First Review of Aged Residential Care Funding Model in 20 years

New Zealand’s aged residential care sector has transformed since the government’s funding model for residential care was put in place over 20 years ago.

Members of the Cross-Sector Steering Review Group

Members of the Cross-Sector Steering Review Group


While the aged population is growing steadily, the characteristics of people going into aged residential care have changed. People are going into care much later, at an average age of 85, and a high number have complex needs involving long-term conditions and disability related dependencies, requiring specialist or around the clock 24/7 care.

“The funding model for aged residential care must be fit for purpose and financially sustainable long-term to cope with the changing nature of the sector, so facilities can continue to provide effective, quality services,” said Chris Fleming, lead District Health Board Chief Executive for the Health of Older People, and Chief Executive of Southern District Health Board.


On behalf of the 20 DHBs and the Ministry of Health, TAS commissioned Ernst & Young to undertake a comprehensive review of the funding model, to see if it was keeping pace with the changes in the sector and would support future requirements. The focus was purely on the funding model ‒ the amount of funding was not considered in the Review.

Advice as the Review progressed was provided by a cross-sector steering group including representatives of aged care providers, consumers and unions as well as DHBs and the Ministry of Health. The steering group was co-chaired by Chris Fleming, and Keriana Brooking, Deputy-Director General, Health System Improvement and Innovation, Ministry of Health.

“At TAS, we were privileged to manage the Review, working closely with Ernst & Young and the cross-sector steering group,” said Jon Shapleski, TAS Programme Director, Health of Older People.

“The Review was a great example of partnership and collaboration across the entire aged care sector. It took eighteen months and involved extensive engagement with a wide range of people - from providers to residents to consumers.”

Jon Shapleski, TAS Programme Director, Health of Older People