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Aged Residential Care funding model review

Around 33,700 people per year require aged residential care in New Zealand. This number is anticipated to increase to 58,000 people over the next thirteen years.

Whether they can no longer manage in their own homes, have dementia or require hospital-level support, a growing number of people will need aged residential care.

A review of the existing funding model for aged residential care is underway. Under the guidance of a cross-sector Steering Group, and led by Ernst & Young, the Review will look at alternative funding models for aged residential care. The Review will work extensively with aged residential care providers, older people, the aged care workforce, consumer bodies, clinicians and government.

How to get involved

If you’re an aged residential care provider, DHB, interested group or individual, or consumer of aged residential care services keep up to date with the latest information on the review, and find out how you can get involved, below.

Provider and consumer forums took place in July 2018. We’ll publish the findings from the forums here. Everyone will have the opportunity to put forward their views on the funding model review, via a website survey, this August.

I am an aged residential care provider or DHB

Half-day workshops took place around New Zealand this July, with participants identified through sector membership organisations and DHBs. Further forums will be held in October and November 2018.

I am part of an interest group, an interested individual, or consumer

How to get involved:

If you want to sign up to receive updates, contact us: info@tas.health.nz 

Let us know your name, organisation, phone number and email.

Everyone will have the opportunity to put forward their views on the funding model review, via a website survey. This will be available in August.

Why a Review?

The current funding model was created nearly twenty years ago. Questions have been raised by the sector and others as to its relevance and whether or not it is fit for purpose. We’re looking at the relevance of the model in both the environment today, and as we plan for anticipated future growth in the aged residential care sector.

 “The existing funding model was developed in the 1990’s and while fit for purpose at the time, has failed to keep pace with the changing needs of the resident population.”

Chris Fleming, DHB Lead Chief Executive for Health of Older People

What the Review will cover

The Review will examine the existing funding model, along with its strengths and weaknesses. The Review will look at policy and funding relationships between aged residential care providers and health services such as general practice, pharmacy and allied health services. The Review will then develop and prioritise future funding model options.

Aged Residential Care facts

  • DHBs currently spend about $1 billion per year on long-stay aged residential care. Aged care residents contribute a further $0.8 billion towards the costs of their residential care – excluding any premium charges or other financial arrangements paid directly to aged care providers. 
  • Around 1 in 6 older people live with one or more long-term conditions.
  • While people are living longer, the proportion of their years spent living with some form of disability-related dependency is increasing.
  • Maori and Pacific Peoples tend to spend a greater period of their lives with a disability-related dependency, but are less likely than older New Zealanders to live in an aged residential care setting
  • There were 607,000 people aged 65 and over in 2013. This number is expected to grow to 1.6 million by 2063.
  • The proportion of older New Zealanders living in aged residential care has been decreasing over the past 10 years. Nonetheless, with significant population ageing, the number of aged care residents is expected to increase by up to 72% from now until 2031.

Related links

  • ARC demand planner: View our Demand Planner for District Health Boards, residential care providers, and any other interested parties to use to predict future demand for Aged Residential Care services.
  • Healthy aging strategy: A Ministry of Health publication presents the overarching direction and action plan for the next 10 years, in regards to the health and wellbeing of older people.
  • NZ Health Strategy: The New Zealand Health Strategy sets the direction of health services to improve the health of people and communities.
  • Improving the lives of people with dementia (Ministry of Health, 2014)

Further information

Media contact: Jana Keir, Senior Communications & Engagement Advisor, TAS jana.keir@tas.health.nz, 027 202 0676.

General enquiries contact: info@tas.health.nz