Overview of Aged Care Reforms in May 2014
Aged Care Reforms in May 2014 introduced significant changes to the aged care sector in Australia. The reforms aimed at providing quality care for older Australians, reducing red tape, and enhancing services such as Home Care Packages, MyAgedCare, and the Australian Aged Care Quality Agency. Changes included removing distinctions between high and low care, enhancing functionality of MyAgedCare, and modernizing classifications for care and services.
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Aged Care Reforms Overview May 2014
What Reforms? If If you do not change direction, you may end you do not change direction, you may end up where you are up where you are heading heading Caring for Older Australians Reducing red tape Quality care for consumers
Achievements Changes to legislation Home Care Packages Programme New supplements MyAgedCare and call centre Australian Aged Care Quality Agency Aged Care Pricing Commissioner
Reforms going forward 2014 2015 Accommodation prices published on MyAgedCare Increased functionality MyAgedCare Commonwealth Home Support Changes to fees and subsidies CDC for all Home Care Packages Removal of high/low
High Care and Low Care 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.
Conditions of allocation 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
Care approvals No distinction between high and low approvals Approvals will not lapse
How do we classify residents? ACFI
Ageing in place Check your resident agreements Remove low care and high care references
No Change to Residential Respite
Schedule of Specified Care and Services Proposed modernisation of items Classifications that can be charged a fee for Part 3 Additional care and services
My Aged Care 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.
More information. Ongoing updates are available at: My Aged Care website www.myagedcare.gov.au Department of Social Services website: www.dss.gov.au/agedcarereform
Aged Care Reforms Home Care May 2014
Key Milestones 1 July 2014 Income testing for home care 1 July 2015 All Home Care Packages convert to CDC
Income testing in Home Care 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
Home care Government subsidy Vs. Client contributions 84% equates to approx $1.2 billion and 16% equates to approx $0.2 billion, based on 2013/14 data.
Home Care income thresholds and caps Single person, March 2014 prices (current rates)
Home Care Safeguards Grandparenting arrangements Caps on the amount of income tested fees Full pensioners will not pay any income tested fees Part pensioners pay up to $5000 Self Funded Retiree s pay up to $10,000 Financial Hardship Assistance
Home Care Worked examples March 2014 prices
Worked example 1 - Rose Income tested care fee $0. The Government will meet the full cost of Rose s care. Income test 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) Basic daily fee $3,483 per year or $9.57 per day Total assessable income is less than the income free area, therefore: Rose cannot be asked to pay an income tested care fee. Note: Rose s provider can charge her the basic daily fee. This is calculated at 17.5% of the basic age pension.
Worked example 2 - Joseph Income tested care fee Total assessable income: $65,000 p.a. Joseph s income tested care fee will be the lower of: Income free area: $24,731.20 Total assessable income > income free area: $27.47 per day (being the daily calculation of the $10,000 annual cap) or Joseph can be asked to pay an income tested care fee. His care costs ($37.38); Joseph can be asked to pay a maximum of $27.47 per day. Joseph s income is above the upper cap threshold of $57,882 so $10,000 cap applies. + Joseph s package costs: $37.38 per day Basic fee $3,483 per year
For more information My Aged Care website My Aged Care website (www.myagedcare.gov.au or 1800 200 422* Ongoing updates available Ongoing updates available at the Department s website (http://www.dss.gov.au/agedcarereform) Email questions to agedcarereforms@dss.gov.au agedcarereforms@dss.gov.au * 1800 calls are free from fixed lines; however, calls from mobiles may be charged.
Aged Care Reforms Residential Care May 2014
Overview Key Milestones Overview of new fee arrangements New means testing arrangements Accommodation Payments Safeguards for Residents Examples of the new fee arrangements
Key Milestones 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.
Residential Care Fees from 1 July 2014 Basic Fee Means Tested Care Fee Accommodation Extra Services Fee Additional Services Fee
Means Testing in Residential Care 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
Safeguards for Residents Grandparenting arrangements Annual and lifetime caps Annual cap of $25,000 Lifetime cap of $60,000 Safeguards on the family home Financial Hardship Assistance
Accommodation Costs Whats New? Choice of Payment Method Refundable Accommodation Deposit or Daily Accommodation Payment Combination of Both Fairer Assessment of Capacity to Pay.
Accommodation pricesWhats 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
Paying for accommodation Jenny has income less than $24,731, assets less than $45,000
Paying for Accommodation Amelia with income of $21,913 and assets of $120,000
Government Accommodation vs Client Contribution for Accommodation Costs Peter with income of $65,000, assets of $1,344,500
Total assessable income: $65,000 Income free area: $24,731.20 Peter Therefore: = 50% ($65,000 - $24,731.20) / 364 = $55.31 Income tested amount = $55.31 Means Tested Amount =$167.21 Total assessable assets: $1,344,500 Asset free area: $45,000 Working 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
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
For more information: My Aged Care website (www.myagedcare.gov.au or 1800 200 422* My Aged Care website Ongoing updates available at the Department s website (http://www.dss.gov.au/agedcarereform). Ongoing updates available Transitional Business Advisory Service on 1800 122 092 or by visiting the website at www.kpmg.com/AU/en/industry/Aged-Care/tbas/ Transitional Business Advisory Service * 1800 calls are free from fixed lines; however, calls from mobiles may be charged.
My Aged Care 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.
