Ombudsman Finds Aged Care Funding Algorithm Neither Fair Nor Consistent, Calls for Human Override

Commonwealth Ombudsman Iain Anderson has found that the algorithm used to assign home-support funding to older Australians lacks safeguards and has produced unfair outcomes, and says the law should be changed so senior assessors can override it when it gets decisions wrong, ABC News reported on October 26. In a report of more than 100 pages, he concluded that the Department of Health, Disability and Ageing’s administration of the assessment scheme and the algorithm had been unreasonable.

The classification algorithm launched on November 1 last year as part of the government’s aged care reforms and decides the level of funding people receive to stay at home with support rather than move into residential care. Appeals against its decisions have run at more than five times the previous year’s level. According to the report, the department put the algorithm in place without any meaningful risk assessment, evaluation or analysis despite the obvious risks of deterministic automated decision-making. Tests had been run on an original version created by a consultancy, but the version in use was modified by the department and never externally validated. The department told the ombudsman it does not accept that characterisation.

Anderson also found the department had wrongly advised assessors that outcomes could be changed, when neither the Act nor the rules provided a mechanism to do so. He recommended that the Australian National Audit Office consider auditing the Single Assessment System and the Independent Assessment Tool, the questionnaire that drives the algorithm.

What it means in practice

Of 10 recommendations, the government accepted six, including a comprehensive review of the Aged Care Act as it applies to assessments and public consultation before any amendment. The first two, legislating a human override and amending the aged care rules, were only noted. Instead, parliament last week passed an escalation pathway for appeals in exceptional circumstances, with a review of the system due in the first half of next year. The case adds to a growing local record of automated tools that save time but create new errors, from Tasmania Police’s report-writing trial to AI rental screening heard by a South Australian inquiry.

Health Minister Mark Butler and Aged Care Minister Sam Rae said the government would consider the report carefully and was already acting on many of its recommendations. The stakes are large: more than a million people, or 85 per cent of aged care users, receive services through home support.