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Mixed views on changes to support for disadvantaged seniors in aged care

The Aged Care Financing Authority’s proposals to change the arrangements around government-supported older people in residential aged care have drawn a mixed response among provider groups.

ACFA has recommended removing the supported resident ratio for each planning region, and retaining the 40 per cent supported resident ratio but applying it over the course of a month rather than on a daily basis.

Supported residents receive part or full government funding to cover the cost of their aged care accommodation and do not pay a means tested care fee.

The government paid $872 million to providers for the 109,000 supported residents living in aged care last financial year.

Late last week the department released ACFA’s report, which had been provided to government on 11 January.

The report is based on sector consultation that has been underway since an initial discussion paper was issued in May 2015.

ACFA found there was not a strong case for continuing the minimum regional target ratios for supported residents, which are determined based on local socio-economic data.

Currently all residential facilities are required to meet the supported resident ratio for their region and subsidy deductions can be applied to those that fail to meet them.

But ACFA said it was unlikely the regional ratios are significantly affecting provider behaviour as they are exceeded by an average of 20 to 30 percentage points in the majority of cases.

“ACFA considers the regional ratio is unnecessary regulation and could be repealed with minimal, if any, impact on access to care for supported residents,” its report said.

On the other hand, the authority found that the 40 per cent rule – the government’s second key mechanism for encouraging the provision of aged care to disadvantaged seniors – was a “clear financial incentive” that influenced provider behaviour.

Under this rule, 40 per cent of residents in a facility must be supported residents if the provider is to receive the full government subsidy, otherwise they incur a 25 per cent reduction per supported resident.

However, given small aged care facilities could suffer when the loss of just one supported resident conceivably pushes occupancy below the 40 per cent requirement, ACFA recommended the ratio should be calculated as a monthly average rather than on any given day.

“This will improve administration and reduce the administrative work associated with changing ratios,” the authority said.

Mixed reaction

But responding to the report this week, Leading Age Services Australia said it believed the national 40 per cent rate for concessional residents should be abolished and the regional rate be adopted as the trigger to qualify for the maximum accommodation supplement.

LASA CEO Sean Rooney said that ACFA’s report showed 23 per cent of services never exceeded the 40 per cent ratio last financial year, while 15 per cent fluctuated above or below it.

Mr Rooney told AAA that “the punitive nature of this policy” directly impacts the industry’s ability to meet consumer need.

The Productivity Commission in 2011 also recommended retaining the regional ratios and removing the 40 per cent rule.

Mr Rooney said the industry was committed to improving and expanding services where there was “a transparent and accessible model for application, approval and implementation of government support.”

However, other groups called on government to enact the recommendations.

Aged & Community Services Australia, which had proposed dropping the regional ratios and applying the 40 per cent rule over a month, said it supports “streamlining that ensures providers aren’t disadvantaged by unavoidable or temporary fluctuations in supported resident ratios.”

Pat Sparrow, chief executive officer of ACSA, told AAA her peak urged the government to adopt a system that “supports access to aged care services for supported residents wherever they live.”

Similarly, Cameron O’Reilly, CEO of the Aged Care Guild, said his peak was pleased with the report as it was consistent with the views it had conveyed to ACFA.

“The guild supports the removal of the regional supported residents ratio and amending the method of applying the 40 per cent supported resident rule to apply over a month,” Mr O’Reilly told AAA.

The measures are reflective of changing demographics and current resident profiles and would remove a level of uncertainty across the sector and address an unnecessary red tape burden on providers, he said.

“The guild urges government to adopt these recommendations,” Mr O’Reilly said.

ACFA said it would continue to monitor supported resident ratios in its annual reports to ensure any changes or trends are identified, including those that come about as a result of any future reforms.

The Federal Government has not yet commented on the ACFA report.

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