Cessation of the Dementia and Severe Behaviours Supplement

Today I announce that I have taken the decision to cease the Dementia and Severe Behaviours Supplement.

The Supplement will cease from 31 July 2014.

As I explained at Budget Estimates recently, the Supplement was introduced by the previous government as part of the aged care reform package and was designed to provide additional resources for providers who give care to people with severe behavioural and psychological symptoms of dementia.

Unfortunately the Supplement has not operated as anticipated, having gone well beyond the budget allocated to it by the previous administration.

The previous government estimated that 2,000 people in residential care would be eligible for the Supplement. As at March 2014, 25,451 people were receiving the Supplement.

This represents a 12-fold blow out in the eligibility estimates of the previous government.

The Supplement was budgeted at $11.7 million for this financial year. Instead, it is anticipated the cost in 2013-14 will be around $110 million.

Based on these figures, there will be almost a ten-fold blowout in expenditure.

According to projections from the Department of Social Services, if current claiming patterns continue, the $16 a day Supplement will cost the government $780 million over the four years from 2014-15 rather than $52 million, and over $1.5 billion over ten years.

It has become clear to this Government that the legacy of our predecessors is one of poor policy execution leading to unintended consequences. This Supplement is emblematic.

I have taken this decision after consulting with the Aged Care Sector Committee and other experts.

There was no other responsible course of action in the circumstances.

This is not a problem of the Government’s making, but it fell to us to address the situation.

The Government is committed to working with aged care providers and consumers in the support of people with severe behavioural and psychological symptoms of dementia.