Elderly in Care likely to Miss Out Again
12 October 2008
The Government, on October 1, made a windfall gain of $11 million, from the elderly in aged residential care.
On 1 October, the superannuation component of the aged-care subsidy went up which meant the Government component of the
subsidy went down resulting in a net gain to the Government of $11 million dollars.
"We are surprised that the money has not already been passed on considering the sector only received a partial
inflation adjustment of 2.8% in July despite inflation being 3.5% this year," said Martin Taylor, CEO of HealthCare
Providers NZ.
"DHBs have said the money will be used for aged care, but they have explicitly remained silent as to whether this means
it would be passed onto the sector in compensation for withholding a full inflation adjustment in July."
"Ultimately the Minister is responsible as DHBs are his agents, but he has made no move to ensure it is passed on. At
the end of the day it is his call whether the government will retain the windfall or pass it on to compensate the sector
for not ensuring a full inflation increase this election year."
The issue of automatic inflation adjustments is very important if the sector is to remain sustainable in the short,
medium and long term.
"Everyone agrees that we need to inflation index superannuation to guarantee the elderly have a decent quality of life,
but this understanding has not been accepted for those who look after the elderly."
Currently, the entitlement the elderly in care receive is not indexed to inflation, despite the negative affect this
has on care delivery and future sustainability. The entitlement is to ensure their quality of life.
"If the sector does not receive automatic inflation adjustments then this will contribute to the looming crisis in aged
care which will hit by 2011," Mr Taylor said. "We have asked all political parties to show leadership and commit to
ensuring the elderly in care are protected from inflationary costs, and that the sector's sustainability is thoroughly
looked into to ensure the elderly get the right care at the right time".
The responses received from political parties to date are :
Labour: Labour will review the way funding is distributed to aged care providers by DHBs, including consideration of
whether aged residential care subsidies should be automatically indexed to inflation or whether DHBs should retain
discretion."
National: National will require DHBs to index the subsidy paid for elderly in care by the annual FFT adjustment.
New Zeland First: New Zealand First believes that just as New Zealand Superannuation is indexed for inflation annually,
then the subsidy paid to elderly in care should follow a similar formulae as a minimum.
United Future: UnitedFuture will ensure that subsidies paid to the elderly in care are indexed to CPI."
Greens: Yes. It is Green Party policy to improve funding of residential care for older people to recognise increased
costs and develop a sustainable funding path.
Full responses can be viewed at www.whocares.org.nz.
"While some parties are clearly avoiding making a commitment, it is clear the majority of parties believe the inflation
issue is a problem because they have made robust policy commitments to address the issue. For the sector to be
sustainable, politicians need to show strategic leadership and, if this does not happen, the sector will be in crisis by
2011," said Mr Taylor.
ENDS