2. Overview Reforms to date 1 July 2014 financial reforms – Income and means testing, accommodation payments, significant refurbishment What’s next – CDC, CHSP, ACFA’s work program

3. Achievements to date Changes to legislation Home Care Packages Programme New supplements My Aged Care website and call centre Australian Aged Care Quality Agency Aged Care Pricing Commissioner Publishing of accommodation prices

4. 1 July 2014 changes – Home Care Packages Income tested care fee. Government subsidy reduced by income tested care fee Safeguards grandparenting arrangements caps on fees financial hardship assistance Administration Fee estimator

5. Home Care income thresholds and caps Single person, March 2014 prices (current rates) $10,000 annual cap $3,483 Part pensionersSelf-funded retireesFull pensioners $5,000 annual cap

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

7. 1 July 2014 changes – residential care Accommodation Payments Removal of high care/low care distinction Choice of accommodation payment Changes to fees Combined income and asset test determines means tested care fees and eligibility for accommodation support Safeguards Grandparenting, caps on fees, financial hardship assistance

8. Government Subsidy & Primary Supplements Other Supplements Basic Care Fee Subsidies and Fees from 1 July 2014 Government contribution Care recipient contribution Government Subsidy & Primary Supplements Other Supplements Basic Care Fee Means Tested Care fee Government Subsidy & Primary Supplements Other Supplements Basic Care Fee Means Tested Care fee Government Subsidy & Primary Supplements Other Supplements Basic Care Fee Means Tested Care fee Other Supplements Basic Care Fee Means Tested Care fee

9. Lower Means 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 (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 $45,000 $24,731$62,944

10. $154,179 $45,000 $62,944 $24,731 Assessable income: $21,913 p.a. Assessable assets: $120,000 Basic Daily Fee $46.50 Means Tested Care Fee $0.00 Accommodation Contribution of $36.06 Worked example - Amelia

11. In high care, Amelia pays up to $12,448.80 per year In low care, Amelia can be asked to pay a lump sum up to $75,000 Government pays up to $5,981.36 per year Amelia pays up to $13,125 per year Paying for Accommodation

12. Higher accommodation supplement From 1 July 2014, supplement increasing from approximately $34 per day to approximately $52 per day. Newly built or significantly refurbished services from 20 April 2012 Principles to be finalised shortly and application process to follow 12

13. ‘Significant refurbishment’ – eligibility criteria Completed on or after 20 April 2012. Cost of the refurbishment must at least equal a minimum monetary spend amount calculated on the number of care recipient’s rooms in the facility.  Cap on expenditure relating to fire safety improvements of 25% of minimum monetary spend amount The relevant costs must be capitalised in accordance with Australian accounting standards. 13 Minimum monetary spend amount = 40% × total number of care recipient’s rooms × $25,000

14. ‘Significant refurbishment’ – eligibility criteria (cont’d) Significant improvements and upgrades which directly benefit residents, particularly supported residents. Provides benefits for at least 40 per cent of residents (e.g. having a refurbished bedroom) or an extension to the facility must have increased the total number of care recipient’s rooms by 25 per cent. Proportion of rooms available to supported residents must not have been reduced after the refurbishment. 14

15. Application process 1.Pre-approval (optional) The higher supplement will not be payable until the refurbishment is completed and all requirements have been confirmed as met. 2.Standard approval for already completed work 3.Newly built do not need to apply 15

16. Future reforms 2015 Increased functionality – My Aged Care website and contact centre Commonwealth Home Support Programme (1 July) Consumer Directed Care for all Home Care Packages (1 July)

17. ACFA’s Forward Work Program Reform Monitoring Project Improving Financial Data Collection Project Factors Influencing the Financial Performance of Providers Project Advice on cost neutral mechanisms to ensure access to care for supported residents Annual Report on the Funding and Financing of the Aged Care Sector. Input into 5 year review of reforms

18. For more information: My Aged Care website (www.myagedcare.gov.au or 1800 200 422*www.myagedcare.gov.au Ongoing updates available at the Department’s website (http://www.dss.gov.au/agedcarereform).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/www.kpmg.com/AU/en/industry/Aged-Care/tbas/ * 1800 calls are free from fixed lines; however, calls from mobiles may be charged.