Aged Care Reforms Overview May 2014

If you do not change direction, you may end up where you are

heading

Caring for Older Australians

Reducing red tape

Quality care for consumers

What Reforms?

Changes to legislation Home Care Packages Programme New supplements MyAgedCare and call centre Australian Aged Care Quality Agency Aged Care Pricing Commissioner

Achievements

2015Increased functionality – MyAgedCare

Commonwealth Home Support

CDC for all Home Care Packages

2014Accommodation prices published on MyAgedCare

Changes to fees and subsidies

Removal of high/low

Reforms going forward

Only permanent residential aged care

This distinction currently affects:• conditions of allocation for residential aged

care places;• care approvals;• resident classifications; and• residential aged care accommodation

payment arrangements.

High Care and Low Care

1 July 2014 NO high care and NO low care places – all just residential care places

Next ACAR NO high care NO low care place allocation

Conditions of allocation

• No distinction between high and low approvals

• Approvals will not lapse

Care approvals

ACFI

How do we classify residents?

Check your resident agreements

Remove ‘low care’ and ‘high care’ references

Ageing in place

No Change to Residential Respite

Proposed modernisation of items

Classifications that can be charged a fee for Part 3

Additional care and services

Schedule of Specified Care and Services

My aged care website

My Aged CareFor information about aged care services, and how to access them:• Visit the My Aged Care website at www.myagedcare.gov.au or• Call 1800 200 422*Call My Aged Care operators to discuss your needs from:• Monday to Friday – 8am to 8pm (local time)• Saturday 10am to 2pm (local time).The call centre is closed on public holidays.If you are deaf or have a hearing or speech impairment, we can help through the National Relay Service. Call 1800 555 667* and ask for 1800 200 422*,If you need an interpreter, we can help through the Translating and Interpreting Service. Call 131 450 and ask for 1800 200 422*.*1800 calls are free from fixed lines; however,calls from mobiles may be charged.

Ongoing updates are available at:

My Aged Care websitewww.myagedcare.gov.au

Department of Social Services website:www.dss.gov.au/agedcarereform

More information….

Aged Care Reforms – Home CareMay 2014

1 July 2014Income testing for home care

1 July 2015All Home Care Packages convert to CDC

Key Milestones

Consumers can continue to be asked to pay a basic fee

Some consumers can be asked to pay an income-tested care fee

The amount of subsidy paid is reduced by the consumer’s income tested fee

DHS will administer the income assessment

There will be a fee estimator on My Aged Care

Income testing in Home Care

84% equates to approx $1.2 billion and 16% equates to approx $0.2 billion, based on 2013/14 data.

Home care – Government subsidy Vs. Client contributions

Home Care income thresholds and capsSingle person, March 2014 prices (current rates)

Grandparenting arrangements

Caps on the amount of income tested feesFull pensioners will not pay any income

tested feesPart pensioners pay up to $5000Self Funded Retiree’s pay up to $10,000

Financial Hardship Assistance

Home Care – Safeguards

Worked examples

March 2014 prices

Home Care

Total assessable income: $14,500 p.a.A care recipient who is a member of a couple is taken to have half of the couple’s combined assessable income ($29,000 / 2)

Income free area*: $19,172.40(*partnered person rate)

Total assessable income is less than the income free area, therefore:

Rose cannot be asked to pay an income tested care fee.

Income test

Income tested care fee$0.

The Government will meet the full cost of Rose’s care.

Basic daily fee$3,483 per year or

$9.57 per day

Note:Rose’s provider can charge her the basic daily fee. This is calculated at 17.5% of the basic age pension.

+

Worked example 1 - Rose

Total assessable income: $65,000 p.a.

Income free area: $24,731.20

Total assessable income > income free area:

Joseph can be asked to pay an income tested care fee.

Joseph’s package costs: $37.38 per day

Income tested care fee

Joseph’s income tested care fee will be the lower of:

• $27.47 per day (being the daily calculation of the $10,000 annual cap) or

• His care costs ($37.38);

Joseph can be asked to pay a maximum of $27.47 per day.

Basic fee$3,483 per year

+

Joseph’s income is above the upper cap threshold of $57,882 so $10,000 cap applies.

Worked example 2 - Joseph

• My Aged Care website (www.myagedcare.gov.au or 1800 200 422*

• Ongoing updates available at the Department’s website

(http://www.dss.gov.au/agedcarereform)

• Email questions to agedcarereforms@dss.gov.au

• * 1800 calls are free from fixed lines; however, calls from mobiles may be charged.

For more information

Aged Care Reforms – Residential CareMay 2014

• Key Milestones

• Overview of new fee arrangements

• New means testing arrangements

• Accommodation Payments

• Safeguards for Residents

• Examples of the new fee arrangements

Overview

19 May 2014• Publication of accommodation prices began

1 July 2014• New means testing arrangements• Accommodation payments• Higher accommodation supplements • Removal of high/low care distinction

There are grandfathering provisions for existing residents.

Key Milestones

• Basic Fee

• Means Tested Care Fee

• Accommodation

• Extra Services Fee

• Additional Services Fee

Residential Care Fees from 1 July 2014

• Income and assets combined test conducted by DHS

• Determines the fees and therefore the Commonwealth Subsidy paid for each resident

• Fee estimator available from 1 July 2014

Means Testing in Residential Care

Grandparenting arrangements

Annual and lifetime capsAnnual cap of $25,000Lifetime cap of $60,000

Safeguards on the family home

Financial Hardship Assistance

Safeguards for Residents

Subsidies and Fees from 1 July 2014

Lower Means

Higher MeansModerate MeansPays basic daily fee

Pays Accommodation Payment (no supplement)

Pays Means Tested Care Fee – care is partially subsidised

Pays Basic daily fee

Pays Accommodation Contribution(receives some Accommodation Supplement)

Does not pay Means Tested Care Fee – care is fully subsidised

Pays basic daily fee only

Receives full Accommodation Supplement

Does not pay Means Tested Care Fee – care is fully subsidised

New Residents from 1 July 2014$154,179

$45,000

$24,731 $62,944

• Choice of Payment Method• Refundable Accommodation Deposit

or • Daily Accommodation Payment • Combination of Both

• Fairer Assessment of Capacity to Pay.

Accommodation Costs – What’s New?

• Consumer Protection and Safeguards• Accommodation Price cannot be more than the

price published• Prices over $550,000 must be approved by Aged

Care Pricing Commissioner

• Increased Price Transparency• Prices must be published on MyAgedCare,

provider websites and relevant printed materials

Accommodation prices– What’s New?

Residential Care Examples

Jenny

Paying for accommodationJenny has income less than $24,731, assets less

than $45,000

Amelia

Paying for AccommodationAmelia with income of $21,913 and assets of $120,000

Peter

Government Accommodation vs Client Contribution for Accommodation Costs

Peter with income of $65,000, assets of $1,344,500

Means Tested

Amount

=$167.21Total assessable assets: $1,344,500

Asset free area: $45,000Working out the asset tested amount:17.5% x ($154,179 – $45,000)+1% x ($372,537– $154,179)+2% x ($1,344,500 – $372,538)

= $40,729.16 / 364

Asset tested amount = $111.89

Total assessable income: $65,000

Income free area: $24,731.20 Therefore:

= 50% × ($65,000 - $24,731.20) / 364

= $55.31

Income tested amount = $55.31

Peter

Accommodation costs

Peter will pay his own accommodation costs because his means tested amount is greater than $52.49

Means tested care fee

Peter pays a means tested care fee of $114.72 up to $25,000 p.a

$167.21 - $52.49 = $114.72

Basic daily fee

$46.50 per day

+

+

Peter

• My Aged Care website (www.myagedcare.gov.au or 1800 200

422*

• Ongoing updates available at the Department’s website

(http://www.dss.gov.au/agedcarereform).

• Transitional Business Advisory Service on 1800 122 092 or by

visiting the website at www.kpmg.com/AU/en/industry/Aged-

Care/tbas/

• * 1800 calls are free from fixed lines; however, calls from mobiles may be charged.

For more information:

For information about aged care services, and how to access them:• Visit the My Aged Care website at www.myagedcare.gov.au or• Call 1800 200 422*Call My Aged Care operators to discuss your needs from:• Monday to Friday – 8am to 8pm (local time)• Saturday 10am to 2pm (local time).The call centre is closed on publish holidays.If you are deaf or have a hearing or speech impairment, we can help through the National Relay Service. Call 1800 555 667* and ask for 1800 200 422*,If you need an interpreter, we can help through the Translating and Interpreting Service. Call 131 450 and ask for 1800 200 422*.*1800 calls are free from fixed lines; however,

calls from mobiles may be charged.

My Aged Care