Australian Government
Aged Care Financing Authority
2015-16 OPERATIONS REPORT OF THE
AGED CARE
FINANCING AUTHORITY

2015-16 Operations Report of the Aged Care Financing Authority1

Introduction

This is the fourth annual operations report for the Aged Care Financing Authority (the Authority). This report covers the period 1July2015 to 30June2016.

The operations report has been prepared pursuant to theCommittee Principles 2014 issued under the Aged Care Act 1997. Section 10.7 of the Committee Principles 2014requires that:

(1)The Aged Care Financing Authority must, as soon as practicable after the end of each financial year, prepare and give to the Minister a report on the operations of the Authority during that year.

(2)As soon as practicable after giving the report to the Minister, the Aged Care Financing Authority must publish a copy of the report on the Authority’s website.

ESTABLISHMENT OF THE AUTHORITY

Background

The Authoritywas established on 1August2012. Its role is to provide independent, transparent and evidence based advice to the Australian Government on the sustainability and viability of the aged care sector. Secretariat support is provided by the Funding Policy Branch of the Aged Care Policy and Regulation Division within the Department of Health.

AuthorityMembership

The members of the Authority during the reporting period were:

Ms Lynda O’Grady / Chairman
Mr Nicholas Mersiades / Deputy Chair
Mr Ian Yates / Member
Mr Gary Barnier / Member
Ms Leanne Thomas / Member
Ms Mary Patetsos / Member
Ms Sally Evans
(until 24 October 2015) / Member
Mr Graham Hodges
(until 24 October 2015) / Member
Ms Julie Campbell-Bode
(from 25 October 2015) / Member
Professor Graeme Samuel AC
(from 25 October 2015) / Member
Mr John Pollaers
(from 25 October 2015) / Member

There were three non-voting Government representatives on the Authority during the reporting period.

Ms Carolyn Smith
(until July 2015) / A/g Deputy Secretary of the Ageing and Aged Care Stream,
Department of Social Services
Ms Margot McCarthy
(from September 2015) / Deputy Secretary of the Ageing and Aged Care Group
Department of Health
Ms Kim Cull / Aged Care Pricing Commissioner
Mr Robert Montefiore-Gardner / Senior Adviser
Department of theTreasury

Authority Operations

The Authority met eight times during the reporting period:

  • 23 July 2015;
  • 10 September 2015;
  • 30 October 2015;
  • 10 December 2015;
  • 12 February 2016;
  • 30 March 2016;
  • 12 May 2016; and
  • 16 June 2016.

The Committee Principles 2014 and Operating Framework outline the Authority’s responsibilities in performing its functions. This includes the Authority’s ability to request research when formulating advice to the Minister, and the requirement that the Authority’s research and advice is published.

Key activities during the 2015-16 year

Task / Progress/Key Dates
The Authority’s annual report on the funding and financing of the aged care sector / On 31 July 2015 the Authority delivered its third report to Government
Monitoring of aged care reforms reports / Monitoring commenced on 1 July 2014 with the Authority providing monthly reports for the remainder of 2014 and quarterly reports throughout 2015 on the impact of the 1July 2014 financial reforms on the aged care sector
First quarterly report submitted to Government on 18September 2015
Second quarterly report submitted to Government on 21December 2015
Third quarterly report submitted to Government on 29February 2016
Financial issues affecting rural and remote aged care providers / On 19 January 2016 the Authority delivered its report to Government

Communication and Engagement with the Aged Care Sector

During the reporting period, the Authority held meetings and forums with representatives from the investment and financing sectors, providers and consumers. This engagement has been critical to the Authority’s understanding of the key issues, developments and challenges facing the sector, particularly the impact of the 1 July 2014 reforms. The Authority will continue with its engagement programme over the next 12 months, with a particular focus on the understanding and analysis of the sector.

Investors

In November and December 2015, the Authority held Roundtables in Sydney and Melbourne with members of the investment and financing community. These Roundtables allowed the Authorityto share the findings of its third annual report and hear stakeholder views on key issues facing the sector, including the impact of the 1 July 2014 reforms and longer term challenges facing the sector. Over 50 representatives from various organisations participated in the Roundtables.

Providers

In 2015-16, the Authority has been liaising closely with the provider peaks including:

  • Leading Age Services Australia (LASA);
  • Aged and Community Services Australia (ACSA);
  • Catholic Health Australia (CHA);
  • The Aged Care Guild; and
  • Uniting Care.

The Authority will continue to liaisewith the provider peaks.

Other Stakeholders

The Authority presented at various forums during 2015-16. Stakeholder engagement continues to be a vital activity to inform the Authority’s ongoing key activities and subsequent advice to Government. Forums attended during 2015-16 include:

  • The Aged and Community Services New South Wales/Australian Capital Territory Board
  • The Aged and Community Services Finance Forum
  • The Aged Care Leaders Symposium
  • The South West Aged Care Alliance
  • The Independent Agencies for Older Australians
  • The Aged Care Informatics Forum 2015
  • The Aged and Community Services Australian Capital TerritoryForum
  • The Leading Age Services Australia National Finance Seminar
  • The Leading Age Services Australia Queensland and Victoria Forum
  • The Consumer Choice and Control in Home and Community Care
  • The Aged and Community Service Northern Regions Conference
  • The Leading Age Services Australia Victoria rural Mini Conference
  • The 2016 International Federation on Ageing 13th Global Conference
  • The Aged and Community Services Australia Finance Forum Symposium
  • The Leading Age Services Australia Victoria and Tasmania State Congress 2016

Contractors and Consultants

The following firms were engaged to provide services for the Authority.

Contractor / Description
Forms Administration Pty Ltd, KPMG and the Australian Population and Migration Research Centre (APRMC) from the University of Adelaide / Consultancy services on Reform Monitoring and Financial Issues Affecting Rural and Remote Aged Care Providers
Deloitte Access Economics / Consultancy services to assist with the production of the Authority’s 2015 and 2016 reports on the Funding and Financing of the Aged Care Sector
CanPrint Communications Pty Ltd / Printing of the Authority’s 2015 Report on the Funding and Financing of the Aged Care Sector

ACFA Work Plan

Project / Key date
Advice to inform the 5 year review of the aged care reforms, 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. / 30 April 2017
Advice on alternative arrangements to the Bond Guarantee Scheme for ensuring the protection of lump sum accommodation payments / 30 April 2017
2017 Annual Report on the funding and financing of the aged care sector / 30 June 2017
Advice on the use of the Base Interest Rate for certain lump sum refunds to consumers / 30 June 2017

2015-16 Operations Report of the Aged Care Financing Authority1