Optimising ACFI to fund quality care and what the resident pays

Affordability is an important consideration for those entering permanent care. Our specialist Lifestyle and Care advisers have helped thousands of families achieve their preferred outcome when navigating the admission process by understanding the care costs and how they can be funded.

In this article, and in partnership with aged care funding instrument (ACFI) specialists Mirus Australia (Mirus) , we take a closer look at the complexities of a resident’s means tested care fee. There will also be a webinar on this topic on Thursday, 3rd September 2020.

What is the means tested care fee?

The means tested care fee (MTCF) is a co-contribution by the resident to their cost of care and the amount is dependent on their personal financial circumstances. It cannot exceed their ACFI which in turn is determined by their clinical care needs.

Residents with few means are not required to pay a MTCF while wealthy residents may be required to contribute up to the annual and lifetime caps. The fee is assessed by Centrelink or the Department of Veterans’ Affairs (DVA) and is determined by the resident’s assets and income in excess of minimum thresholds.

It is important to note that the amount a resident contributes does not impact the amount the facility will receive in ACFI funding. Rather, it determines how much will be paid by the resident, with the balance paid by the government.

Mirus advises Commonwealth Government supplements and subsidies provide up to 62% of facilities revenue. The subsidies not only provide for care but the delivery of care services to the resident. Australian Government expenditure on residential care in 2018-2019 was $13 billion, up from $12.2 billion in 2017-2018

What is ACFI?

ACFI is an assessment of the day-to-day care needs of the resident and is based on twelve questions across three domains; activities of daily living, behaviours and complex care. Residents are assessed as requiring either low, medium or high-level care across each of these domains. Dollar values are then assigned and, when added together, determine the resident’s daily rate of ACFI subsidy.

As ACFI is based on a resident’s needs, Mirus highlighted the importance that operators look at how they can optimise their ACFI funding to ensure they minimise any mismatch between the ACFI received and funding for the resident’s care needs. In the upcoming webinar, Mirus will take a closer look at this along with the importance of having a process to submit a new ACFI appraisal as the needs of a resident changes.

Mirus notes that as part of the appraisal process a facility needs to provide evidence of a resident’s care needs. They recommend the appraisal be quality checked before submission to Services Australia who will validate the appraisal prior to payment. They also noted the payment should be tracked through the Medicare statement to ensure the correct subsidy is being received.

How does the resident co-contribution work?

Unlike the basic daily care fee which is payable by every resident, the means tested care fee is based on a resident’s combined income and assets and is only payable by those who have a calculated amount greater than the means tested amount – currently $58.19 per day.

For those who are required to contribute, the amount they pay cannot exceed their ACFI and is limited to the annual and lifetime caps ($28,087.41 and $67,409.85 respectively from 20 March 2020 to 19 September 2020). 

Residents who choose not to complete an assets and income assessment will generally be required to pay a MTCF equal to their ACFI subsidy until they reach their annual and lifetime caps.