The way approved providers determine and charge for accommodation will change from 1 July 2014 with the commencement of the last set of amendments to the Aged Care Act 1997.
To prepare for this, on 28 January 2014, the Government released The Fees and Payments Principles 2014, which sets out the process (beginning 31 January 2014) for approved providers to determine their accommodation fees.
What you need to know now – all providers
From 19 May 2014, aged care providers will need to publish the following information about their accommodation prices on the MyAgedCare website;(http://www.myagedcare.gov.au/), their own websites and any written documentation provided to prospective residents and their families:
- prices for rooms at the residential aged care facility and a description of the key features for each room; and
- the payment options for these prices including a lump sum payment option, periodic payment option and a combination of both.
Providers seeking to charge accommodation prices that exceed $550,000
If approved providers are seeking to charge accommodation prices that exceed $550,000, they will need to apply for approval from the Aged Care Pricing Commissioner.
The Fees and Payments Principles 2014 released on 28 January this year set out the requirements for an application to the Aged Care Pricing Commissioner. Application forms and more information can also be found on the Aged Care Pricing Commissioner’s website here. Applications opened on 31 January 2014.
What you need to do now Approved providers should:
- review and amend their marketing materials, website, any written documentation provided to prospective residents and their families to include the information set out above in preparation for 19 May 2014;
- apply to the Aged Care Pricing Commissioner as soon as possible if they seek to charge accommodation payments in excess of $550,000.
What you need to know for the future
- From 1 July 2014, all new residents making an accommodation payment will have the choice of paying by lump sum, periodic payment or a combination of both. This will apply irrespective of the level of care required by a resident.
- A new resident will have up to 28 days from entering care to choose how they would like to make the accommodation payment. From the day that the resident enters the care facility to the day they make an election, the resident can pay for their accommodation by daily payments only.
- The Fees and Payments Principles 2014 set out the method to convert a refundable accommodation payment to a daily accommodation payment.
- The maximum amount of a lump sum payment that can be made by a resident must leave them with at least the minimum permissible asset level. This amount will be determined quarterly. The current minimum permissible asset level is $44,000 in assets.
Approved providers will need to amend their resident contracts in light of the 1 July 2014 changes.