ACFI Monitoring Group

Meeting 4 Outcomes

The fourth meeting of the Aged Care Funding Instrument (ACFI) Monitoring Group was held on Thursday 13 December 2012 in Canberra.

The Monitoring Group reviewed ACFI data from July to September 2012 which showed that average ACFI subsidies in September 2012 ($134.77#) were in line with average subsidies provided in August 2012 ($134.70) and 0.6% above June 2012 ($133.96). Average subsidies for July to September 2012 ($134.73) were 5.33% above the same period last year ($127.91).

As this data builds, the Monitoring Group will track expenditure against target levels in the Commonwealth Budget forward estimates. The 2012-13 Budget of $9.1 billion is
$378 million* more than the 2011-12 Budget. Under these reforms, average care subsidies are projected to grow by 2.7% per annum (above indexation) between 2012-13 and
2016-17.

The Monitoring Group remainedof the view that it is still too early to determine the likely impact these changes will have over the full financial year, given only three months of data is available and reappraisals remain below historical levels as demonstrated in the table below.

June 2012 / July 2012 / August 2012 / September 2012 / Average of July 2011 to
May 2012
New Admissions / 4,909 / 4,861 / 4,921 / 5,682 / 5,076
Reappraisals / 9,860 / 5,403 / 6,083 / 5,999 / 7,305
Total New Appraisals / 14,769 / 10,264 / 11,004 / 11,681 / 12,382

The Monitoring Group noted they expected to have a better understanding of the longer term impact of the measures in future months.

The Monitoring Group made a number of observations:

  • average subsidies in September ($134.77) were in line with August ($134.70) and above June ($133.96);
  • from June to September 2012 average subsides grew 0.6%;
  • average subsidies for July to September 2012 were 5.33% higher than the same period in 2011;
  • the average daily subsidy per resident for July to September was approximately $2.30 below what it would have been if the changes had not been introduced; and
  • approximately $2.16 of this reduction in growth came from the 1.6% price reduction, which when taken with indexation that occurred on the same day, meant that all ACFI subsidy rates were unchanged on 1 July 2012;
  • the impact of the Activities of Daily Living and Complex Health Care changes on the subsidies for individual residents remains relatively small;
  • approximately $0.05 of the reduction in growth came from the changes to the Activities of Daily Living domain which had impacted 0.13% of resident days; and
  • approximately $0.09 of the reduction in growth came from the change to the Complex Health Care domain which had impacted 0.34% of resident days.

The Monitoring Group reviewed a range of data in relation to the impact on different service/provider characteristics. The changes do not appear to have had a disproportionate impact on any service/provider type. It was reiterated that some parts of the sectorappeared to have lower than average ACFI subsidy levels: smaller services, services caring for people with a history of homelessness and services located in remote areas.

The Department provided an update on its data analysis project, in conjunction with Alzheimer’s Australia, to review the impact of the measures on residents with dementia.

The Department provided an update to members on the agreed 1 February 2013 changes to the ACFI. It noted the Minister had agreed to four changes to the ACFI User Guide and Answer Appraisal Pack previously discussed by members. Members noted the communication strategy prepared by the Department which outlines the communications approach to the sector.

Members received an update from its sub-group – the ACFI Technical Reference Group (TRG) – which had discussed a number of options to improve the operation of the ACFI from 1 July 2013. Members agreed to seek comments on these proposals from their members
out-of-session. It was noted that the Monitoring Group would also be provided with a further report from the TRG out-of-session.

*Updated following the release of the Mid-Year Financial Economic Outlook (MYFEO) on

Monday 22 October 2012.

# For the purposes of the Monitoring Group, the average daily subsidy per resident is calculated based on ACFI appraisal data and includes the Conditional Adjustment Payment. It does not take account of Resident Classification Scale saved rates or other non-typical rates.