The government has announced a major overhaul of the beleaguered aged-care sector that provides additional funding, means-testing and greater invest in in-home care to address the slowly developing crisis in the industry.

The key elements of the package, based on the Productivity Commission's August 2011 report and consultations with the sector by Mark Butler, the Minister for Ageing, are:

  • A big increase in support for home care, with the number of funded home-care package increasing from 60,000 a year to 100,000, designed to reduce pressure on the nursing home sector. Home care packages will be means-tested (not including the family home) but there will by payments caps. There will also be more support for carers of people with dementia.
  • A rise in government accommodation support from $32.58 to $52.84 per day for new aged-care places, to address the lack of incentives to invest in new aged-care facilities. There will also be a means test and payment caps in place.
  • Greater flexibility in payment for accommodation, including a "cooling off" period once a place is secured, to put an end to fire sales of family homes
  • An additional $1.2 billion funding for the aged-care workforce while the sector transitions to more competitive wages for staff, who are currently significantly underpaid compared to other healthcare sectors
  • As per the PC's recommendation, a new single information gateway website, with the ultimate goal of a site that will provide tailored, localised information, including ratings and performance information about facilities.
  • Dementia to be added to the current list of National Health Priority Areas.

The announcement was strongly built around assurances from the government -- despite some bizarre media commentary overnight -- that family homes would be safe and indeed safer under the new arrangements, which are scheduled to start in July 2014, than under current arrangements.