Aged Care Reforms Overview May 2014

1. Aged Care Reforms Overview May 2014

2. 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?

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

4. 2014 • Accommodation prices published on MyAgedCare • Changes to fees and subsidies • Removal of high/low • 2015 • Increased functionality – MyAgedCare • Commonwealth Home Support • CDC for all Home Care Packages Reforms going forward

5. 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

6. 1 July 2014 NO high care and NO low care places – all just residential care places • Next ACAR NOhigh care NOlow care place allocation Conditions of allocation

7. No distinction between high and low approvals • Approvals will not lapse Care approvals

8. How do we classify residents? ACFI

9. Check your resident agreements • Remove ‘low care’ and ‘high care’ references Ageing in place

10. No Change to Residential Respite

11. Proposed modernisation of items • Classifications that can be charged a fee for Part 3 • Additional care and services Schedule of Specified Care and Services

12. My aged care website

13. 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 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. My Aged Care

14. Ongoing updates are available at: My Aged Care websitewww.myagedcare.gov.au Department of Social Services website:www.dss.gov.au/agedcarereform More information….

15. Aged Care Reforms – Home CareMay 2014

16. 1 July 2014 • Income testing for home care 1 July 2015 • All Home Care Packages convert to CDC Key Milestones

17. 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

18. 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.

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

20. Grandparentingarrangements • 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 – Safeguards

21. Worked examples • March 2014 prices Home Care

22. Income tested care fee $0. The Government will meet the full cost of Rose’s care. Worked example 1 - Rose 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) • Total assessable income is less than the income free area, therefore: • Rose cannot be asked to pay an income tested care fee. + 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.

23. 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. • 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. Worked example 2 - Joseph • Joseph’s income is above the upper cap threshold of $57,882 so $10,000 cap applies. + Basic fee $3,483 per year Joseph’s package costs: $37.38 per day

24. 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

25. Aged Care Reforms – Residential CareMay 2014

26. Key Milestones • Overview of new fee arrangements • New means testing arrangements • Accommodation Payments • Safeguards for Residents • Examples of the new fee arrangements Overview

27. 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

28. Basic Fee • Means Tested Care Fee • Accommodation • Extra Services Fee • Additional Services Fee Residential Care Fees from 1 July 2014

29. 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

30. Grandparentingarrangements • Annual and lifetime caps • Annual cap of $25,000 • Lifetime cap of $60,000 • Safeguards on the family home • Financial Hardship Assistance Safeguards for Residents

31. Subsidies and Fees from 1 July 2014

32. New Residents from 1 July 2014 $154,179 Higher Means Moderate Means Pays basic daily fee Pays Accommodation Payment (no supplement) Pays Means Tested Care Fee – care is partially subsidised Pays Basic daily fee Pays Accommodation Contribution (receivessome Accommodation Supplement) Does not pay Means Tested Care Fee – care is fully subsidised Pays basic daily fee only Receives full AccommodationSupplement Does not pay Means Tested Care Fee – care is fully subsidised $45,000 Lower Means $62,944 $24,731

33. 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?

34. 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?

35. Residential Care Examples

36. Jenny

37. Paying for accommodationJenny has income less than $24,731, assets less than $45,000

38. Amelia

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

40. Peter

41. Government Accommodation vs Client Contribution for Accommodation CostsPeter with income of $65,000, assets of $1,344,500

42. 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 • 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

43. Accommodation costs Peter will pay his own accommodation costs because his means tested amount is greater than $52.49 + Peter • 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

44. 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:

45. 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