Funding lift for rest-homes

The aged-care sector has secured a 1.8% funding increase for the next 12 months, well above recent annual increases, Forsyth Barr broker Lyn Howe says.

The funding increase was well above the average increase of about 1% in recent years and was a good outcome for the sector.

There was also additional funding going towards ambulance costs and sharing the increase costs of bariatric equipment affecting operators.

Funding increases were negotiated through the annual A21 negotiations of the Age Related Residential Care services agreement, she said.

All listed operators would benefit but it was more significant for the heavily ''needs based'' operators such as Ryman, Oceania and Arvida.

The negotiations this year were complicated by the lift in funding due to the equal pay settlement.

Wage pressure for caregivers was just one area of concern facing the cost base of operators.

The New Zealand Aged Care Association's aged care price index had indicated 68% of total costs were wages, Ms Howe said.

The increase was in addition to the increased funding associated with the equal pay settlement which had just been confirmed at about 8% of increased funding.

The weekly rest-home fee was increasing by $66.

''As anticipated, the funding increase is being passed through to operators by a lift in the daily rates for rest-home, hospital, dementia and psycho-geriatric beds.

''The pay increase for care givers is complex and the 1.8% lift in broader funding will help if there is any initial funding shortfall for some operators.''

Thirty percent of the sector was private-paying and an increase in funding through the maximum contribution increased the maximum private contribution for private-paying residents, Ms Howe said.

The maximum contribution was a combination of the weekly amount residents paid for rest-home care and the level of the residential care subsidy paid for eligible residents.

The increase could have an impact on the level of additional room premiums some residents were prepared to pay in the near-term.

Private residents would need to pay an extra $66 a week for the rest-home level care rate increase, she said.

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