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Ask first, charge later
By Yasmin Noone
AGED CARE PROVIDERS will soon
be required to seek a resident's
approval before they charge fees
over and above a pre-determined
level, in a sweeping new move by
the federal government to improve
consumer protections in the aged
Just prior to Christmas 2012,
the Minister for Mental Health and
Ageing announced that for the
first time ever, providers will have
to publish their accommodation
prices and seek approval for
charging "excessive amounts".
The changes, which will take
effect on 1 July 2014, will require
providers who want to charge
residents more than $50 a day to
justify their actions.
And providers who want to
charge over $85 a day will also
need to seek approval from the
federal government under a new
set of guidelines.
"Importantly, all prices will be
published on the government's
MyAgedCare website making the
system more transparent and open
to scrutiny," Minister Butler said.
"This will set clearer
boundaries and protect older
people and their families from
being overcharged or being
asked to pay exorbitant fees
without genuine justification."
Mr Butler said the changes
will be complemented by a
new 'Choice of Payment
"After agreeing on a price
with an aged care home, new
residents will have 28 days after
moving in to decide whether to
make accommodation payments
via a Daily Accommodation
Payment (DAP), a Refundable
Accommodation Deposit (RAD)
or a combination of both."
The changes follow
recommendations to the
government by the Aged Care
Financing Authority (ACFA) after
ACFA's recommendation that
three broad accommodation
payment pricing levels be
established was also adopted
by the government.
The tiers were recently
explained in a public letter to
the chair of the ACFA, Lynda
O'Grady, from Minister Butler,
published on the Department of
Health and Ageing's website.
"Level 1 -- up to the level
of the maximum Government
accommodation supplement ($50
per day (2012 prices) or lump
sum equivalent)," the letter states.
"Level 2 -- Prices between
level 1 and an upper threshold
based on the 95th percentile
of lump sum accommodation
payments for the most recently
available year of data ($104.67
per day (2012 prices) or lump
"Level 3 - Prices above the
Level 2 threshold."
The first and last tiers were
adopted as per the ACFA's exact
recommendation, however the
second tier was not.
"I appreciate the basis on
which the upper threshold was
determined, I believe that setting
the upper threshold at $85 will
offer greater consumer protection
whilst still allowing industry
sufficient flexibility in pricing,"
Minister Butler said in the
"Therefore, the upper threshold
for Level 2 prices will be set at a
Daily Accommodation Charge of
$85 per day, giving an equivalent
Deposit of $406,037."
Mr Butler also announced that
aged care homes that significantly
upgrade their facilities will be
eligible to share more than $480
million in extra funding from 2014.
"The refurbishments can be
made from 20 April 2012 and must
substantially benefit Australia's
aged care residents," he said.
As a result of the new funding,
aged care homes will be rewarded
by an increased maximum
accommodation supplement from
the government, which rises by
62 per cent -- from a maximum
$32.58 per resident, per day, to
$52.84 from 1 July 2014.
"Residents will be the
winners from these considerable
incentives," Mr Butler said.
"They will result in alterations,
updates, upgrades and other
improvements to residential care
facilities, including bedrooms and
Consumer advocacy groups
were quick to react after the
with media statements denoting
widespread support for an aged
care system that will become "more
transparent" as a result of the
accommodation charges move.
National Seniors Australia said
it believes the change will help
consumers better navigate the
minefield of entering aged care.
COTA Australia added that the
announcement provides greater
transparency in aged care and a
win for older Australians. n
Details of the changes to
and the higher accommodation
supplement are at the Living
Longer. Living Better website
For an in-depth analysis of
what the changes will mean to
you, see AAA's finance article
www.australianageingagenda.com.au | 9
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