Aged Care Investors Penalised

Aged Care Investors Penalised

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“The recent release of the Grant Thornton analysis of the aged care industry is proof positive that reform of the current system is essential,” said Rod Young, CEO, Aged Care Association Australia (ACAA). “The current scheme punishes providers who have responded to Government and community demand that they invest in superior buildings with quality fittings and furnishings,” said Mr Young. Grant Thornton who undertook the largest private survey of aged care providers with over seven best aged care facilities participating clearly shows it is more profitable to run a multi bed room than a single bed room.

“EBITDA of $2,191.00 for a single room whilst a multi bed room achieves an average EBITDA of $4,233.00 per annum clearly shows that stated Government policy of improved infrastructure and the financial drivers imposed by Government are working in opposite directions,” said Rod Young. “In other words, be part of the $1.5B annual infrastructure investment in aged care and the chances are you will end up losing money,” Mr Young said. “You will certainly make less money,” said Mr Young, “with facilities built prior to 2000 achieving an average per annum net profit of $1,036.00 per bed and those built after 2000 (predominantly single room, ensuite accommodation) averaging a net loss of $584.00 per bed per annum.”


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Aged Care Association Australia (ACAA) has called on the Federal Government in its 2009-10 budget submission to significantly reform the aged care funding scheme. ACAA CEO, Rod Young said, “reform is essential if Government is to avoid significant decline in future capacity.”

“With a projected trebling of demand for services over the next thirty year and a current infrastructure investment of $1.5B per annum, it is essential that the current system is reformed to enable the industry to continue to invest,” said Mr Young. “These are not short term issues. From initial concept to a fully functioning residential care facility, it can take five to seven years; which means system sustainability is essential,” said Mr Young.

The ACAA budget submission among other things called on the Federal Government to: ▪ uncap the daily accommodation charge for high income older people and increase it for those on medium income so that it is equivalent to the average previous year bond.

This measure has no cost to Government; and ▪ provide real choice to older Australians who want to pay an upfront refundable deposit for their high care accommodation.

This measure has no cost to Government; and link Government payments for concessional residents to the average modern bed cost.

This measure is estimated to have a cost to Government of $422M. ▪ if the above steps occur then Aged Care Assessment Teams (ACATs) assessments should apply to entry into care not to level of care. ACAA represents over one thousand providers of seniors housing, retirement living, community care and residential care services nationally.

Future Impact Of Climate Change Research Applauded

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Aged Care Association Australia (ACAA) welcomed the announcement yesterday by Climate Change Minister, Senator Penny Wong, to fund research that will advise on a national strategy for health and climate change.

Rod Young, ACAA CEO, said ‘the growth in the Australian population over 65 years to 7.2 million over the next thirty years and in particular the quadrupling of the over 80 years age group to 1.6 million means detailed research into the likely impact on the elderly will be essential to ensure the provision of adequate and appropriate health and housing services.’ ‘If the Australian healthcare system is to adequately plan for likely changes into housing requirements, service types and respond to changing disease outcomes caused by climate change then planning for these significant events should commence as soon as possible as reform of this nature often has a long lead time involving physical infrastructure and campaigns to convince the general public of the need for lifestyle change,’ said Mr Young.

The Government is therefore to be commended in providing funds to commence this valuable research and aged care will be more than willing to contribute its support to achieving a successful outcome. ACAA represents over one thousand providers of seniors housing, retirement living, residential and community care services across Australia.

AgeWell RoadShow


The introduction of the Aged Care Funding Instrument (ACFI) on 20th March 2008 represented one of the biggest changes in residential aged care since the passing of the Aged Care Act in 1997. Many person hours of effort from the Government and from industry representatives and stakeholders has gone into the design of ACFI and making its introduction as smooth as possible.

The information presented through the links below has been developed by ACAA and ACSA. It is intended to complement that produced by the Department of Health and Ageing and a link to their web site may also be found below. Presenting issues, questions and other material from an industry perspective will aid understanding of the ACFI and assist in collecting information to support any changes which may be required as implementation proceeds.

Feedback on this site and the information contained within it is welcome and should be directed to or through your State Association.

Contact Us

Aged Care Association Australia (ACAA)
Level 1
32 Napier Close
Deakin ACT 2600

PO Box 335
Curtin ACT 2605

T: 02 6285 2214 or 08-9409 7098
F: 02 6281 5223