Aged Care Reform

Department of Social ServicesApril 2014

Reforms to date5 Bills passed in Parliament New Home Care Packages/Consumer Directed CareFour levels of Home CareDementia and Veterans’ SupplementsMy Aged Care commenced operationAged Care Pricing CommissionerHomeless Supplement Quality AgencyApproval of accommodation payments approach

Reforms going forward

2014Accommodation prices to be published on My Aged CareChanges to fees and subsidiesRemoval of high/low distinction in residential care

2015Increased functionality – My Aged CareCommonwealth Home Support ProgrammeConsumer Directed Care (CDC) for all Home Care Packages

Future aged care reforms

Key milestones ahead in Home Care

1 July 2014Income testing for home care

1 July 2015All Home Care Packages convert to CDC basis

Income testing in Home Care

New consumers from 1 July 2014 with the income to do so can be asked to pay an income tested care fee.Consumers will continue to pay a basic daily fee. The Government will reduce the amount of subsidy it pays based on the care recipient’s income tested fee.DHS will administer the income test.

Home care – Government subsidy Vs. client contributions

Government Subsidy

Maximum Client contributions

Current

84%

16%

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

76%

24%

Future

Example of Government Subsidy vs. Client Contribution for Level 2 HCP- total value of package equals $17,064

Full Pensioner Part-Pensioner Self-funded Retiree 1 Self-funded Retiree 2

$13,644.00

$10,817 (63%)

$7,177 (42%)

$3,644 (21%)

$2,827 (17%)

$6,467 (38%)

$10,000 (59%)

$3,420 (20%) $3,420 (20%)$3,420 (20%)$3,420 (20%)

Income of $24,346 Income of $30,000 Income of $50,000 Income of $70,000

Current

$3,420 (20%)

$13,644 (80%)

Note: $3,420 is the max Basic Daily Fee. Not all recipients are asked to pay this.

$13,644 (80%)

Basic Fee Contribution Income Tested Contribution Government Subsidy

New Clients Post 1 July 2014

$1,467

$5,000

$0

$13,483

Annual Assessable Income

Max

imum

ann

ual i

ncom

e te

sted

fees

$8,483

$24,731 $34,731 $47,882 $57,882 $70,000$0

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

$10,000 annual cap

$3,483

Part pensioners Self-funded retireesFull pensioners

$5,000 annual cap

Home Care – safeguards

Full rate pensioners are not required to pay an income tested care feeRecipients’ homes or other assets not includedAnnual and lifetime capsHardship provisions

Dementia and Veterans’ Supplements in Home Care

• Dementia and Cognition Supplement; or• Veterans’ Supplement• At all levels of Home Care Packages • Diagnosis of dementia not required• Application forms are available on the

Department of Human Services website

Key milestones ahead in Residential Care

19 May 2014Providers must publish accommodation prices and information

1 July 2014 Removal of distinction between low/high level careChanges to means testingAccommodation paymentsHigher accommodation supplement for new or significantly refurbished facilities

1 July 2014 – Fees in Residential Care

A basic daily fee Means tested feeExtra Services feeAccommodation Payments

Means testing in Residential Care

Means testing to include both income and assetsAffects the amount the Commonwealth pays as subsidy Conducted by the Department of Human Services when a resident enters careFamily home will continue to be exempt from the aged care assets test if occupied by a spouse or other protected person

Government contribution

Care recipient contribution

Residential Care – subsidies and fees from 1 July 2014

Basic daily fee

Low Means

High 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$154,179

$45,000

$24,731 $62,944

Greater choice in how accommodation in Residential Care is paid

Refundable Accommodation Deposit (RAD), orDaily Accommodation Payment (DAP), or a combination of RAD and DAP

28 days after entry to decide on payment method

Safeguards

Grandparenting for those already in careAnnual and lifetime capsHardship provisionsHome not counted as asset or capped for means testing purposes

Dementia and Veterans’ Supplements in Residential Care

• Dementia and Severe Behaviours Supplement • Veterans’ Supplement• Both supplements can be paid• On top of ACFI • Applications required for the Dementia & Severe

Behaviours Supplement• No applications required for the Veterans’ Supplement

Commonwealth Home Support Programme

Commences 1 July 2015Combines under one programme:

Commonwealth Home and Community Care Program National Respite for Carers ProgramDay Therapy Centres Assistance with Care and Housing for the Aged

For more information….Ongoing updates available at: • My Aged Care website (

www.myagedcare.gov.au)• www.dss.gov.au/agedcare

Any questions?