The Federal Government announced in the 2016/2017 budget10 that it will achieve efficiencies of $1.2 billion over four years through changes to the scoring matrix of the Aged Care Funding Instrument (ACFI) that determines the level of funding paid to aged care providers. The Government will also reduce indexation of the Complex Health Care component of the ACFI by 50 per cent in 2016/17 and establish a $53.3 million transitional assistance fund to support providers.

These changes expand on the refinements made through the 2015/16 Mid Year Economic and Fiscal Outlook (MYEFO) measure titled Aged Care Provider Funding — revision to the Aged Care Funding Instrument Complex Health Care Domain. This measure is part of the Government’s response to the continued higher than expected growth in ACFI expenditure, which has increased by a further $2.5 billion over the forward estimates since the 2015/16 MYEFO.

The ACFI is a resource allocation instrument. It focuses on the main areas that discriminate care needs among residents. The ACFI assesses core care needs as a basis for allocating funding.11

The ACFI focuses on care needs related to day to day, high frequency need for care. These aspects are appropriate for measuring the average cost of care in longer stay environments.12

While based on the differential resource requirements of individual persons, the ACFI is primarily intended to deliver funding to residential aged care providers. When completed on all residents in the facility the ACFI determines the overall relative care needs profile and the subsequent funding.13

The ACFI consists of 12 questions about assessed care needs, each having four ratings (A, B, C or D) and two diagnostic sections. While the ACFI questions provide basic information that is related to fundamental care need areas, it is not a comprehensive assessment package.14

The ACFI User Guide is available at:

The changes mean that Approved Providers need to be particularly vigilant in relation to the appropriate assessment of care needs and their claims for payment and preparing appropriate documentation should they be audited.