Aged care subsidy indexation figure announced as 1.7 per cent

Aged care providers face some sobering news in today’s announcement that subsidies paid by the government to providers to care for and support ageing Australians will increase by only 1.7 per cent during 2022-23.

Aged care funding and workforce shortages are in crisis – as identified by the Aged Care Royal Commission – a situation that has been exacerbated by the pandemic.

StewartBrown’s most recent Aged Care Sector report to March 2022 highlighted the operating loss being experienced by 64 per cent of homes, which equates to a loss of $12.85 per resident per day, despite the daily fee supplement of $10 per resident. Read the full report here.

ACCPA Interim CEO Paul Sadler said the announcement is dire news for aged care providers who have been stretched beyond their financial and organisational limits as they have continued to provide care and support through a global pandemic over the past two years.

“This figure is patently inadequate particularly as we know that two-thirds of aged care
facilities are currently operating in deficit,” Mr Sadler said.

“We have had positive engagement with the new Government on the problems facing the sector and the Prime Minister has nominated fixing aged care as a key priority, so we are perplexed by this news.

“We understand that the indexation figure was part of the Budget prepared by the previous Government so we are keen to hear the new Government’s plan to fix this issue consistent with its commitment to implement the recommendations of the Royal Commission.

“The gap between indexation and cost increases is enormous – with inflation at 5.1 per cent, award wages for most employee classifications increasing by 4.6 per cent, plus a 0.5 increase in the superannuation guarantee.

“This year’s gap adds to the gap from previous years and is further compounded by Award changes due to take effect in home care from 1 July and the ongoing costs of COVID-19.

“The inadequacy of aged care indexation is further illustrated by the fact that NDIS subsidies have been increased by nine per cent with a further supplement to provide funding for COVID-19 costs.

“We are deeply concerned that the aged care crisis will continue to worsen without urgent
action to adequately cover the costs of care and well-deserved pay increases for hard
working staff,” Mr Sadler added.


  1. It amazes me that the Labor government was elected because they were going to fix residential care, they quoted and criticised the liberals,pointed out where and how they would fix what the liberals broke…and now nothing! Broken promises in the first month. This underfunding has been going on for seven years and the sector has been extraordinary ineffectively represented and nothing appears to have changed..?


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