Knives out for aged-care companies

After years of business as usual, the for-profit aged-care sector is increasingly being targeted by the Federal Government for its perceived poor standard of care and alleged tax evasion.

Yesterday, the Department of Health issued a new standardised code that will be enforced across the sector from 1 July 2019. It replaces four previous standards.

Earlier this week, a Senate committee was told several private nursing home companies were allegedly engaging in tax avoidance and tax minimisation, the ABC reported.

A report by the Tax Justice Network (TJN) detailed how the top six providers received more than $2.17 billion in annual taxpayer subsidies, more than double this amount in other income from customers, yet paid only $154 million in tax in the 2015-2016 financial year.

The Senate Economics References Committee recommended that the Royal Commission into Aged Care consider forcing the Health Department to make the tax and financial structures of aged-care providers more transparent in determining whether there is any impact on the quality of care received by older Australians.

Meanwhile, the new aged-care quality standards revealed yesterday will, among other things,  expect providers to:

  • enable consumers to make connections with others and maintain relationships of choice, including intimate relationships
  • support consumers to take risks to enable them to live the best life they can
  • recognise and address the needs, goals and preferences of consumers nearing the end of life, their comfort maximised and their dignity preserved
  • respond in a timely manner to any deterioration of a consumer’s mental health, cognitive or physical function
  • treat each consumer with dignity and respect, with their identity, culture and diversity valued
  • have a culture of inclusion for consumers
  • support consumers to exercise choice and independence and respect their privacy
  • demonstrate that each consumer gets safe and effective personal care and clinical care that is tailored to their needs
  • provide meals that are varied and of suitable quality and quantity
  • ensure equipment is safe, suitable, clean and well-maintained.


The Government is distributing $50 million to residential aged-care providers to help them  transition to the new standards in the next six months.

“Implementation of the new standards is a critical part of our Government’s aged-care reforms, which will continue at full pace, while the royal commission undertakes its important and comprehensive inquiry into the aged-care sector,” Minister for Aged Care Ken Wyatt said in a statement.

In September, the Government announced a royal commission into aged care just as the ABC’s Four Corners program revealed it would report on its investigation of abuse of the elderly in a number of facilities.

The royal commission is yet to begin conducting hearings and is still inviting submissions.

Its terms of reference mostly address delivery of care rather than the financial issues raised by the senate committee when it tabled its report on Tuesday evening.

The report contained information from the TJN about the largest for-profit aged facilities –  Bupa, Opal, Regis, Estia, Japara and Allity.

However, the findings were challenged by a group of Coalition MPs on the committee, who called any further investigation of the profit-making aged-care providers a waste of time.

TJN spokesperson Jason Ward told ABC News more needed to be done to unveil the opaque tax practices of these companies.

“Obviously a royal commission has more resources to get to the bottom of this issue than this committee had,” he said.

The Australian Taxation Office, which is investigating large provider Bupa, said the combined income of all for-profit providers was just over $5 billion in 2015-16, with a total profit of $529.3 million and after-tax profit of $402 million, the ABC reported.

Do you think the finances of companies receiving government subsidies to provide health services should be open to more regulatory scrutiny? Do you believe the new aged-care standards go far enough? How would you like to see providers held to account in order that aged care became a more palatable choice for the very elderly?

Related articles:
Inquiry into aged care flagged
Aged-care questions answered
Preparing for aged-care costs

Written by YourLifeChoices Writers

YourLifeChoices' team of writers specialise in content that helps Australian over-50s make better decisions about wealth, health, travel and life. It's all in the name. For 22 years, we've been helping older Australians live their best lives.

Leave a Reply

GIPHY App Key not set. Please check settings

Where is best in south-east Asia?

Three Cheese Pasta and Roast Potato Bake