THE Department of Health is under pressure to respond to allegations that it instructed Seymour Health to draw from unallocated funds, including money set aside for staff leave entitlements in a bid to reduce its operating deficit.
The claim was aired during Seymour Health’s annual general meeting, which was open to the public, on December 1. The allegation was revealed by The Age after it received audio from a community member who recorded the meeting.
The Age reports that in the recording, Seymour Health’s finance, risk and audit committee chair Laura Jeffery said the hospital recorded a $1.3 million deficit in the 2024/25 financial year after reporting an “approximately balanced budget” the year before.
Ms Jeffery went on to say that the deficit was due to higher staffing costs after vacant positions at the hospital were filled, and that while the hospital had in place a financial performance improvement plan, “the big headline is we’ve had insufficient funding from the Department of Health”.
“Moreover, they’ve explicitly advised us that we’re required to fund our deficit through draw-down, or use of our untied funds,” Ms Jeffery said in the recording.
“I wanted to convert this into plain language: untied funds, as the Department of Health’s definition, include funds that we’ve set aside for staff and employee liabilities, like annual leave, sick leave, long-service entitlements.”
Audience members reportedly expressed concern about whether the health service would be able to meet future leave obligations, particularly in the event of natural disasters, given that Seymour has experienced significant flooding in recent years.
The matter has also since drawn political reaction, with Nationals Member for Euroa Annabelle Cleeland describing the situation as “deeply alarming for regional patients and health workers”.
In a statement, Ms Cleeland said the allegations confirmed fears “that Labor’s health funding failures are now being pushed directly onto hospitals and their staff”.
“These are not spare funds. These entitlements belong to nurses, doctors and healthcare workers who have earned them,” she said.
“Using them to prop up Labor’s broken budget is completely unacceptable.”
Shadow Minister for Health Georgie Crozier said the allegations highlighted a wider crisis across the state’s health system.
“This Government can deny it all it likes, but the reality is hospitals are under extreme pressure, and this situation at Seymour Health is a warning sign for what may be happening right across the state,” she said.
“We want to know how widespread this practice is, how many hospitals are in the same position at Seymour and exactly what services are now at risk because Labor will not properly fund our health system.”
Due to publishing deadlines, Seymour Health and the Department of Health did not respond to comment requests in time for publication. The digital version of this article will be updated if the North Central Review receives further responses.
Seymour Health has since responded to our request for comment. Their response is noted below:
“Hospitals Victoria did not provide any guidance or directive to indicate that employee entitlements are tied funds,” they said.
“There has been no change to the way hospitals treat employee entitlements.
“Seymour Health has since confirmed that they ‘can and will meet any and all obligations related to the payment of staff entitlements and that there is zero risk that staff superannuation, annual leave, ADO and/or LSL payments will not be made as they come due.’
“Of Victoria’s 76 public hospitals, Seymour Health was the only health service to request a letter of comfort related to untied funds and debt in 2025-26.
“There has been no change to the treatment of employee entitlements and the reporting or forecast cashflow where tied funds are reported.
“Hospital Victoria monitors cash and the Statement of Priorities operating result closely, partnering with each health service to ensure appropriate use of Victorian Government funds, ensuring all obligations are met and care to Victorians is delivered by the world class health care system.”