ACFA Work Plan & the Higher Accommodation Supplement 1

Aged Care Financing Authority (ACFA) Independent Statutory Committee Provides transparent advice on funding and financing of aged care sector Independent Chair, complemented by 7 members with industry expertise 2

ACFA’s Forward Work Program Reform Monitoring Project Factors Influencing the Financial Performance of Aged Care Providers Project Advice on cost neutral mechanisms to ensure access to care for supported residents Annual Report on the Funding and Financing of the Aged Care Sector. Input into the Review of Changes to Aged Care 3

Reform Monitoring Monitor the impacts of the 1 July 2014 financing reforms ACFA is collecting information on a voluntary basis from providers on: o the numbers of bonds held and their value at 30 June 2014; o the numbers of bonds and RADs and their value at the end of each subsequent month; o the numbers of RAD, DAP and combination payment options chosen by residents each month Consider impact on rural, regional and remote providers Reports avail on ACFA’s page of DSS website 4

Highlights from Reform Monitoring report for December 2014 Consumer choice of accommodation payment 41% Refundable Accommodation Deposit (RAD) 36% Daily Accommodation Payment (DAP) 24% combination of RAD and DAP components Overall lump sum accommodation payments increased by 6.1% from June to November At that rate the total is projected to increase by $3.2 billion this financial year Residential care admissions returned close to pre-May 2014 levels May-June 2014 higher than normal permanent admissions July-September 2014 lower than normal permanent admissions, while respite admissions were higher than normal 5

Factors Influencing the Financial Performance of Aged Care Providers Undertake a detailed study into the factors influencing the financial performance of aged care providers Initial focus is on residential aged care providers with expansion to home care providers in 2015 Initial report due to Government by 30 April

Advice on cost neutral mechanisms to ensure access to care for supported residents Facilitating access to care is one of the objectives of the Aged Care Act 1997 Mechanisms currently used to support this: o Accommodation supplement o 40% rule o Regional supported resident ratios The Supported and Non-Supported Resident Data Book was presented to Minister Fifield on 30 April 2014 Final report is due 31 December

Annual Report on the Funding and Financing of the Aged Care Sector ACFA’s 2014 report concluded the residential aged care sector will need $31 billion in investment over the decade to to provide an additional 76,000 aged care places The 1 July 2014 reforms are likely to be overall beneficial to the sector Feedback from the finance sector is that the removal of restrictions on accommodation payments is having a positive impact on investment 8

Input into Review of Changes to Aged Care Minister is required to establish an independent review into the Aged Care Reforms Review must be undertaken in ACFA is considering the advice it will provide to the review 9

The Higher Accommodation Supplement Introduced 1 July 2014 Encourage additional capacity and enhanced quality of accommodation for care recipients Paid to newly built or significantly refurbished facilities 10

Accommodation Supplement Amounts Payable Accommodation supplement: Payable on behalf of all eligible residents. The maximum level of the higher accommodation supplement is $53.39 (March 2015 rate) For other services that are not newly built or significantly refurbished, the maximum level of accommodation supplement is $34.79 (March 2015 rate) Reduced by 25% if, on a given day, the service does not meet the ‘more than 40% rule’. 11

Relevant Legislation The Subsidy Principles 2014 The Aged Care (Subsidy, Fees and Payments) Determination

Accessing the higher accommodation supplement Newly built services Automatically qualify for a higher level of accommodation supplement. No application is required. Significantly refurbished services Application required. Services must apply for a determination that the service is ‘significantly refurbished’: Completed refurbishments (Standard application) or Future refurbishments (Pre-approval) 13

‘Significant refurbishment’ – eligibility criteria Completed on or after 20 April Cost of the refurbishment must at least equal a minimum monetary spend amount calculated on the number of care recipient’s rooms in the facility.  Cap on expenditure relating to fire safety improvements: 25% of minimum monetary spend amount The relevant costs must be capitalised in accordance with Australian accounting standards. 14 Minimum monetary spend amount = 40% × total number of care recipient’s rooms × $25,000 Note: The ‘total number of care recipient’s rooms’ is the lower of either the number before the refurbishment or after the refurbishment

‘Significant refurbishment’ – eligibility criteria Significant improvements and upgrades which directly benefit residents, particularly residents who qualify for assistance with their accommodation costs. Provides benefits for at least 40 per cent of residents (e.g. having a refurbished bedroom) or an extension to the facility must have increased the total number of care recipient’s rooms by 25 per cent. Proportion of the total number of care recipient’s rooms available to residents who qualify for assistance with their accommodation costs must not have been reduced after the refurbishment. 15

Guidelines for applying for the higher accommodation supplement The Guidelines are available on the DSS website to assist service providers in assessing their eligibility as a significantly refurbished facility and in completing the application form/s The Department has 60 days from the date of receipt of an application to make a determination Where there is insufficient information to make a determination, a request for information may be issued The service provider has 28 days to respond to the request for information, but may apply for an extension if needed The 60 day time-frame does not include time taken to respond to a request for information 16

‘Significant refurbishment’ – eligibility criteria most often not met Benefits for eligible residents The refurbishment (or proposed refurbishment) provides significant benefits to residents who qualify for assistance with their accommodation costs. Minimum required benefits The refurbishment (or proposed refurbishment): a) results in at least 40 per cent of residents having a significantly refurbished care recipient room); or b) provides a significant benefit to at least 40% of care recipients; or c) consisted of an extension to the facility that must have increased the total number of care recipient’s rooms by 25 per cent. 17

Key statistics – 2 April significant refurbishment applications had been received (321 Standard and 131 Pre-approval). 354 Standard or Pre-approval applications had been processed with 79% of applications approved. 80 newly built services had been identified as opening since 20 April ,043 – estimated number of additional care recipient rooms in refurbished services. 18

Further information Forms for applying for the higher accommodation supplement Guidelines for applying for the higher accommodation supplement Fact sheet – Claiming the higher accommodation supplement Frequently Asked Questions All are available on the Department’s website: responsibilities/ageing-and-aged-care/aged-care-funding/higher- accommodation-supplementwww.dss.gov.au/our- responsibilities/ageing-and-aged-care/aged-care-funding/higher- accommodation-supplement Enquiries: 19

Questions? 20

Thank you 21