The Aged Care Association's members care for about 800 under 65 year olds with disabilities. Photo: 123RF
The Aged Care Association is warning some resthomes may be forced to stop caring for people with disabilities after a freeze in funding from Whaikaha, the Ministry of Disabled People.
Minister for Disability Issues Louise Upston earlier this month announced a shake-up for Whaikaha following an independent review of the organisation.
That included a freeze on funding for residential care facilities that look after disabled people - pending a separate urgent review of contract and pricing models.
The Aged Care Association's members care for about 800 under 65 year olds with disabilities, and the government funds them to do so.
Chief executive Tracey Martin said it recently negotiated a 3.2 percent funding uplift from Te Whatu Ora.
Historically, Whaikaha matched Te Whatu Ora's rates, but the funding freeze meant that would not happen, she said.
"They have frozen any recognition of the increase of costs for the care of these younger people inside aged residential care facilities," she said.
Funding was already tight - Te Whatu Ora's contribution did not cover costs, she said.
"[The care homes] can't carry this loss any more for the government, because that is who they are providing this service for.
"These New Zealanders need this level of care, the government has asked these businesses to provide this level of care, the businesses have expectation that they will be remunerated at an appropriate level to cover their costs, and that is not happening."
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Martin has written to Whaikaha and the minister, asking them to reconsider.
If they did not, the association would seek legal advice about its members pulling out of providing the "underfunded" services, she said.
But Cabinet has already signed off on the decision to freeze funding.
Whaikaha said the current funding levels would be maintained until the urgent review was complete.
"The Independent Review found costs for residential care have increased faster than inflation from $706 million in 2015/16 to almost $1 billion in 2022/23," it said.
"It also found it was unclear how provider costs were being monitored and controlled, which is why the urgent review is required."