one calendar year.  The average length of stay at rest home level is around one year and six months at hospital level care.

[1] The ACPI is based on the relevant goods and services pricing from a full suite of products that Statistics New Zealand price within the Producers Price Index (PPI)[1]. The exception is wage costs, which were established from the Quarterly Employment Survey (QES).

ENDS 

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