ABBOTT-TURNBULL-MORRISON GOVERNMENT PRIVATISED AGE CARE STATE OF PLAY 2021: between 1 April and 12 May 2021 there were 1,827 serious incidents across Australia in residential aged care facilities involving everything from unreasonable use of force, inappropriate chemical restraint, sexual assault, psychological abuse, neglect, financial coercion, though to unexpected death

 

The saddest statistical tables in Australia today - remembering it took only 42 days for these serious Priority 1 examples of violence, neglect and abuse in residential aged care to accumulate.

Those 1,827 Priority 1 incidents were reported by a total of 392 residential aged care providers. That is est. 46 per cent of all residential aged care providers operating as of 30 June 2020.

Only 16 of the reportable notifications were investigated and, there is no guarantee that Priority 1 incidents are not being under-reported across the residential aged care industry - nor it seems is there any way of reliably checking.

Click table to enlarge

Tables taken from Serious Incident Response Scheme (SIRS): insight report, May 2021.

Do you have a friend or relative living in residential aged care? Perhaps next time you visit, consider taking note of the physical condition of your friend or relative as well as the state of their bed linen, room and adequacy of any meal.

If you have concerns report them by phone, in writing or online. 

See: https://www.agedcarequality.gov.au/making-complaint

Shorter Residential Aged Care Industry Message in 2020: If you personally pay us more we will treat you better

"If we expect people to pay more [in the future], we have to deliver much better care" [Catholic Health Australia chief executive Pat Garcia quoted in The Sydney Morning Herald, 9 February 2020]

ABC News, 9 February 2020:

Sydney's streets were thick with smoke as the blazes took hold on December 5 last year. 

That may explain why few noticed or cared about the final sitting day in Canberra.

But what happened in the Senate that day shows just how strong the ties that bind the aged care lobby and government really are.

At 9.30 that day, some crucial amendments to aged care legislation were introduced which would force nursing home to reveal how they spent their $20 billion of taxpayer funds each year — specifically, how much went to staff, food and "the amounts paid out to parent bodies".

Unlike hospital and child care centres, aged care facilities can employ as few staff as they like because there are no staff-to-resident ratios in nursing homes.

When it comes to food, a study of 800 nursing homes shows the average spend is just $6 a day.

The Senate vote was taking place just five weeks after 
the scathing interim report from the Royal Commission into Aged Care Quality and Safety.

Among its findings of a "sad and shocking" system which was 
"inhumane, abusive and unjustified", the commissioners also commented on the lack of transparency in aged care, with the numbers of complaints, assaults and staff numbers all kept secret from the public.

"My amendments are all about transparency and accountability — 
and, boy, do we need more of this," said Senator Stirling Griff from Centre Alliance, who proposed the amendments.

When the crucial vote came, Labor, the Greens, Centre Alliance and Jacqui Lambie supported it. But the Government voted against it and, with the help of Pauline Hanson, the reform was defeated.

It might seem an odd choice for Pauline Hanson, who has previously rallied against the aged care sector for "rorting and malpractice", but it shouldn't be surprising that the Government voted it down.

The influence of lobbyists

The aged care industry has been successfully lobbying governments for years. The influence of the industry through government committees, think tanks and policies is well known and is being rightly questioned at the royal commission.

For example, when the Queensland Government proposed laws requiring nursing homes to publish their staff numbers last year, the federal Department of Health sent a six-page document arguing against it, saying it might "confuse or mislead" families and "appears to create a reporting burden on providers with no clear benefits to consumers".

If you think the Federal Government's objections sound a lot like those of the aged care lobby, you wouldn't be wrong.

In fact, the industry group Leading Aged Services Australia (LASA) argued in its own submission that few families would be interested in accessing a website with such information and that the numbers could be used "to push a particular medically based care model (which may be contrary to the preferences of residents)".

That's an argument LASA has been using for years. It's code for arguing against more registered nurses for fear it spoils the "home-like" atmosphere of an aged care facility.

Others might argue that the hundreds of stories told to the royal commission of poor wound care, misdiagnosis and failure to send sick residents to hospital may have something to do with that lack of a "medical model".

Currently there's no requirement, except in Victorian state run facilities, for an RN to be employed at a nursing home.

The aged care lobby doesn't want that to become a national trend.

Why can't we know how many staff there are?'

The industry and Federal Government's opposition to the argument against making the staff numbers public didn't wash with the Queensland Government.

"We report the number of teachers to students in classes, educators to children in child care, why the hell can't we know how many staff there are in aged care facilities?," said Queensland Health Minister Stephen Mills, who successfully passed the legislation and says he will "name and shame" nursing homes which refuse to make staff numbers public.

Prime Minister Scott Morrison will argue that the Government voted against the federal moves for financial transparency because it doesn't want to introduce any major reforms before the final report from the royal commission.

However, that excuse didn't stop the Federal Government from its massive reform of putting the publicly funded Aged Care Assessment system out to tender last year.

The move to privatise it was widely denounced by state ministers (including from the NSW Liberal Government), advocates and the medical profession.

But the aged care lobby groups are big supporters of the change…...

Read the full article here.

The Sydney Morning Herald, 9 February 2020:

...the federal Health Department revealed it was yet to implement key recommendations of the Australian Law Reform Commission's 2017 report on elder abuse. 

Responding to a question taken on notice at a Senate estimates hearing, Health Department bureaucrats this week said a "scoping study" was being done on a register of aged care workers, while "preparatory work" was under way on a serious incident response scheme for assaults in care. 

Labor's aged care spokeswoman, Julie Collins, said older Australians at risk of abuse deserved "immediate action, not years of inaction and delays". 

Official data shows there were 5233 assaults in residential aged care facilities in 2018-19. 

Catholic Health Australia outlined its proposed new means-testing rules in a pre-budget submission to the federal government.

There is a question begging to be answered here. 

If Scott Morrison and his Lib-Nats cronies go down the path of attempting to permanenltly conceal what amounts to institutionalised elder abuse, allows residential aged care providers to further entrench differing levels of care based on an ability of the frail aged to pay and goes ahead with further aged care services privatisation in order to avoid accountability - has Morrison himself calculated just how many elderly Australians will be likely to commit suicide soon after being told they will be entering residential aged care?

Many of the cases of deficiencies or outright failings in aged care were known to both the providers concerned and the regulators before coming to public attention. Why has so little been done to address these deficiencies?

Opening page of the Royal Commission interim report on Aged Care in Australia......

Royal Commission into Aged Care Quality and Safety, Interim Report, Volume 1, p.1: 

It’s not easy growing old. We avoid thinking and talking about it. As we age, we progressively shift our focus from work to the other things that give us purpose and joy: our children and grandchildren, our friends, our holidays, our homes and gardens, our local communities, our efforts as volunteers, our passions and hobbies. The Australian community generally accepts that older people have earned the chance to enjoy their later years, after many decades of contribution and hard work. Yet the language of public discourse is not respectful towards older people. Rather, it is about burden, encumbrance, obligation and whether taxpayers can afford to pay for the dependence of older people. 

As a nation, Australia has drifted into an ageist mindset that undervalues older people and limits their possibilities. Sadly, this failure to properly value and engage with older people as equal partners in our future has extended to our apparent indifference towards aged care services. Left out of sight and out of mind, these important services are floundering. They are fragmented, unsupported and underfunded. With some admirable exceptions, they are poorly managed. All too often, they are unsafe and seemingly uncaring. This must change. 

Australia prides itself on being a clever, innovative and caring country. Why, then, has the Royal Commission found these qualities so signally lacking in our aged care system? We have uncovered an aged care system that is characterised by an absence of innovation and by rigid conformity. The system lacks transparency in communication, reporting and accountability. It is not built around the people it is supposed to help and support, but around funding mechanisms, processes and procedures. This, too, must change. 

Our public hearings, roundtable discussions with experts, and community forums have revealed behaviour by aged care service providers that, when brought to public attention, has attracted criticism and, in some cases, condemnation. Many of the cases of deficiencies or outright failings in aged care were known to both the providers concerned and the regulators before coming to public attention. Why has so little been done to address these deficiencies? We are left to conclude that a sector-wide focus on the need to increase funding, a culture of apathy about care essentials, and a lack of curiosity about the potential of aged care to provide restorative and loving care—all of which is underpinned by an ageist mindset— has enabled the aged care system to hide from the spotlight. This must also change. [my yellow highlighting]

Left isolated and powerless in this hidden-from-view system are older people and their families. ‘This is not a life.’ ‘This is not my home.’ ‘Don’t let this happen to anyone else.’ ‘Left in her own faeces, and still no one came.’ ‘Mum doesn’t feel safe.’ 

This cruel and harmful system must be changed. We owe it to our parents, our grandparents, our partners, our friends. We owe it to strangers. We owe it to future generations. Older people deserve so much more. 

We have found that the aged care system fails to meet the needs of our older, often very vulnerable, citizens. It does not deliver uniformly safe and quality care for older people. It is unkind and uncaring towards them. In too many instances, it simply neglects them.

Morrison Government's understanding of human rights and aged care appears flawed

"Restrictive practices can elicit concern for a number of reasons. Fundamentally, they impact on the liberty and dignity of the care recipient. In circumstances where they are not absolutely necessary, their use is likely to sit uncomfortably for many. Their use without lawful consent may infringe the resident’s legal rights and constitute a civil or criminal offence, such as assault or false imprisonment, although there are very few cases in Australia where a criminal or civil complaint has been pursued to challenge the use of a restraint in an aged care setting. Physical and chemical restraint can have significant adverse effects on a resident, both physically and psychologically. There are also fundamental questions about their effectiveness."  [Royal Commission into Aged Care Quality and Safety, Background Paper 4, May 2019]

9 News, 20 August 2019: 

The Commonwealth government recently introduced changes aimed at limiting the use of restraints in residential facilities. 

But experts believe the regulations have created many more problems than they solved. 

They are urging the Commonwealth to scrap the regulations and start again from scratch. 

Queensland's public guardian Natalie Siegel-Brown said the changes placed her agency and the community in a "really compromising" position. 

"Unfortunately in their current form, the principles actually regress the recognition of human rights of people living in aged care, particularly with respect to chemical restraints," she told the committee in Sydney on Tuesday. 

"But the entire suite itself lacks any monitoring, enforcement or oversight in any event, and this can lead to greater problems." 

Colleen Pearce, from the Victorian Office of the Public Advocate, said aspects of the regulations were flawed and ambiguous. 

"We consider the principles are inconsistent with people's human rights (and) would preferably be contained in legislation," 

Dr Pearce told the committee. "(The principles) introduce, in the case of physical restraints, a new flawed and ambiguous substitute decision-making regime, provide virtually no regulation of chemical restraint usage, and lack the safeguards of other restrictive practices regulatory schemes." 

Joseph Ibrahim, the head of the Health Law and Ageing Research Unit at Melbourne's Monash University, described the regulations as stupid. 

"There is no monitoring mechanism, there are no sanctions associated, there is no way of implementing or making sure the law comes into effect," Professor Ibrahim said. 
A group of advocates believe the government should be prohibiting the misuse of restraints and over-medication, rather than regulating them. 

They argue medication should only be used for therapeutic practices and be administered with a patient's free and informed consent. 

The group includes Aged and Disability Advocacy Australia (ADA) and Human Rights Watch, both of which addressed the hearing on Tuesday. 

"Older people in nursing homes are at serious risk of harm if this new aged care regulation is allowed to stand as is," ADA chief executive Geoff Rowe said. 

"Australia's parliament should act urgently to ensure that everyone, including older people, is free from the threat of chemical restraint.".....

The Canberra Times, 21 August 2019:

New rules on the use of restraints in aged care could lead to more elderly residents being sedated, a parliamentary inquiry has heard. 

The regulation is also unenforceable, and does nothing to relief the staffing pressures that have led to the use of restraints, expert witnesses have said..... 

Professor Joe Ibrahim from Monash University's Health Law and Ageing Research Unit said the regulation also did not recognise the pressures within aged care that forced staff to use restraints. 

"Staff restrain residents to get through their day because they don't have enough hands to get through what's needed or they don't have the skills, knowledge, ability to assess why a person has responsive behaviours or unmet needs to address that," Professor Ibrahim said. 

"A law that isn't monitored, has no sanctions, no way of checking, it will drive practice underground." 

Queensland Nurses and Midwives Union professional officer Jamie Shepherd said he knew of a case where one registered nurse had to administer medication to 166 residents on night shift, and management resisted rostering on an enrolled nurse to help until the RN threatened to call an ambulance each night to assist. 

Australian Nursing and Midwifery Federation federal professional officer Julie Reeves said through a recent member survey, she learnt of an aged care home where there were just six staff rostered on overnight to look after 420 residents. 

"We cannot always effectively manage challenging behaviour issues for dementia residents while at the same time caring for others who have very complex health issues. 

We receive little to no support from management when things don't go as planned," she quoted the member as saying. 

Australian Human Rights Commission president, Emeritus Professor Rosalind Croucher said while parts of the regulation had merit, it should not be allowed to proceed unless there was a mechanism for independent oversight. "If it's a choice of it or nothing, nothing might be better than it as it is," Professor Croucher said....

Physical restraining devices currently allowed in Commonwealth-funded aged care facilities are:

Bed rails
Chairs with locked tables
Seat belts other than those used during active transport
Safety vests
Shackles
Manacles
[my yellow highlighting]

Chemical restraint is any medication or chemical substance used for the purpose of affecting a person's behaviour, other than medication prescribed for the treatment of, or to enable treatment of, a diagnosed mental disorder, a physical illness or a physical condition. 

Use of chemical restraint is specifically excluded from assessment in the National Aged Care Mandatory Quality Indicator Program. [See p.15]


BACKGROUND:

 Quality of Care Amendment (Minimising the Use of Restraints) Principles 2019

What many frail aged Australians can expect if they enter a nursing home - maggots, rotten food and a starvation diet

ABC News, 16 July 2019:

PHOTO: Pictures supplied to ABC investigations as part of a crowdsourcing project on food in aged care. (Supplied)

…..Cutting corners

Earlier, a roundtable of three chefs with almost 100 years of experience in a range of aged care services and kitchens between them suggested an answer to why food standards were so poor.

The commission heard the quality of aged care menus — described by one panellist as "the one thing [residents] get to look forward to" — came down to what the facility paid per resident.

For $16 a day, the residents of the unnamed facility Lindy Twyford manages were served salt-and-pepper squid, fillet mignon, and occasional portions of frozen but high-quality produce.

At the other end of the spectrum, a home spending $7 would rely on secondary cuts of meat and mass-ordered vegetables, some of which would be thrown out at the expense of serving sizes.

"You're having to cut corners, you're having to use frozen foods, you're having to use processed foods just to feed residents," chef Nicholas Hall said.

Mr Hall said food costs at some facilities he formerly worked at were inflated by an ordering system beyond supermarket prices, in one instance by as much as 100 per cent.

Chef Timothy Deverell raised concerns about the lack of training to create texture-modified foods, menus that had no input from residents until they complained, and food served on open-air trolleys that was often cold by the time it reached some residents.

Some homes would place food orders using a "restrictive" system in which a drop-down box offered just a handful of options, Mr Hall said.

Facilities would opt for finger food platters because they were "low-risk", cheap, and didn't require a chef.

Some meals would be repeated up to three or four times a week as providers made a bid to reduce costs.

"They're racing to the bottom to see who can feed for the lowest amount of cost," Mr Hall said

Maggots, rotten food

The commission was also told of one "upmarket residential aged care facility" which had a maggot-infested rubbish store between service trolleys and a nearby fridge containing enough rotten food to fill a trailer.

"[I've seen] reusing food that's already been out, served to residents and come back to the kitchen," Mr Deverell said.

"They use that for texture-modified diets."

Mr Hall said food safety audits were too infrequent and services were given advance notice, meaning extra cleaners could be hired to bring facilities up to scratch.

He said nutritionists failed to properly engage with residents and their needs…..

Australian Royal Commission into Aged Care Quality and Safety now underway

Commencing in 2016-17 when Australian Prime Minister and Liberal MP for Cook Scott Morrison was then just the Federal Treasurer he cut $472.4 million from Aged Care funding over four years, then followed that up with a $1.2 billion cut over the same time span.

When deteriorating conditions in nursing homes around the country began to be reported in the media and the Oakden scandal came to light in 2017, concerned citizens began to call for a royal commission.

The Liberal Minister for Aged Care and Liberal MP for Hasluck Ken Wyatt was of the opinion that such an inquiry would be “a waste of time and money”.

Once Scott Morrison realised that ABC Four Corners was about to air an exposé on aged care provision he quickly changed his mind and announced the Royal Commission into Aged Care Quality and Safety on 16 September 2018.

www.agedcare.royalcommission.gov.au:

The Royal Commission into Aged Care Quality and Safety was established on 8 October 2018 by the Governor-General of the Commonwealth of Australia, His Excellency General the Honourable Sir Peter Cosgrove AK MC (Retd).

The Honourable Richard Tracey AM RFD QC and Ms Lynelle Briggs AO have been appointed as Royal Commissioners…

The Commissioners are required to provide an interim report by 31 October 2019, and a final report by 30 April 2020…

The Commissioners were appointed to be a Commission of inquiry, and required and authorised to inquire into the following matters:

a.    the quality of aged care services provided to Australians, the extent to which those services meet the needs of the people accessing them, the extent of substandard care being provided, including mistreatment and all forms of abuse, the causes of any systemic failures, and any actions that should be taken in response;

b.    how best to deliver aged care services to:

                i.        people with disabilities residing in aged care facilities, including younger people; and

               ii.        the increasing number of Australians living with dementia, having regard to the importance of dementia care for the future of aged care services;

c.    the future challenges and opportunities for delivering accessible, affordable and high quality aged care services in Australia, including:

                i.        in the context of changing demographics and preferences, in particular people's desire to remain living at home as they age; and

               ii.        in remote, rural and regional Australia;

d.    what the Australian Government, aged care industry, Australian families and the wider community can do to strengthen the system of aged care services to ensure that the services provided are of high quality and safe;

e.    how to ensure that aged care services are person‑centred, including through allowing people to exercise greater choice, control and independence in relation to their care, and improving engagement with families and carers on care‑related matters;

f.     how best to deliver aged care services in a sustainable way, including through innovative models of care, increased use of technology, and investment in the aged care workforce and capital infrastructure;

g.    any matter reasonably incidental to a matter referred to in paragraphs (a) to (f) or that [the Commissioners] believe is reasonably relevant to the inquiry.

A preliminary hearing was held in Adelaide on 18 January 2019.

At this hearing the Commissioner Tracy stated in part:

The terms direct our attention to the interface between health, aged care and disability services in urban, regional and rural areas. These issues necessarily arise because of Australia’s changing demography. We are also required to look at young people with disabilities residing in aged care facilities and do our best to deliver aged care services to the increasing number of Australians living with dementia. Part of our task is to examine substandard care and the causes of any systemic failures that have, in the past, affected the quality or safety of aged care services. We will consider any actions which should be taken in response to such shortcomings in order to avoid any repetition. This will necessarily involve us in looking at past 25 events. There have been a number of inquiries which have considered matters that, in certain respects, fall within our terms of reference. We are not required by the Letters Patent to inquire into matters which we are satisfied that have been, is being or will be 30 sufficiently and appropriately dealt with by another inquiry or investigation or a criminal or civil proceeding. As a general rule, we do not intend to re-examine matters which have been specifically examined in previous inquiries. We do, however, expect to examine the changes and developments which have followed previous inquiries, as well as the extent to which there has been implementation of recommendations from those inquiries. Where we have different views, they will be made known.

According to ABC News on 18 January 2018: Out of almost 2,000 Australian aged care providers invited to shed light on the sector ahead of the royal commission, only 83 have been forthcoming with information, the Adelaide inquiry was told.

The Guardian on 18 January reported: Counsel assisting Peter Gray said the commission had received more than 300 public submissions since Christmas Eve and 81% concerned provision of care in residential facilities, with staff ratios and substandard care the most common themes. The federal health department has also passed on 5,000 submissions it received before the commission’s terms of reference were set.

Interested members of the public can still make submissions as the Royal 

Commission will continue to accept submissions until at least the end of June 2019.

Details on how to make a submission can be found here.

Aged Care in Australia 2018: why government and the aged care industry make one want to weep in frustration

"The true measure of any society can be found in how it treats its most vulnerable members." [Attributed to Mahatma Ghandhi]

A little over five months ago the ABC program "4 Corners" asked people to contact its office to talk about their experience of the aged care system as staff, client or family member of an older person. 

Over four thousand Australians responded and the "Who Cares?" episode was produced and then aired on national television on 17 September 2018.

The day before this episode was scheduled for viewing Prime Minister and Liberal MP for Cook Scott Morrison made a rush announcement of a Royal Commission into Aged Care Quality and Safety - no terms of reference and no start date specified.

This royal commission if it goes forward this year will be the 21st review of the aged care system since 1997 - that's 21 reviews in 21 years.

Twenty-one years in which not one federal or state government has come to grips with the fact that there is a two-tier care system in operation based on the older person's ability to pay.

This plays out almost as apartheid in many aged care facilities, with separate wings in the building/s, separate nursing & other staff, separate meal choices and recreational activities.

It is also twenty-one more years in which older people of limited means have been almost warehoused. Receiving at best what can only be described as benign neglect and at worst extreme abuse.

No-one appears to being asking why so many older people entering residential care die within four years of admission (with death occurring on average around 2.5 years after admission) and why there is such a high percentage of premature deaths.

The incidence of premature and therefore potentially preventable death from the 11 principal external causes identified in a 2016 epidemiological analysis is apparently not going down over time and over the last ten or so years appears to be rising.

For over two decades registered charities, consumer groups and government watchdogs have never truly comes to grips with the basic realities of this two-tier care system.

A system which sees vulnerable older people verbally abused, threatened, physically beaten and deliberately denied appropriate basic care - reports of which can be found in the records of the federal Health Care Complaints Commission, state agencies such as the Nurses and Midwifery Council of New South Wales and in the media.

The day after the "4 Corners" program went to air, one representative of a registered charity which purports to represent older Australians was on national television condemning the types of abuse revealed in this program.

However, in the next breath - and almost in denial of such widespread abuse - he was talking about the need to understand why there was also excellent care in the aged care system and how residential aged care providers which meet or exceed Commonwealth aged care standards need to be rewarded.

He talked about some aged care providers being "world class" until the interviewer brought him back to looking at the ugly truth of the situation.

He was not alone in demonstrating how difficult it is for those associated with aged care to steadily fix their gaze on this seriously flawed system and insist that it be genuinely reformed.

It is hard not to see Scott Morrison's announcement of a royal commission as one meant to pre-empt the "4 Corners" program ahead of the Wentworth by-election on 20 October 2018 - given that the Minister for Senior Australians and Aged Care & Liberal MP for Hasluck Ken Wyatt appeared lukewarm about the need for a royal commission into the aged care system just last month and, in the face of contrary evidence the Prime Minister continues to deny the controversial federal funding cuts to the sector by way a tweak of the Aged Care Funding Instrument to the tune of $1.2 billion in efficiency savings in the 2018-19 Budget.

Elder abuse and profit shifting go hand-in-hand in the age care sector?

Any regular reader of online news would have seen mentions of elder abuse, neglect and sub-standard health care over the years.

hellocaremail.com.au, 2017:

Elder abuse is a critical issue in aged care homes, with thousands of cases reported to the Health Department every year…. In 2016-2017, there were 2853 reports of “reportable assaults’’ and 2463 allegations of “unreasonable use of force”.

Australian Law Reform Commission, Elder Abuse (DP 83), Abuse and neglect in aged care, 12 December 2016:

1.34   Stakeholders reported many instances of abuse of people receiving aged care. These included reports of abuse by paid care workers[55] and other residents of care homes[56] as well as by family members and/or appointed decision makers of care recipients.[57] For example, Alzheimer’s Australia provided the following examples of physical and emotional abuse:

When working as a PCA [personal care assistant] in 2 high care units, I witnessed multiple, daily examples of residents who were unable to communicate being abused including: PCA telling resident to ‘die you f---ing old bitch!’ because she resisted being bed bathed. Hoist lifting was always done by one PCA on their own not 2 as per guidelines and time pressures meant PCAs often using considerable physical force to get resistive people into hoists; resident not secured in hoist dropped through and broke arm—died soon after; residents being slapped, forcibly restrained and force-fed or not fed at all; resident with no relatives never moved out of bed, frequently left alone for hours without attention; residents belongings being stolen and food brought in by relatives eaten by PCAs.[58]

1.35   The ALRC also received reports of other forms of abuse, including sexual[59] and financial abuse.[60] Restrictions on movement[61] and visitation[62] were also reported. Many submissions also identified neglect of care recipients.[63]

The Sydney Morning Herald, 15 October 2017:

Across NSW, 58 per cent of aged care workers surveyed said they have not been able to provide the level of care residents deserved because of budget cuts. Of those, 80 per cent said staff shortages were the main barrier to providing proper care.

The Courier-Mail, 19 April 2018: 

PROFIT-HUNGRY aged care companies are charging fat “administration fees” to skim up to 40 per cent of government payments for in-home nursing care.

More than 100,000 elderly Australians are on a waiting list to receive as much as $50,000 a year in a “homecare package” to pay for nursing, housekeeping or companionship at home. But an investigation by The Courier-Mail has revealed that some home-care companies are pocketing as much as $19,000 of the taxpayer cash through hefty “administration” or “case management” fees.

The fees are billed on top of hourly charges for home help – leaving clients with less cash to spend on in-home care such as nursing. And if clients want to switch to a cheaper provider, they are being slugged up to $1000 in “exit fees”.

The Age, 3 May 2018:

Scandals, including a recent national audit showing 600 aged-care homes failed in the past five years to provide minimum standards, prompted a government review. The Coalition, accepting a key recommendation, has ended the ridiculous practice of alerting operators to spot checks. The review also urged the streamlining and strengthening of the regulator.

If one does a simple online search many of the big ‘for profit’ aged care providers are named in relation to such abuse, neglect and sub-standard health care allegations.

Now in May 2018 the Tax Justice Network^[1]  is looking at aged care provision from another angle. One which shows that the budgetary meanness which sees these big companies expect elderly residents to remain in sodden incontinence pads or live-off meagre meal rations occurs in spite of the millions in profit made on the back of billions in taxpayer funding of the age care sector.

It has released A Tax Justice Network – Australia Report, TAX AVOIDANCE BY FOR-PROFIT AGED CARE COMPANIES: PROFIT SHIFTING ON PUBLIC FUNDS.

Sadly, this report only confirms the fact that corporate greed runs rampant through all major aspects of Australian life, including aged care.

Executive Summary, Background, p.5:

Older people are a growing proportion of Australia’s population; in 2016, 15% (one in seven) Australians were aged 65 years or older. By 2056 this percentage is expected to grow to 22% (8.7 million).1 The need for aged care services is increasing. Between 2015– 2016 almost 214,000 people entered aged care in Australia. On average, older people in Australia spend three years in permanent residential care, just over two years in home care, and one and a half months in respite care.2 The Australian tax payer, via the Commonwealth Government contributes around 75% of the expenditure in aged care in Australia, which is around 96% of the total funding on aged care from Commonwealth and State Governments. Government recurrent spending on aged care services in Australia was $17.4 billion Australian dollars (AUD) in 2016- 2017, with residential aged care services accounting for 69.3% ($12.1 billion AUD).3 Some of this funding is provided as subsidies to aged care provider companies including those that operate for profit. In 2018 the Australian Nursing and Midwifery Federation (ANMF), Australia’s largest national professional and industrial nursing and midwifery organisation with over 268,500 members, commissioned the Tax Justice Network - Australia to analyse possible tax avoidance by for-profit aged care companies and to provide recommendations for improving transparency on Government spending on for-profit aged care.

Key points from the report

* By number of beds, not-for-profit providers are the largest aged care provider group in Australia (52% in 2013-2014), however there has been a rapid growth in the size and spread of for-profit companies; Bupa, Opal, Regis and Estia are the largest aged care providers nationally. If Japara and Allity are included, these 6 for-profit companies operate over 20% of residential aged care beds in Australia.

* In the most recent year (mostly the 2017 financial year) the six largest for-profit companies were given over $2.17 billion AUD via government subsidies. This was 72% of their total revenue of over $3 billion. These companies also reported profits of $210 million AUD (2016-2018).

* Companies can use various accounting methods to avoid paying tax. One method is when a company links (staples) two or more businesses (securities) they own together, each security is treated separately for tax purposes to reduce the amount of tax the company has to pay. Aged care companies are known to use this method as well as other tax avoiding practices. Another practice is by “renting” their aged care homes from themselves (one security rents to another) or by providing loans between securities and shareholders.

* The six largest for-profit aged care providers have enormous incomes and profits:

* The largest company, BUPA, had almost $7.5 billion in total income in Australia (2015-16) but paid only $105 million in tax on a taxable income of only $352 million.

* BUPA’s Australian aged care business made over $663 million in 2017 and over 70% ($468 million) of this was from government funding.

* Funding from government and resident fees increased in 2017, but BUPA paid almost $3 million less to their employees and suppliers.

* The second largest, Opal, had total income of $527.2 million in 2015-16 but paid only $2.4 million in tax on a taxable income of only $7.9 million.

* 76% ($441 million) was from government funding in 2016.

* Allity had total income of $315.6 million in 2015-16 and paid no tax.

* 67% ($224 million) of Allity’s revenue was from government funding in 2016-17.

* Regis, Estia, and Japara are listed on the Australian Securities Exchange (ASX) but appear to be using methods to reduce the amount of tax they pay while earning large profits from over $1 billion of government subsidies.

* Family owned aged care companies (Arcare, TriCare, and Signature) receive between $42-$160 million each in annual government subsidies but provide very little public information on their operations and financial performance and may use accounting methods to avoid paying tax.

 * (All figures quoted above are in AUD)

* The Australian Government and the Federal Opposition (the Australian Labor Party) have proposed several ways to fix the problems with companies avoiding tax by using trust structures and other methods but there are still loopholes.

* It is difficult to get a detailed and complete picture of the full extent to which these heavily subsidised aged care companies are avoiding paying as much tax as they should, because Australian law is not currently strong enough to ensure that their financial records and accounting practices are publicly available and fully transparent.

Conclusion

The six largest for-profit aged care providers in Australia received over $2.17 billion AUD in annual tax payer funded subsidies which provided after tax profits of $210 million AUD. The actual operating profits were much larger. These providers only paid around $154 million AUD in tax in 2015-16. Companies that receive millions of tax payer dollars via Australian government subsidies must be required by law to meet higher standards of transparency in financial reports and be publicly accountable. The report calls upon the Government, Opposition, and cross-bench Senators to work together to make laws to stop aged care providers from avoiding the taxes they should pay and provide clear records of their business dealings.

The Tax Justice Network – Australia strongly supports recent government legislation that has been introduced to close loopholes in the Multinational Anti-Avoidance Law and government reforms to stapled structures. However, there is still a need for additional transparency measures. The Tax Justice Network – Australia also strongly supports a policy proposed by the Australian Labor Party to introduce minimum taxation of discretionary trusts. These reform measures are examined in more detail by this report in the section: Current Reform Measures.

This analysis of tax payments and corporate structures of the largest for-profit aged care companies provides clear evidence that simple common-sense reforms are needed immediately to restore integrity to the tax system and to ensure public accountability on billions of dollars in government spending.

RECOMMENDATIONS FROM THE REPORT

Any company that receives Commonwealth funds over $10 million in any year must file complete audited annual financial statements with Australian Securities and Investments Commission (ASIC) in full compliance with all Australian Accounting Standards and not be eligible for Reduced Disclosure Requirements. Public and private companies must fully disclose all transactions between trusts or similar parties that are part of stapled structures or similar corporate structures where most or all income is earned from a related party and where operating income is substantially reduced by lease and/or finance payments to related parties with beneficial tax treatment.

Australia’s Largest For-Profit Aged Care Companies

In Australia, non-profit providers collectively operate a majority of residential aged care beds. However, the market share of large for-profit providers continues to grow rapidly. Likewise, the influence of for profit providers on shaping government policy and influencing broader trends in the aged care sector has never been greater. Ranked by the number of government allocated residential aged care places (beds) in 2017, the six largest for-profit aged care companies in Australia are; Bupa, Opal, Regis, Estia, Japara, and Allity. Combined, they operate over 20% of all residential aged care beds in the country. These companies continue to expand market share through new developments and acquisitions. These companies are also expanding to provide more retirement living and home care services, which allow access to additional government funding. In the most recent financial year (2016-2017), these six for-profit aged care companies combined received over $2.17 billion in government subsidies.4 This made up 72% of their combined total revenue of over $3 billion.5……

COMPANY SNAPSHOT

Bupa: A United Kingdom-based mutual insurance company with global operations including aged care services. Australia is Bupa’s largest and most profitable market.

Regis, Estia, and Japara: Public aged care companies listed on the ASX.

Opal: A private aged care company owned by subsidiaries of two listed companies, AMP Capital and Singapore-based G.K. Goh.

Allity: controlled by Archer Capital, an Australian private equity firm with large foreign pension fund investors.

Arcare, TriCare and Signature (formerly Innovative Care): three family-owned, for-profit aged care companies.

NOTE:

1. The Tax Justice Network - Australia is the Australian branch of the Tax Justice Network (TJN) and the Global Alliance for Tax Justice. TJN is an independent organisation launched in the British Houses of Parliament in March 2003. It is dedicated to high-level research, analysis and advocacy in the field of tax and regulation. TJN works to map, analyse and explain the role of taxation and the harmful impacts of tax evasion, tax avoidance, tax competition and tax havens. TJN’s objective is to encourage reform at the global and national levels.

Membership of the Network can be found here.