Link to announcement
Problem being addressed
The Royal Commission into Aged Care Quality and Safety Final Report (Royal Commission) found that staffing levels in residential aged care were inadequate to support quality care to older people, and recommended that government adopt minimum care time requirements to ensure consistent and adequate staffing across all aged care homes.
In October 2023, the Australian Government introduced mandatory care minutes requirements and substantially increased funding to aged care providers to fund them to increase their staffing to meet these requirements.
As of quarter 2 in the 2024-25 financial year, only 37.4 per cent of residential aged care homes met both their total care minutes and registered nurse targets. This means that Government funding for care is not being used as intended and most aged care residents are not receiving the amount of care considered necessary by the Royal Commission to meet their personal and clinical care needs.
Proposal
This Impact Analysis (IA) considers the following policy options to address the policy problem of mandatory care minutes requirements not being met:
- Option 1: Status quo
- Option 2: Linking care minutes funding to care minutes performance for non-specialised residential aged care homes located in metropolitan areas (i.e. Modified Monash model (MM)1 areas) without additional assurance arrangements
- Option 3 (preferred option): Linking care minutes funding to care minutes performance for non-specialised residential aged care homes located in metropolitan areas (i.e. MM1 areas) with additional assurance arrangements to manage the risk that providers may misreport their care minutes performance.
The percentage of residential aged care homes that meet their total care minutes targets is expected to be 9 percentage points higher under the preferred option, Option 3, than without policy change. This means more older people will live in aged care homes that have staffing levels that are adequate to meet their personal and clinical care needs.
Government is expected to directly save $221 million over 4-years from 2024-25 through reduced funding to the sector where care minutes are not delivered.
Assessed Impact Analysis outcome
Good practice
Assessment comments
The IA addresses the seven IA questions and follows an appropriate policy development process commensurate with the significance of the problem and magnitude of the proposed intervention.
To be considered ‘exemplary’ as per the Australian Government Guide to Policy Impact Analysis, the IA would have benefited from more detailed discussion of how barriers to government action could be overcome and the distributional impacts.
Regulatory burden
The Department of Health, Disability and Aged Care estimates the preferred option will increase average regulatory costs by $4.93 million per year, over ten years.