Frequently Asked Questions

Residential Care - Higher Accommodation Supplement

Q: What is the higher accommodation supplement?

A: The Government pays an accommodation supplement for residents who are eligible for Government assistance with their accommodation costs.  From 1 July 2014, the maximum level of this supplement will increase to $52.49 (1 July rate) per day. This increased accommodation supplement will apply to aged care homes that are newly built or significantly refurbished on or after 20 April 2012.

The Government will continue to pay the lower accommodation supplement of approximately $34 per day to facilities that are ineligible for the higher supplement.

Q: How do I apply for the higher accommodation supplement?

A: If your service is delivered in a facility that has been:

  • newly built (completed on or after 20 April 2012), you do not need to apply. Your service will be identified by the Department of Social Services using information obtained through existing processes; or
  • refurbished (completed on or after 20 April 2012), you will need to apply to the Department for a determination that your service is ‘significantly refurbished’.

If your service is planning to undertake a significant refurbishment, you may apply to the Department for pre-approval. Please note that pre-approval is not mandatory. The higher supplement will not be paid until all criteria have been confirmed as met at the completion of the refurbishment. 

Once applications are open, you can apply for the higher supplement by submitting an appropriate application form to the Department.

Q: Will the higher accommodation supplement only apply to residents entering the facility after 1 July 2014?

A: No. The higher accommodation supplement will be payable on behalf of all residents who qualify for Government assistance with their accommodation costs in eligible facilities.

Q: What is meant by “completed on or after 20 April 2012”?

A: For newly built services, the completion date will be taken to be the date on which the last constructed or converted building was deemed suitable for occupancy by state/territory building authorities, where applicable. Otherwise, the completion date will be taken to be the date on which the facility was deemed suitable for the delivery of Government-funded residential aged care.

For refurbished facilities, the completion date will be taken to be the later of either the date on which the refurbished facility was deemed suitable for occupancy by state/territory building authorities or the date on which all work involved in the refurbishment was finished.

Staged projects – newly built service or significantly refurbished service

Where a staged project started before 20 April 2012 and the most recent stage was completed on or after 20 April 2012, the facility will be taken to have been completed on or after 20 April 2012. It will need to be clear that all work (completed before and after 20 April 2012) was part of one clearly identified project.

Q: When will the higher accommodation supplement be paid to eligible facilities?

A:For newly built facilities, the higher supplement will be payable from the later of either 1 July 2014 or the date on which the new facility was completed.

For eligible applications relating to completed refurbishments:

  • If the refurbishment was completed before 1 July 2014 and the application for determination was received on or before 31 July 2014, the higher accommodation supplement will be paid from 1 July 2014; or
  • In any other case, the higher accommodation supplement will be paid from the day the application was received.

For services in facilities with proposed refurbishments that received pre-approval, the higher supplement will be payable from the date on which confirmation of the completed refurbishment is received in the Department, provided all criteria have been satisfied.

Q: What is a ‘significantly refurbished’ facility?

A: For a facility to be regarded as significantly refurbished: 

  • The cost of the refurbishment must at least equal a minimum monetary spend amount calculated on the number of care recipient rooms in the facility.
  • The refurbishment must have made significant improvements and upgrades which directly benefit residents, particularly residents who qualify for assistance with their accommodation costs.
  • The refurbishment must provide benefits for at least 40 per cent of residents (e.g. having a refurbished bedroom) or an extension to the facility must have increased the total number of care recipient rooms by 25 per cent.
  • The proportion of the total number of care recipient rooms available to residents who qualify for assistance with their accommodation costs must not have been reduced after the refurbishment.
  • The relevant costs must be capitalised in accordance with Australian accounting standards.
  • The work must have been completed on or after 20 April 2012.

Full details of the eligibility criteria are in the Subsidy Principles 2014.

Q: How do I work out the ‘minimum monetary spend’ required to be met by a significant refurbishment?

A: This minimum value is calculated using the following formula:

Total number of care recipient rooms × 40% × $25,000

Notes:

  • One care recipient room may not necessarily be equivalent to one physical bedroom.  The number of care recipient rooms that one physical bedroom is equivalent to is determined by the number of care recipients that can be accommodated in the bedroom. For example, if four care recipients share a bedroom, this is considered to be four care recipient rooms.
  • The ‘total number of care recipient rooms’ to be used in the above calculation is equivalent to the lower of either the total number of care recipient rooms (occupied and unoccupied) before commencement of the refurbishment or after completion of the refurbishment.
  • Applying the 40% to pre- or post-refurbishment numbers (whichever is the lower) allows for projects that have resulted in downsizing (where the post-refurbishment number is lower) to be catered for.

Q: What can be included in the ‘refurbishment cost’?

A: The refurbishment cost is taken to be the actual expenditure relating to the refurbishment project, unless the project included fire safety improvements*.

*Where a refurbishment project includes fire safety improvements, expenditure relating to such improvements can only account for up to 25 per cent of the minimum monetary spend amount. Any expenditure relating to fire safety improvements in excess of this allowance must not be included in the refurbishment cost.

For example, if the required minimum monetary spend amount is calculated to be $1,000,000 then only $250,000 of fire sprinklers retrofitting expenditure can be counted in the refurbishment cost and at least $750,000 would need to be spent on other broader significant refurbishment work.

Q: Why can’t the full cost of installing fire safety improvements be included in the refurbishment?

A: The higher accommodation supplement is designed to encourage the development of additional capacity in the residential care sector and enhanced quality and amenity of accommodation for residents. The Commonwealth welcomes the move of service providers to improve fire safety in their facilities and recognises the significant investments involved. The ‘significant refurbishment’ policy has a broader policy intent, which seeks to recognise facilities which undertake refurbishments that provide additional benefits over and above fire safety improvements.

Q: What areas of the service can be significantly refurbished?

A: Refurbishments should be targeted at areas that are accessible to and for the use of residents, particularly those residents who qualify for assistance with their accommodation costs. Examples of areas that can be refurbished include:

  • Upgrade to care recipient rooms (including en-suites), shared toilets/bathrooms;
  • An extension to the service (e.g. new accommodation wing)
  • Improvements to existing internal infrastructure (e.g. rehabilitation areas)
  • Improvements to existing external infrastructure (e.g.  outdoor activity areas)

Q: I want to improve the privacy and amenity of existing resident rooms but this will mean fewer beds – is this allowed under the criteria for a significant refurbishment?

A: Yes. Refurbishments that reduce the total number of care recipient rooms within the facility are eligible, provided that all the criteria are met.

Q: What if I don’t meet the Supported Resident Ratio?

A: Where a facility has been newly built on or after 20 April 2012 or determined by the Department to be significantly refurbished but the supported resident ratio is below the amount set in the Minister’s Determination (currently more than 40 per cent), the maximum accommodation supplement is reduced by 25 per cent for each day the ratio is not met.

For example, for a newly built or significantly refurbished service in receipt of the maximum accommodation supplement of $52.49 (1 July 2014 rate), the supplement would be reduced to approximately $39.37 for each day the supported resident ratio is not met.  As soon as the service’s ratio rises above the 40 per cent threshold, payment of the higher supplement would resume immediately.

Current at 27 June 2014

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