Sector on notice over higher accommodation supplement

While there has been broad praise for Senator Mitch Fifield’s speech on Tuesday in which he outlined the government’s plans for future sector reform, stakeholders have noted his comments around the higher accommodation supplement with some concern.

While there has been broad praise for Assistant Minister for Social Services Mitch Fifield’s speech on Tuesday in which he outlined the government’s plans for future sector reform, stakeholders have noted his comments around the higher accommodation supplement with some concern.

In his remarks Senator Fifield again raised the higher accommodation supplement in the context of the dementia and severe behaviours supplement, which the government cancelled earlier this year after it blew out its budget 10 fold.

Senator Fifield noted the higher accommodation supplement was a “significant boost to the industry” but he had asked the Department and the Aged Care Sector Committee to monitor expenditure on the supplement “so that the mistakes of the past are not repeated.”

Senator Fifield made similar comments about the supplement in his remarks to the ACSA national conference in September, and in Senate estimates on 24 October.

In September Australian Ageing Agenda revealed that Senator Fifield had described the higher accommodation supplement as having “inadequate modelling and budgeting” in a letter to the secretary of the Department of Social Services Finn Pratt on 30 May, in which he ordered a review of the other supplements in the Living Longer Living Better reforms.

AAA had obtained the letter under a Freedom of Information Act request

Responding to the Senator’s latest remarks on Tuesday, Patrick Reid, CEO of Leading Age Services Australia, said he believed the department was not particularly confident in the modelling that was done for the higher accommodation supplement, given what had occured with the dementia supplement. “They thought this was another one that would catch them unawares; I doubt they would sit on this one for 11 months like they did the other one.”

Mr Reid said he perceived the Senator’s comments as putting the sector on notice that the supplement was being monitored and would be acted upon if monitoring showed it was going beyond its budget allocation.

“But I would hope that, given Senator Fifield also talks about inclusive work with the sector, if there was a trend towards a problem they would engage us early to find a resolution rather than just dropping it like they did with the dementia supplement,” Mr Reid told AAA.

LASA was asking for regular reports on the supplement’s expenditure Mr Reid said, however he added that the department should be aware of the spend given DSS would know in advance when new licences were coming online.

Bruce Bailey, director of accounting firm RSM Bird Cameron, singled out the comments on the higher accommodation supplement as the “one concerning message” arising from the senator’s remarks.

“People are jumping into significant refurbishment on the basis they’re going to get that money,” he said, adding it was clear from Senator Fifield’s remarks that there would be changes to the policy if it went outside its funding allocation.

Commenting on what those changes to the supplement might be, Mr Bailey said it would be unlikely that those in receipt of the supplement would lose it. It was also unlikely that the government would reduce the amount of the supplement, given the new builds required in the sector had not yet come on stream. Instead, the government might “tighten up the eligibility criteria”, or it might let the supplement run for another three years, then cease it and lock out those who had not applied in that time, Mr Bailey said.

Among aged care providers the supplement is widely perceived as an element of government policy that provides certainty of funding and an incentive to make capital investments.

In NSW many planned refurbishments include installation of sprinklers, and the supplement is seen as essential in assisting providers to meet the government mandated deadline for sprinklers.

Under the supplement, aged care services that are newly built or significantly refurbished after 20 April 2012 are eligible to receive a higher accommodation supplement for supported, concessional or assisted care recipients. From 1 July 2014 the supplement increased from $34.20 per day to $52.49 per day.

AAA’s previous coverage on the supplement:  

Significant refurbishment supplement ‘not under review’ 

Accommodation supplement to be backdated 

Tags: Bruce Bailey, higher accommodation supplement, lasa, living-longer-living-better, patrick-reid,

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