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Aged Care Essentials - Edition 4, 2010

The 4th edition for 2010 of Aged Care Essentials is designed for approved providers and the staff of Australian Government-subsidised residential aged care services. It carries news and announcements about residential aged care services, as well as information about current rates for subsidies, supplements and charges.

You may download this document in PDF format:

PDF printable version of Aged Care Essentials Edition 4, 2010 (PDF 380 KB)

If you would like to go on the mailing list to receive the newsletter via email (PDF format) email agedcare_essentials@health.gov.au

Previous Newsletters are available on the Department of Health and Ageing website.

5 Year Accommodation Charge Residents

Residents who first entered care before 1 July 2004 are only eligible to pay an accommodation charge for a total of five years. This applies even if they have had a break in care of more than 28 days.

The five year period for these residents is cumulative and includes all entries into care where they were eligible to pay an accommodation charge. These residents are also subject to a lower maximum accommodation charge as outlined on the schedule of resident fees and charges.

Dates for Quarterly Reviews of Income Tested Fees

The quarterly reviews of income tested fees will be conducted on the following dates:

• 25 September 2010. The review is effective from 20 September 2010.
• 18 December 2010. The review is effective from 1 January 2011.

Residents and aged care providers should receive fee advice letters from the 20 September quarterly review early in October 2010. Letters from the 1 January quarterly review will be mailed out at the end of December.

Approved Providers hold over $9 Billion in Accommodation Bonds in 2008-2009

At 30 June 2009 approved providers reported through their Annual Prudential Compliance Statement (APCS), that they held $9.12 billion in bonds. This is an increase of approximately $1.4 billion (18 per cent) on what was held at 30 June 2008. Since 30 June 2006 the total value of bonds has increased by 72 per cent. The total number of bonds held at the end of the financial year increased to 60,621 up 2,290 (3.9 per cent) on the previous year.

Total value and number of bonds held during financial years

	2006-2007	2007-2008	2008-2009
Number of providers holding bonds	967	973	952
Number of bonds held	54,376	58,331	60,621
Total value of bonds held	$6.3b	$7.7b	$9.1b
Average bond balance	$116,672	$132,443	$150,449
Average total bonds held per provider	$6.6m	$7.9m	$9.7m

Percentage of approved providers holding bonds (by sector) at 30 June 2009

Average Bond Value (by sector) at 30 June 2009

Average bond value (by state or territory) at 30 June 2009

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Compliance with the Prudential Standards

Approved providers are required to report their compliance with the three Prudential Standards; the Record Standard, the Disclosure Standard and the Liquidity Standard.

Generally in 2008-2009 approved providers reported improved compliance with the Prudential Standards and with their obligations to refund accommodation bonds within specified timeframes; 13.5 per cent of approved providers reported some level of non-compliance in 2008-2009 down from 18.9 per cent in 2007-2008. There was a small increase in the rate of non-compliance with the Liquidity Standard in 2008- 2009. This reflected a small group of related approved providers experiencing financial difficulty.

Overall compliance with the Prudential Standards has continued to improve over the last three years.

This is likely to reflect greater understanding by approved providers of their obligations and strengthening of governance and systems.

However, common rationale for failing to meet bond refund timeframes is administrative oversight. This suggests that there is some scope for further improvements.

Reported compliance – Percentage of approved providers (by year)

	Liquidity Standard (per cent)	Disclosure Standard (per cent)	Records Standard (per cent)
2007-2008	98.9	95.8	95.5
2008-2009	98.2	97.8	97.7
Change	-0.7	+2.0	+2.2

Reported compliance – Percentage of approved providers (by industry sector)

Sector	Liquidity Standard (per cent)	Disclosure Standard (per cent)	Records Standard (per cent)
For-profit	97.7	99.3	98.3
Government	95.1	92.2	95.1
Not-for-profit	99.1	98.0	97.8
Total	98.2	97.8	97.7

Reported compliance – Percentage of approved providers (by industry sector) who refunded all accommodation bonds within statutory timeframes

Sector	2007-2008 (per cent)	2008-2009 (per cent)	Change (per cent)
For-profit	85.2	88.2	+3.0
Government	88.9	87.6	-1.3
Not-for-profit	88.2	91.3	+3.1
Total	87.4	90.0	+2.6

2009-2010 Annual Prudential Compliance Statement

The 2009-2010 APCS was issued in early July 2010 to all approved providers who have a financial year ending 30 June 2010. It must be completed, audited and lodged together with the audit report by 31 October 2009. The reporting date of 31 October 2010 cannot be extended.

Approved providers who fail to comply with the Prudential Standards (including lodging the APCS by the due date) or fail to refund bond balances within the statutory timeframes are at risk of having compliance action taken against them, including possibly the imposition of sanctions.

Assets Testing and the Home Exemption for Couples

The value of a couple’s home will be exempt from an assets assessment if the partner is residing in the home:

• at the time of the assessment; or
• at the time of the resident’s entry into care (which ever date is the earlier).

Therefore, if a couple completes their assets assessments before entry into care, the home will be exempt from the assets assessments for each member of the couple. Entering the second member of a couple into care at a later date does not affect the validity of their assets assessment.

If a couple enter care at the same time and then seek assets assessments, fifty per cent of the value of the home will be included in each assessment, unless another home exemption applies. This is because, at the date of entry into care for each member of the couple, the partner was not residing in the home.

In the situation where one member of a couple enters into care before the other and then both seek an assets assessment, a home exemption will apply to the member of the couple who enters into care first. Fifty per cent of the value of the home will be included in the assets assessment of the second member, unless another home exemption applies.

Subscribe to receive Aged Care Essentials electronically

Aged Care Essentials is distributed as electronic copy only.

If you would like to receive Aged Care Essentials through email, please email: agedcare_essentials@health.gov.au

Current and back issues of Aged Care Essentials can be found on the Department of Health and Ageing website at: www.health.gov.au/internet/main/publishing.nsf/Content/ageing-rescare-payessdx.htm

Aged Care Subsidies, Supplements, Fees and Charges

Aged care subsidies and supplements can be found on the Department of Health and Ageing website at: www.health.gov.au/internet/main/publishing.nsf/Content/ageing-subs-supp-current.htm

The schedule of resident fees and charges can be found on the Department of Health and Ageing website at: www.health.gov.au/feesandcharges

Previous schedules of fees and charges can be found on the Department of Health and Ageing website at: www.health.gov.au/internet/main/publishing.nsf/Content/ageing-archive-feesinfo-0710.htm
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