Aged Care Provider Faces Strain Under Labor’s 24/7 Nurse Rule, Cuts Services by 10 Percent

An older women wears a face mask as she crosses a street in Sydney, Australia, on May 6, 2021. Mark Metcalfe/Getty Images

A not-for-profit aged care provider has said the mandatory requirement of having registered nurses on duty 24/7 reduced its capacity by 10 percent.

At a recent Senate inquiry hearing, Trevor Johnson, the CEO of the Eyre Peninsula Old Folks Home, warned that rushed government regulations often adversely impact service providers.

He gave the example of the 24/7 registered nurse responsibility policy, which was introduced by the Albanese Labor government and took effect in July 2023.

Under the policy, aged care providers must have at least one registered nurse available 24/7 in each facility to provide timely assistance to residents.

While the policy was in line with recommendations from the Aged Care Royal Commission, it caused a number of service providers across the country to close down due to a lack of staff.

“We reduced our capacity by up at least 10 percent for a period of time,” Johnson said.

“You either reduce the number of people you’re servicing, or you get more nurses.

“If you can’t get more nurses, you’ve got to reduce the number of people to make that ratio a bit easier to manage.”

The new requirement also imposed additional operation costs on Eyre.

Johnson said his organisation spent at least $888,000 (US$593,000) to provide the mandated 24/7 coverage.

To pay for the additional expense, Eyre had to dip into the savings it had set aside for major facility refurbishments.

“Every resource we divert to an unreasonable rate of change reduces our ability to enhance our offering,” Johnson said.

“We’re not a big government agency that the government can just throw money at.

“We get the money the government gives us, and we’re not for profit. We don’t have other income sources, and every upgrade we would do would actually enhance the well-being of our residents and increase our capacity.”

The Uncertainty of Government Funding

At the same time, the CEO raised concerns about the uncertainty of government funding.

He said that when the government introduced new policies, aged care providers like his were supposed to receive the corresponding resources to adapt to them.

However, Johnson noted that the funding was barely enough for his organisation to maintain operations.

“When the government is thinking about new initiatives, they should be providing some one-off funding to fund how we adapt,” he said.

Johnson also stated that the government should develop the systems itself and provide training for service providers rather than having providers develop those systems themselves.

“There’s a number of funding issues that need to come out in the future,” he said.

“We need more [funding], but I can’t tell the government exactly how much we want because the model keeps changing.”

According to the latest federal budget, aged care services are currently the government’s fourth largest expense, estimated at $36.2 billion for the 2024-25 financial year.

The budget also forecasted that aged care costs would grow by an average of 5.7 percent per annum between 2024–25 and 2034–35.