Finally, ACFA advises against providers being able to opt-out from a scheme and provide their own guarantees, as it is likely to impair the sustainability of a scheme by necessitating a higher levy from fewer participants. It would also be complex to administer and manage. The prudential review ACFA’s review of the existing Scheme and alternatives is taking place in parallel to two other significant reviews. Government consideration of the Scheme should take into account the perspectives of all three related reviews. The Department is reviewing the role and effectiveness of the Prudential Standards, as well as current reporting and compliance processes through a project undertaken by an external consultant. This project will evaluate the adequacy of existing arrangements, including prudential standards in the context of protecting the interests of all stakeholders, including care recipients and the Government, by ensuring prudent management of lump sums held by providers. ACFA draws particular attention to this review, as it is widely acknowledged that prudential standards and monitoring are critical protections for aged care consumers, while the Guarantee Scheme is the safety net that protects consumers’ investments when other measures have not. The second review currently underway is the Aged Care Legislated Review, which is required by the Living Longer Living Better Act 2013, and which will consider the effectiveness of the Guarantee Scheme. This ACFA report and the report of the review of prudential standards are expected to be considered by the Government in the context of the Aged Care Legislated Review, which is scheduled to report by 1 August 2017.
Finally, ACFA advises against providers being able to opt-out from a scheme and provide their own guarantees, as it is likely to impair the sustainability of a scheme by necessitating a higher levy from fewer participants. It would also be complex to administer and manage. The prudential review ACFA’s review of the existing Scheme and alternatives is taking place in parallel to two other significant reviews. Government consideration of the Scheme should take into account the perspectives of all three related reviews. The Department is reviewing the role and effectiveness of the Prudential Standards, as well as current reporting and compliance processes through a project undertaken by an external consultant. This project will evaluate the adequacy of existing arrangements, including prudential standards in the context of protecting the interests of all stakeholders, including care recipients and the Government, by ensuring prudent management of lump sums held by providers. ACFA draws particular attention to this review, as it is widely acknowledged that prudential standards and monitoring are critical protections for aged care consumers, while the Guarantee Scheme is the safety net that protects consumers’ investments when other measures have not. The second review currently underway is the Aged Care Legislated Review, which is required by the Living Longer Living Better Act 2013, and which will consider the effectiveness of the Guarantee Scheme. This ACFA report and the report of the review of prudential standards are expected to be considered by the Government in the context of the Aged Care Legislated Review, which is scheduled to report by 1 August 2017.
the_protection_of_residential_aged_care_accommodation_lump_sum_accommodation_payments.docx