Aged Care Reforms
From 1 July 2014 the following changes from the aged care reform package will take effect.
- Changed means testing in residential aged care;
- Disclosure of accommodation prices;
- New accommodation payment arrangements for residential aged care;
- Removal of the distinction between high and low care in residential care; and
- Removal of the “Extra Service Reduction” subsidy reduction
Changed means testing in residential aged care
A means-tested care fee will replace the income-tested fee. The means-tested care fee will be calculated using a resident’s assessable income and assets, and is subject to annual and lifetime caps. As at March 2012, the caps were $25,000 annually and $60,000 over a person’s lifetime. Residents who can afford to do so will pay a means-tested contribution to their care and accommodation costs, which will reduce the amount of government subsidy the home receives.
Disclosure of accommodation prices
Approved providers will be required to disclose maximum accommodation prices on their website as well as the Government’s new My Aged Care website. While the published price will be the maximum a resident can be asked to pay, accommodation payments can still be negotiated down.
Facilities will need to seek approval from the Aged Care Pricing Commissioner (ACPC) to charge accommodation payments greater than $550,000.
New accommodation payment arrangements for residential aged care
The current accommodation bond and accommodation charge will be replaced by accommodation payments.
- New residents will have more flexibility to structure accommodation payments as:
- A lump sum refundable accommodation deposit (‘RAD’);
- Periodic payments, also known as a daily accommodation payment (‘DAP’); or
- A combination of both RAD and DAP payments.
New residents will have 28 days after they enter a facility to decide how to pay for their accommodation. Providers will no longer charge retention amounts, which are currently deducted from lump sum bonds.
Removal of the distinction between high and low care in residential care
From 1 July 2014 the distinction between low level and high level residential care will be removed so there will only be one type of approval for permanent residential care. This enables anyone assessed as needing permanent residential care to access any residential care service that meets his or her needs.
Removal of the “Extra Service Reduction” subsidy reduction
Currently, where a care recipient is in an extra service place, the government reduces the subsidy it pays to an approved provider on a care recipient’s behalf by 25 per cent of the extra service fee. This is the extra service reduction.
From 1 July 2014, the government subsidy is no longer reduced based on the extra service fee and approved providers will no longer seek to recover this reduction from residents
People already in care on 30 June 2014 will not be affected by any of these changes and will continue under their current arrangements unless they leave care for more than 28 days (and subsequently re-enter care) or they move between services and choose to have the new rules apply to them.
To find out more about the reforms or to speak with one of our staff please contact Hill View House today.