Summary of the Residential Aged Care Funding Reform Changes

The Aged Care Act 2024 updates a number of the funding mechanisms for aged care services, with the intention of increasing fairness for residents, strengthening consumer protections, and making aged care more sustainable for both the Government and Providers.

The information below summarises these updates and explains how Inerva Cloud ERP and Resident Select supports you to comply with them.

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‍Hotelling Supplement Contribution

• What’s Happening: While the Hotelling Supplement continues, some residents will be required to pay a contribution, based on their means.
• Inerva Cloud ERP: The new Hotelling Supplement will be natively built into the existing Funding Template tool to drive automated billing, just like your other fees and subsidies.
• Resident Select: Updated means testing calculators allow for quotes to automatically present the likely contributions a resident will need to pay based on their circumstances, allowing for confident, informed discussions with prospective residents.

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Non-Clinical Care Contribution

• What’s Happening: Replaces the Means Tested Care Fee. The determination of funding for care is being split between clinical and non-clinical. Government will fund all clinical care costs. Government may also fund some or all non-clinical care costs, but some residents will be required to contribute to their non-clinical care, based on their means test. Contributions will be capped to 4 years or $130,000, whichever is reached sooner.
• Inerva Cloud ERP: The new Non-Clinical Care contributions will be built into the Funding Template tool for automated billing. Inerva Cloud ERP’s cap tool will also be updated to manage the new Non-Clinical Care contribution fiscal and durational cap.
• Resident Select: Like the Hotelling Supplement Contribution, we have updated our means testing calculators to allow for quotes to automatically present the likely contributions a resident will need to pay based on their circumstances, allowing for confident, informed discussions with prospective residents.

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RAD/RAC Retentions

• What’s Happening: Providers must retain up to 2% of a resident’s deposit annually for 5 years.
• Inerva Cloud ERP: Automatic management of retentions on clients with RADs/RACs, calculating their daily retention rate based on the deposit balance each day, and accurately retaining the correct amount each cycle.
• Resident Select: Resident Select’s quotes will provide a retention guide based on their potential deposit options, allowing prospective residents to understand what retentions mean for them.

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Indexation of DAPs

• What’s Happening: Rate no longer fixed on entry, but indexed twice per year.
• Inerva Cloud ERP: The indexation of DAPs will be managed automatically and driven from the centralised recording of the indexation factors.
• Resident Select: Quotes and agreements will be updated with the relevant wording that explain the indexation of DAPs.

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HELF replaces Additional and Extra Service Fees

• What’s Happening: Providers can continue to sell services that are not covered by the Act, but the rules governing how those services are sold and managed are changing.
• Inerva Cloud ERP: HELF fees can be billed through the system with full transparency on the client invoice.
• Resident Select: Resident Select will contain a new HELF management tool for service and bundle configurations, and a HELF quote and agreement workflow to manage the sales opportunities

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