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Consultation on the meaning of 'significant refurbishment'

A discussion paper on the definition of the criteria to meet the 'significant refurbishment' standard

PDF printable version of Consultation on the meaning of 'significant refurbishment' (PDF 288 KB)

Consultation on the meaning of 'significant refurbishment' for eligibility for higher accommodation supplement

I have recently been appointed to Chair the Aged Care Financing Authority (the Authority), which will provide transparent, independent advice to the Government on pricing and financing issues in aged care. On 9 August 2012 the inaugural meeting of the Authority was held.

As announced in the Living Longer Living Better aged care reform, eligible aged care providers will be able to receive a higher level of accommodation supplement where aged care homes have undertaken significant refurbishment. I have attached a discussion paper on the definition of the criteria to meet the 'significant refurbishment' standard for your consideration. The Aged Care Financing Authority Interim Operating Framework is available on the "Living Longer. Living Better." website at www.livinglongerlivingbetter.gov.au.

The Authority's Secretariat, based in the Department of Health and Ageing, will be coordinating the consultation process and providing the Authority with analysis of feedback.

To allow for due consideration please return your feedback by sending an email to the ACFA Secretariat at ACFA.Secretariat@health.gov.au by 31 August 2012.

On behalf of the Authority, I look forward to your ongoing involvement and welcome your contributions now and in the future.

Yours sincerely
Lynda O'Grady
Chair
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Discussion Paper - Definition of Criteria to meet the 'Significant Refurbishment' Standard

Submission due 31 August 2012

Introduction

This paper presents a proposed definition of ‘significant refurbishment’ which an aged care home will be required to meet to qualify for a higher level of the accommodation supplement. It aims to generate discussion about the proposed criteria and seek feedback on the scope of the criteria.

Background

On 20 April 2012, the Prime Minister, the Hon Julia Gillard MP, and the Minister for Mental Health and Ageing, the Hon Mark Butler MP unveiled a comprehensive 10 year package to reshape aged care. It will build a better, fairer, sustainable and nationally consistent aged care system to meet the social and economic challenges of the nation’s ageing population. The Government recognises the need for fundamental reform of the aged care system in order to ensure that it continues to provide high quality care and can respond to future challenges. Information on the comprehensive reform package can be found on the "Living Longer. Living Better." website at www.livinglongerlivingbetter.gov.au.

As part of these reforms, from 1 July 2014, the Australian Government will significantly increase the maximum level of the accommodation supplement it pays in respect of care recipients who cannot meet their own accommodation costs. This will apply to aged care homes that were built or significantly refurbished since the announcement of the aged care reforms on 20 April 2012. The maximum level of the accommodation supplement will increase from $32.58 per day (currently) to an estimated $52.84 per day (on 1 July 2014).

A new Aged Care Financing Authority (the Authority) has been established, which will provide independent advice to the Minister for Mental Health and Ageing on pricing and financing issues. The Authority has an independent chair, and comprises a committee of members with expertise in provision of aged care services, consumer and worker representation and finance, as well as Government representatives. In completing its responsibilities the Authority is required to ensure that its advice is evidence based, its operations are transparent and it consults widely with the aged care sector, the finance sector and consumers (or their representatives) as appropriate. The Interim Operating Framework (IOF) for the Authority can be found on the "Living Longer. Living Better." website at www.livinglongerlivingbetter.gov.au.

The first topic that the Authority is required to provide advice on is the definition of the level of refurbishment required for an aged care home to be eligible for the higher level of the accommodation supplement. The interim definition is given in Schedule B of the IOF. The Government intends to include a definition of ‘significant refurbishment’ in the Residential Care Subsidy Principles 1997 based on advice from the Authority on the interim definition given in the IOF.
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Outline of consultation process

The Authority will be consulting with key stakeholders on the proposed definition of ‘significant refurbishment’. The feedback will be considered by the Authority when formulating its advice to the Minister. The consultation process will be coordinated by the Authority’s Secretariat based in the Department of Health and Ageing.

Feedback is requested by 31 August 2012.

Proposed definition

The proposed definition of ‘significant refurbishment’ is a refurbishment that meets the following criteria:

1. the refurbishment includes changes, updates, upgrades or other improvement that mean that the aged care home after refurbishment is different either in form, quality or functionality than before refurbishment; and
2. the costs of the refurbishment are on capital account – that is, they are either capitalised as structural improvements where they are integral to the structure or depreciated if they relate to fixtures, fittings or anything removable intact¹; and
3. the refurbishment requires approval by a building authority as a major refurbishment.

1 - Routine repairs, the maintenance of premises (such as painting, plumbing, electrical work or gardening) and the replacement of furniture are not refurbishments and would be expected to be funded through the operational budget of the service.

Feedback sought

The Authority has asked for feedback from key stakeholders on the definition of significant refurbishment including the scope and structure of each component of the definition.

The Authority is also seeking input on practical examples of the types of refurbishment which would be appropriate to consider as being within the scope of the definition or outside the scope of the definition. In providing practical examples, the respondent is requested to focus on how the aged care home after refurbishment is different either in form, quality or functionality than before refurbishment.

How to provide input

In order to have your feedback considered it needs to be submitted by 31 August 2012.

Feedback can be submitted by sending an email to the ACFA Secretariat at ACFA.Secretariat@health.gov.au

or by post to:

ACFA Secretariat
MDP 550
GPO Box 9848
Canberra ACT 2601
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