Noose around aged-care providers’ necks getting tighter

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.

Aged care providers told to behave

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?



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    29th Nov 2018
    Don't even get me started. Lets start by examining the contracts which older Australians are forced to sign to enter an aged care facility. Anywhere else in society the company concerned would be hauled in front of a court and cut down. In this industry it is apparently fair to rob the aged as they will soon pass on. Disgraceful.
    If any industry required a Royal Commission this industry is one. The findings would make the banking RC look like an entree.
    29th Nov 2018
    It's a conspiracy to force the sale of homes and ensure the real estate industry and State Government get funding. the family may get some of the bond back but it's never the same as a house. Imagine if we charged bonds to access childcare or school attendance or any other service we need.

    Interesting the Coalition think it's all fine and no investigation of tax sorting needs to be examined. Typical.
    29th Nov 2018
    I have seen that they will intentionally not sell units after somebody has died leaving the relatives without the estate and needing to continue paying the high bills. I'd call that a cartel.
    Where is the ACCC when they need to do their job? NEVER TO BE SEEN. As usual.

    I would hope that the ACCC and ASIC have the cleaners put through them when Shorten gets in. It might be suitable for the club to milk people but it has to end.
    30th Nov 2018
    I've been anti privatisation through the past few decades. It seems wrong to use tax dollars to build something and then not collect the profit for the taxpayers. we now know there is less efficiency and more expense as well as job losses and skill destruction caused by privatising necessary goods and services.

    I read recently it sometimes costs Government twice as much in many cases for contracted services that were supplied efficiently and reasonably by the public service.

    Same with this aged care. We aren't talking hospitals but hostels with minimum wage staff.
    The charges and fees are excessive and gouging at families most difficult time when they are often desperate is despicable.

    No other Industry is allowed to charge excessive bonds like this. It is to force sales of homes.
    30th Nov 2018
    I worked for many years within varies government departments and bought things for these departments.
    As soon as the company knew you were buying items for a government department the price at least quadrupled [minimum]. Many times small things like a biro, that can be bought for 99c would be charged at $3.99 - we actually had one case where we were charged $5.99 for these pens. Once the contract is signed you can not go outside the contract to buy cheaper.
    We used diaries [one day to a page] for appointments for the year, we were charged $35 for this diary - the same one in the shops cost between $5.99 and $20 depending on where you bought it. Such a rort.
    We complain about how much pollies cost us, well we should also name and shame these companies - 99% of whom are foreign owned.
    30th Nov 2018
    Jaycee1 - you obviously didn’t do a very good job
    29th Nov 2018
    Why are taxpayers paying for the transition, rather than shareholders and proprietors?

    This is just another example of private profit at public expense. Surely it is incumbent on any business to provide an acceptable standard of service without taxpayers funding it.

    Return aged care to the voluntary and public sector where taxpayer support might be justifiable, since it is not heading for tax havens and bypassing the ATO.
    29th Nov 2018
    This is the biggest problem with privatisation of everything. Tax payer sponsorship increases and it costs far more than a public system providing the same service. Too many providers with CEOs offices, cars, etc and shareholders needing a return as well. Taxpayers should not be sponsoring private businesses ever in my opinion.
    29th Nov 2018
    Funny how ' the government has no place in business' rapidly becomes 'the government has a place in business when it comes to subsidies'.....

    Shows clearly the lies this great nation is based on.... and that's just me being blunt....
    Old Geezer
    29th Nov 2018
    We should not have any need for age care in an advanced society like we have today.
    29th Nov 2018
    Ummmmmmm.... errrrr.... yes.....

    **rolls eyes**
    29th Nov 2018
    Old Geezer - yeah everyone should be able to look after themselves fully until they die, all get up and go one day dead the next.

    What stupidity.
    29th Nov 2018
    I think Old Geezer might be referring to family helping keep older parents and relations at home until they die. If you don't have a choice maybe you need aged care, but most families today won't give up anything to help older family.
    Old Geezer
    29th Nov 2018
    Yes Greg that is what is going to happen to me. When I feel I can't look after myself I die. Simple.
    Fred Nerk
    29th Nov 2018
    "A further enquiry just a waste of time" ... Sure! Just like the banking RC!!!

    In our current society, it seems that only RCs can get to the facts.
    29th Nov 2018
    I totally endorse closer analysis and cracking down on tax evasions, care negligence, inhumane treatment and inhumane/illegal or just legal- contracts etc.
    And would go further, - Aged care is a profession, it should not be a skimp on everything and cut all corners investment target, - I would suggest total exclusion of big companies, one 'company' to one aged care facility only, and that aged care facility fully responsible for it's good conduct.
    Once you get a big company with multiple facilities, you have to pay for a much bigger bureaucracy high ceo bonuses and share holder dividends also, and the bottom line, Profit, becomes God.
    All evil flows therefrom, and our aged must bare the brunt of it.
    I also note OG's comment, and would add that my Aboriginal friends have virtually no old folk in aged care facilities, they take care of their elders and have them doing something useful and valued, however small.
    And when that person dies the whole community says goodbye and means it.
    29th Nov 2018
    Hmm - but the Kooris have a lower life expectancy - how many are non compos and in need of 24/7 care?
    21st Dec 2018
    Hi Lookfar - my Mum chose to be in a Retirement Home, didn't like the fact that would have to put up with her 2 children's then young normally very active 4 grandkids + their dogs/cats & especially b/c I minded my grandkids often/nor our many family & friends catch-ups/parties/celebrations....she just wanted "peace" ie: no responsibilities. Her choice - not mine.

    29th Nov 2018
    $50 million for transition?!!, these bastards should already be meeting these standards without any further money. And what about enforced patient staff ratios; this is where the appalling standard of care falls down the most. Seems the govt is only really interested in raking in more tax. I'll check out before ever entering one of these hell holes! The majority of age care should not be privately operated only for obscene profits.
    29th Nov 2018
    Yes, trood, BUPA has had some shocking write ups over the years but doesn't seem to have taken any notice of them.
    29th Nov 2018
    Yes Mick greed is the main motivation that is now driving our society.Our so called advanced society is now advancing backwards.
    21st Dec 2018
    Yep....sad for our kids/grandkids.

    29th Nov 2018
    "The Government is distributing $50 million to residential aged-care providers to help them transition to the new standards in the next six months."

    Have no fears, O Ye Aging Population! We're hot on their tails and handing them $50m to help!!

    29th Nov 2018
    I'm re-reading the seminal book 'Intervention and Revolution' by Richard K Barnet, first published in 1968.... it is amazing how many of the things he discusses as regards the 'underdeveloped countries' are now commonplace here in Oz - a clearly 'underdeveloped country' with little to no genuine industry infrastructure but the classical 'banana republic' shipping of ore - along with all the same problems and even much of the same language as now used by the opponents of the 'global economy' and social disparities.

    Astounding really.... good reading, especially for those who do not yet believe we are 'Third World' and rapidly going downhill.
    29th Nov 2018
    Yes, Trebor, stand in line to pull our belts in another notch because government will cut pensions and give the cuts to aged care providers.

    29th Nov 2018
    I wonder what percentage of aged care facilities are causing the problems. I realise that there should be none but we keep hearing comments that suggest that all aged care facilities are not doing the right thing by their patients when there are many aged care facilities which are running extremely well. We have had first hand experience with aged care in respect of aged parents and the facilities that cared for them in their latter days was exemplary. The staff were very caring and medical services were called in when needed. There are too many critics out there with generalisations and no specific cases which is clouding the issue.

    Moving on to the above article which, I feel, is misleading when the subject of taxation is raised. The first paragraph stated that there was a concern with "alleged tax evasion". Then we move down to the third paragraph which commented that the providers were "allegedly engaging in tax avoidance and tax minimisation". Can those who prepared this article please learn the difference between avoidance and evasion. Evasion is illegal and avoidance is not. If anyone has any problem with avoidance, it's not those who are preparing the tax return that should be blamed, it's the government that allows those deductions and loopholes to be exploited.
    29th Nov 2018
    The big and endemic problems do seem to be around a few providers.... worse than the others.

    " Evasion is illegal and avoidance is not. If anyone has any problem with avoidance, it's not those who are preparing the tax return that should be blamed, it's the government that allows those deductions and loopholes to be exploited. "

    Hence my argument that some of the rules need to be changed to encompass the 21st Century and reality. When you have companies campaigning to have a vote in elections, they should happily be paying the same tax with the same allowable deductions as the ordinary voter........ in a dream......
    29th Nov 2018
    Yes Old Man, I agree that most feel that avoidance and evasion are the same thing, but the Govt, despite overwhelming evidence disagrees, - I can only imagine due to corruption, - once levelled as a reason our Asian neighbours were having such a bad time but now so thoroughly esconced in Australia it might require some thing even stronger than a royal Commission to root out and expunge.
    Corruption is a parasitism that may seriously weaken it's host, and even kill it, but history teaches us that removal of that particular parasite leads to a much healthier and happy People/Country. Let's fight it, the more we fight it the weaker it will get.!
    29th Nov 2018
    Most PAYG workers are forced into paying tax because their bosses submit it. Millions earn so little the taxpayer has to subsidise them if they have a family. The rest minimise, and avoid for all they are worth on the basis of why should I pay for other people.

    A whole industry is dedicated to helping people not pay tax.

    You only have to look at the tax amounts paid by workers. vs business to see who the lifters and leaners are. Business wants to make money without obligation to either the community or their customers these days. There will be a lot go broke if they keep it up and deserve no sympathy when they do.
    Joy Anne
    29th Nov 2018
    Also the for profit health funds which have not delivered what they state.
    21st Dec 2018

    29th Nov 2018
    Government subsidies dont work
    Get rid of all subsidies.
    It's this socialist nonsense that distorts and destroys with the elegant workings of the free market
    29th Nov 2018
    (S) Lothario, you need to take off you goggles and look around, there has arguably not been a free market for 40 years, - some would say 100.
    Certainly the current situation where .01% of the worlds population, - basically 56 families I am told, own over 90% of all the worlds wealth is not conductive to a free market, if that is what we want.
    Would you care to explain how you are going to prise all that wealth out of those greedy blind hands and free up the market?
    29th Nov 2018
    Lothario your comments are always good for a laugh.
    29th Nov 2018
    Thats because you don't understand good economics and so brainwashed by leftist socialist garbage
    21st Dec 2018
    Agree Mick - my dear old Mum when 84yo decided she wanted to go into a Health Care Resident I drove her ard to visit many for next yr & her chosen one had a 12mths waiting list. The one she chose was small, only 30 residents in motel type rooms, nice. All good when visited her twice wkly altho' bit pis*ed off during meal times to see the child-like little lunches/dinners served to 'em all/complained, & Mum's meals a bit larger thereafter. Was far more distressed when my adorable Mum (widowed @ 61) had more than a few bruises on her body many times during my visits - asked here why but couldn't remember altho' named a staff member that she really didn't like, adding that all others were "nice." When persisted for Mum to tell my why she didn't like this particular staff member she finally told me (was afraid that that this female wouldn't be happy/much more of a problem for her) that when she didn't feel well/want to get out of bed, that staff member forceably dragged her out - knowing my Mum, she would have struggled. Their entrance fee was 6figure+++fee but OK as could afford it after helped her sell her Unit however they kept increasing their mthly fees well over expected/CPI. It's definitely time for a RC for all Aged Care facilities, think may be more shocking than the Banks.

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