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Ref No: MS15-002396

Ms Lynda O’Grady

Chairman
Aged Care Financing Authority
ACFA Secretariat

PO Box 7576

CANBERRA ACT 2610

Dear Ms O’Grady

Thank you for your letter dated 19 October 2015, regarding the Aged Care Financing Authority’s (ACFA) forward work plan. I appreciate the time you have taken to consider ACFA’s priorities for the remainder of this year and for 2016-17. I note you wrote to the former Assistant Minister, Senator the Hon Mitch Fifield about this matter on 26August2015.

I have carefully considered your recommendations and have made the following decisions regarding ACFA’s Work Program:

New Project: Bond Guarantee Scheme

I request that ACFA undertake a study examining alternative arrangements to the Bond Guarantee Scheme.This project will involveconsultations with the aged care and insurance sectors to determine what arrangements may be feasible and practical. I have determined that a reporting date of 30April 2017 would be appropriate, to enable this report to feed into the latter stages of the 2016-17 review.

Revised scope and reporting date for report to inform the 5 year legislated review

I have decided to refine the scope of this work and defer the reporting date. I request that ACFA provide advice on funding, financing and pricing issues affecting the matters specified for review in section 4 of the Aged Care (Living Longer Living Better) Act 2013. Inparticular, this advice would focus on such issues as they relate to means testing, fees, accommodation prices, access and workforce. This project is due by 31 October 2016.

Rural and Remote project

I recognise the rural and remote study is a substantial piece of work to be completed by 16December 2015. To ensure the majority of ACFA resources can be used for this important project, I agree to defer both the Supported Residents and Financial Performance of Home Care providers projects.

Supported Residents Project

I accept the proposal to defer the reporting date of the review to 31 December 2016.

Home Care provider performance project

Given the new projects now added to the ACFA work plan, and the significant changes to the home care model which will be introduced in 2017 and 18, I have decided not to proceed with this project at this stage. The need for this project can be revised after the changes have been implemented.

I believe the revised work plan gives ACFA greater flexibility to focus on strategic priorities, while still ensuring ACFA continues to fulfil its key function of advising Government on the long-term financial sustainability of the aged care sector.

Thank you for bringing this matter to my attention, and please find enclosed the revised forward work program for ACFA.

Yours sincerely

Signed 4/11/2015

The Hon Sussan Ley MP

Encl

Forward Work Program for ACFA

Task / Key Date
Reform Monitoring Reports / Quarterly reports during 2015
Report on issues affecting the financial performance of rural and remote providers of residential and home care packages / 16 December 2015
2016 Annual Report on the funding and financing of the aged care sector / 30 June 2016
Advice to inform the 5 year review of the aged care reform, with particular regard to funding, financing and pricing issues affecting the matters specified for review in section 4 of the Aged Care (Living Longer Living Better) Act 2013. In particular, this advice would focus on such issues as they relate to means testing, fees, accommodation prices, access and workforce. / 31 October 2016
Advice on cost neutral mechanisms to ensure access to care for supported residents, including reviewing the supported resident ratio. / 31 December 2016
Advice on alternative arrangements to the Bond Guarantee Scheme for ensuring the protection of lump sum accommodation payments / 30 April 2017
2017 Sector Annual Report / 30 June 2017