Rural council pleads for Federal help as it loses $400,000 per annum in aged care

A rural council in New South Wales has pleaded for urgent Federal support for aged care facilities in rural areas after revealing it’s losing more than $400,000 per annum to care for an average of 14 residents.

The 16-bed Gummun Place Hostel is located in Merriwa, a small town in the Upper Hunter Shire. Dubbo is just over two hours’ drive to the west, while Newcastle is almost two and a half hours’ drive to the east.

With the council-owned facility facing increasing financial pressure, Upper Hunter Shire Council Mayor Maurice Collison has written to the Federal Minister for Health and Aged Care Mark Butler for immediate and ongoing assistance to prevent further closures and financial losses in rural aged care. 

His letter also cc’d the Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King and the Member for New England – and former National Party leader – Barnaby Joyce.

“I write to you to advise of the serious plight of small rural councils responsible for operating aged care facilities. These facilities are no longer able to be sustained by councils and the increasing cost of meeting compliance is unsustainable,” Mayor Collison said. 

“This week we have seen closure of an aged care facility in a neighbouring LGA and my own Council has called for expressions of interest to lease, operate or purchase our own small 16-bed facility at Merriwa (Gummun Place Hostel).

“Council is losing upwards of $400,000 per annum on this facility to accommodate on average 14 residents.”

Mayor Collison expanded on just how damaging those losses are when he explained the annual residential and business rates from the entire town of Merriwa are less than the loss of Gummun Place Hostel. 

“We can not continue to subsidise 14 residents with the entire rate income from the town and also provide essential services such as libraries, swimming pools, sports facilities and the like that normal country towns need for health and well-being,” he added.

“The Federal Government has been lax in its reluctance to assist and support local Councils maintain these facilities and unless urgent and continual support is received from the Federal Government then there is concern that this facility will no longer be able to be operated by Council.”

The neighbouring facility he referred to is Mercy Services’ Singleton residential aged care home. The organisation announced its closure in October and said the facility is likely to shut in the first quarter of 2025 due to losses of between $200,000 – $300,000 per year. 

The Singleton facility has an overall star rating of four stars with compliance and quality measures both holding five-star ratings. Residents’ experience is rated four stars and staffing two stars.  

It achieved its minimum target of 210 care minutes per resident per day and was just one minute short of its 40-minute registered nurse target.

A potential ownership change fell through while a rebuild of the 42-bed home would allegedly need to accommodate 100 beds for it to be economically sound. A $40 million-plus price tag for this build is not possible for the rural operator. 

“The decision to close the Singleton facility follows years of financial difficulties due to the home’s small scale, the changes in regulations that have made it increasingly difficult for small charity-based operators to remain viable, and the ever-increasing cost of maintaining and upgrading a building that was built for a different era,” Mercy Services said via a statement. 

All residents are to be relocated, although they are reportedly not leaving without a fight. Care planners from My Care Path will assist in finding new homes for residents if the facility cannot be saved. 

The organisation, which also provides home care services to the region from a Newcastle location, plans to transfer its Home Care and Community Transport businesses to another service provider. Its Alcohol and Other Drug service will be transferred to MacKillop Family Services.

As for Gummun Place Hostel in Merriwa, the Upper Hunter Shire Council will issue expressions of interest to lease, operate or purchase the residential care home to help secure its long-term viability. 

The site has an overall star rating of three stars with a perfect score for residents’ experience and four stars for compliance. 

Staffing is rated one star. The home exceeds total care minute targets by over two hours per resident per day, although it is nine minutes below its registered nurse target. Meanwhile, quality measures are rated one-star, although it has achieved a five-star rating within the last 12 months. 

Elsewhere, Minister Joyce has responded to the Mayor’s letter, criticising the Government’s alleged lack of support for regional Australian aged care homes. 

“It shouldn’t take a city postcode to get basic aged care. But here we are – Labor seems to think the regions are out of sight, out of mind. People in the New England deserve the same care as those in Sydney, and it’s time the Federal Government realised that. If they don’t step up soon, we’ll keep seeing rural facilities shut down, and families left high and dry,” he said.