Ageing Australia's recommendations for accommodation pricing reform
Additional forms of support, such as grants and interest free loans, could encourage investment in thin markets and regional areas, the peak recommends.
The peak body for aged care providers has published its submission to the Accommodation Pricing Review.
Aged Care and Seniors Minister Sam Rae announced last month policy expert Nigel Ray PSM and academic Associate Professor Nicole Sutton will lead the Aged Care Accommodation Pricing Review, a recommendation of the Aged Care Taskforce.
Ageing Australia makes four recommendations:
- An "immediate" increase in the accommodation supplement. In the longer-term, the accommodation supplement should reflect the operator's cost of capital, and the varying risk factors different operators can face. The accommodation supplement should also reflect capital investment types, such as greenfield developments or refurbishments. Higher rates may be appropriate for new developments to recognise their greater capital intensity.
- Ageing Australia supports a "graduated, tiered or sliding scale" for the accommodation supplement. Providers unable to meet the fixed 40% ratio for supported residents can be encouraged to prioritise non-supported residents to make up for the lost income - exacerbating "equity and access challenges".
- "Floor" and "fixed" rates for the Maximum Permissable Interest Rate (MPIR) should be considered. Quarterly adjustments create volatility and the current mechanism does not align with cost drivers, the peak body states.
- The Department of Health, Disability and Ageing asked for feedback on making the Daily Accommodation Payment (DAP) the default. Ageing Australia urged caution on such a change. While it could improve transparency and comparability for consumers, it could also "amplify capital fluctuations", "complicate capital planning" and "increase capital risk". It could also create uncertainty about affordability and potential refunds for consumers.
Ageing Australia also said additional forms of support, such as Government grants or interest free loans, should be considered to encourage investment in thin markets and regional areas.
Download the submission here.
