What are funding structures?
Funding structures are the mechanisms by which Australian aged care providers receive and spend funding. This funding is primarily from the federal government. However, residential care recipients are also required to contribute up to 85% of their aged pension for their care based on income and asset tests. [1]
How are funding structures barriers to rights-based care?
Funding structures act as a major systemic barrier to rights-based care by shaping staffing, care quality, autonomy and equity. The evidence shows this occurs through several interconnected pathways.
Funding levels consistently determine staffing levels, which in turn affect workers' ability to uphold residents’ rights. Chronic understaffing is widespread and linked to inadequate funding. Staff shortages lead to rushed, task-focused care, which means that rights like dignity, privacy and choice are neglected (e.g., choice of food, when to eat, activities and when to shower). Time pressures mean staff prioritise efficiency over residents’ preferences and autonomy. [2-4]
It has been demonstrated that for-profit providers typically have fewer staff and prioritise cost minimisation. This marketisation creates incentives to extract for profit rather than invest in quality care. Financial pressures push organisations to focus on efficiency and cost-related outputs rather than holistic rights-based care, which requires different approaches to measure effectiveness. [5-8]
Funding inequities can create unequal rights outcomes. As a result, less resourced facilities (often serving minority groups) may end up providing poorer quality care. Public or state funded homes experience more severe staff and resource shortages. Socioeconomic and racial inequities tend to be reinforced through funding distribution. [6, 9, 10]
Older persons who face financial and digital literacy challenges experience barriers to participation. Complex funding models can obscure information about available options and limit aged care consumers' access to genuine choice. Older people may have difficulty navigating administrative complexity, and they may find that there are ‘hidden fees’ that can reduce available care funds. Providers may not present information clearly, and as a result, they may restrict informed decision-making. Hidden costs and funding complexity can also reduce consumer control. [11, 12]
Funding constraints also negatively impact workforce skills and support. Low wages, insecure work and poor training reduce staff capacity. Insufficient investment in skills that support person-centred approaches (e.g., dementia care) limits rights-based practice. Unsafe working conditions may be normalised under cost pressures. [5, 9, 13]
How are funding structures enablers of rights-based care?
Funding is a critical enabler of rights-based care when it is intentionally aligned with human rights principles. Adequate funding supports dignity, autonomy, equity and participation in both policy and everyday care practices.
Sufficient funding is a foundational enabler because it allows services to provide the conditions necessary for care that upholds dignity and autonomy. Achieving rights such as privacy and sexual expression requires investment in adequate staffing ratios, appropriate training and environmental design that upholds rights, rather than physical layouts focused on efficiency. [14] Read more about rights-based approaches to sexuality, staff training and environmental design.
Investment in staff education is critical to embedding rights in everyday care. It builds workforce capacity for enabling rights-based care. Funded training programs can shift staff attitudes and practices so that residents’ rights (e.g., intimacy, autonomy) are prioritised.
Funding is also an enabler of equity-focused approaches that reduce discrimination. Fair distribution of funding and resources across the system is essential for achieving non-discrimination. A rights-based funding approach actively addresses inequalities (e.g., by ensuring adequate, high-quality, culturally appropriate services in regional areas and for Indigenous communities) and prioritises vulnerable populations. [15] Equitable allocation of money, power, and resources is central to eliminating discrimination and realising human rights. [16]
Additional structural measures to ensure rights-based care include independent monitoring visits, structured monitoring protocols, effective complaints pathways, and regulator follow‑up on recommendations. [17] As a last resort, litigation and settlement agreements may act as deterrents and provide redress for consumers and their families. [2] Systems must adequately fund these measures to ensure their effectiveness.
Funding is also required to support accountability‑based care that involves monitoring, auditing, and compliance, coupled with partnerships with service users and families. [16] Also, there must be regulatory reforms that strengthen governance obligations and codes of conduct for persons who control funding and its distribution, to ensure funding is used appropriately. [18]
Funding enables person-centred, relationship-based care. Providing rights-based care requires time, staff and resources to know the person and meet individual needs. Providing person-focused support, meaningful engagement, and understanding of individual needs requires sufficient staffing and resources, which depend on funding. Additional financial support allows one-to-one care and tailored interventions, especially for people with dementia. [19]
Funding becomes an enabler when it is deliberately aligned with human rights principles, where it can support systemic change. A human-rights-based approach depends on fair distribution of resources and political commitment, embedding rights into system design. [16]
What can be done?
Improve regulatory structures
Policy makers:
- Link funding to rights-related outcomes such as staffing.
- Invest in equitable funding distribution for rural and minority populations.
- Fund workforce development and system redesign, such as training and staffing ratios.
Organisations:
- Prioritise staffing and skill mix using available funding.
- Embed transparency and clarity about financial requirements to support consumer empowerment.
- Shift from task-based to person-centred care models and ensure quality indicators align.
Aged care leaders:
- Advocate for and strategically use funding to uphold rights by investing in rights-based care.
- Build a rights-based culture through staff education.
- Strengthen accountability and continuous improvement through monitoring of care and the complaints process.
The evidence:
- Funding tied to staffing levels, quality-of-life indicators, and compliance with human rights standards addresses underfunding, weak oversight and profit-driven compromises. [5, 6, 15]
- Allocating resources to underserved, rural and minority populations can reduce structural inequalities in care quality. [10, 16]
- Supporting training, staffing ratios and infrastructure improvements can enable dignity, autonomy and person-centred care. [3, 14]
- Allocating resources for adequate staffing levels and training can reduce rushed care and improve rights-based practice. [5, 6]
- Ensuring clear pricing, reducing hidden fees and providing accessible information can support informed choice and autonomy. [12, 15]
- Using funding to support flexible routines, meaningful activities and environments that can promote dignity and participation. [4, 19]
- Directing resources toward staff time can support relationship-based care and enable autonomy. [3, 13]
- Investing in staff education and models of practices that prioritise dignity, respect and self-determination can support rights-based care. [14, 19]
- By monitoring care quality, responding to complaints and ensuring rights are actively realised in daily practice, rights-based care is supported. [11, 15]
Want to learn more?
ARIIA has additional information and free resources on how your organisation can operationalise rights-based care. Read more about Strategies, interventions and models to embed rights-based care.
The Aged Care Code of Conduct provides information on how providers, their boards, and employees must treat people accessing funded aged care services.
Financial & Prudential Standards: these are the financial standards providers must comply with to meet their obligations and maintain their registration.