Quarterly fee reconciliation process to determine ongoing aged care fees 23 May 2018

Blog / Aged Care

The Department of Human Services conducts a quarterly fee reconciliation process to determine ongoing care fees on 1 January, 20 March, 1 July and 20 September each year.
 
The amount of means tested care fee and/or accommodation contribution payable is impacted by:

  • changes in the residents means tested amount
  • changes in government subsidies payable to aged care facilities
  • for means tested care fee only, residents reaching their annual or lifetime caps.1
 
As fees are adjusted quarterly, in some cases it can take several months for a client’s fees to be adjusted for changes in circumstances.

QUARTERLY REVIEW

The quarterly review process compares the means test care fee and/or accommodation contribution that should have been paid in the previous quarter with the amount actually paid by the resident. It also sets the fees to be paid for the next quarter.
 
When reviewing the fees paid in the previous quarter:
  • Overpayments - Where the resident has overpaid fees, such as where their means tested amount reduces during the previous quarter resulting in a reduction in means tested fees, the Department of Human Services will refund the overpaid amount.  This refund is then paid to the aged care facility who must pass on the refund to the resident.
     
  • Underpayments - Where the resident has underpaid fees, such as where their means tested amount increased during the previous quarter resulting in an increase in means tested fees, they will not be asked to pay arrears. However they will receive notification that the higher level of fees is payable from the beginning of the next quarter.

OUR COMMENT IS

The Aged Care Fee Assessment section of the Department of Human Services have advised that where a client has underpaid fees in the previous quarter, they will not be asked to pay arrears. However, if they are also due a refund, the amount of the refund will be reduced by the amount of the underpaid fees

EXAMPLE: UNDERPAYMENT

Judith is an existing resident of a residential aged care facility. On 1 February 2018, she advised the Department of Human Services that her bank account balances had increased. This resulted in an increase in her means tested fee from $4 to $5 per day.
 
As part of the quarterly fee reconciliation process, it is determined that Joan has underpaid her means tested care fee for the previous quarter. However she will not be asked to pay this amount.
 
Joan will receive a letter stating that for the following quarter commencing 20 March 2018, Joan will be required to pay $5 per day.

EXAMPLE: OVERPAYMENT

Bob is an existing resident of a residential aged care facility. On 1 February 2018, he pays a Refundable Accommodation Deposit (RAD) to the aged care facility. Prior to paying the RAD the funds were in a bank account subject to deeming. As a result of paying the RAD, Bob’s assessable income is reduced which reduces his means tested amount.
 
He notifies the Department of Human Services of his change in circumstances within 14 days. This results in a reduction in his means tested fee from $10 to $5 per day from the date of notification.
 
As part of the quarterly fee reconciliation process, it is determined that Bob has overpaid his means tested care fee for the previous quarter.  Bob is entitled to a refund of the overpaid amount which will be sent from the Department of Human Services to the aged care provider.  The aged care provider is required to refund this amount to Bob.
 
Bob will receive a letter stating the amount of refund and the fees payable for the following quarter commencing 20 March 2018. Bob will be required to pay $5 per day.

ANNUAL AND LIFETIME CAPS

The quarterly fee reconciliation process also determines when residents means tested fees have reached their annual or lifetime caps.
 
However, it can take several months before the resident and the aged care facility are notified that a resident has reached their annual or lifetime cap therefore aged care residents will always overpay their means tested fees in this situation. A refund will then be issued through the quarterly fee reconciliation process.

LETTERS

The Department of Human Services issues a letter to the resident, and their nominee, when:
  • A refund is due, or
  • Means tested fees or accommodation contributions for the next quarter have:
    -  Increased by 10 cents or more per day, or
    -  Decreased by 1 cent or more per day.

AD HOC REVIEWS

Residents can request an ad hoc review if their circumstances change and they want their fees and charges reviewed outside the quarterly review process.
 
If a new fee is set after an ad hoc review, the new rate applies from the date the review takes place. This may be beneficial where the change in circumstances results in a fee reduction.  
 
However if the review results in an increase in fees, requesting an adhoc review may disadvantage the client compared to the quarterly review process as the increase applies from the date of review rather than the beginning of the next quarter.


1. Annual cap is $26,566.54 and lifetime cap is $63,759.75 (20 Sept 2017 to 19 March 2018)



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Disclaimer and Warning
The information above is of a general nature only.  It should not be used as a source to make financial decisions.  It's also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status.  We recommend that if you are looking for advice on this matter, you should contact us .


 


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