Assessment Manual

Applications for the Higher Accommodation Supplement for services which have undertaken a Significant Refurbishment

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1. Contents

1. Contents...........................................................................................................................2

1. Introduction.......................................................................................................................31.1. Purpose.....................................................................................................................3

1.2. Protected Information................................................................................................32. Preliminary application and assessment process............................................................3

2.1. Receipt of Applications..............................................................................................32.2. Completeness Check.................................................................................................3

2. Assessment Process........................................................................................................42.1. Initial Assessment......................................................................................................4

2.2. Seeking further information........................................................................................42.3. Assessment...............................................................................................................5

2.3.1 Standard and Pre-approval Applications............................................................52.3.2 Confirmation of Completion of a Pre-Approved Significant Refurbishment......12

2.4. Assessment finalisation...........................................................................................133. Definitions.......................................................................................................................14

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1. Introduction

1.1. PurposeThis manual has been developed for the use of Department of Social Services (DSS) officers to support the assessment of applications from approved providers seeking a determination that their service is significantly refurbished.

The manual should be read in conjunction with the relevant sections of the Aged Care Act 1997 (the Act), the Subsidy Principles 2014 (the Principles), the Higher Accommodation Supplement application forms and the Guidelines for Applying for the Higher Accommodation Supplement.

1.2. Protected InformationAssessors must familiarise themselves with Division 86 of the Aged Care Act 1997, which relates to the protection of information, including the use and disclosure of protected information.

Protected information is defined under section 86-1 of the Act as information that:

a. was acquired under or for the purposes of the Act; and

b. either :

i. is personal information; or

ii. relates to the affairs of an approved provider; or

iii. relates to the affairs of an applicant for approval under Part 2.1; or

iv. relates to the affairs of an applicant for a grant under Chapter 5.

All information provided by approved providers applying for the Higher Accommodation Supplement must be treated in accordance with the protected information provisions of the Act.

2. Preliminary application and assessment process

2.1. Receipt of ApplicationsApplications may be received via a web based form, email or hard copy. They are entered in the Higher Accommodation Supplement database. Each application will be allocated a unique reference number. The statutory timeframes for a determination by the Secretary will commence from the date of receipt of a valid application by the Department.

2.2. Completeness CheckApplicants are required to submit their applications to either the Department or Forms Administration on behalf of the Department.

Upon receipt of an application, an initial check will be conducted by Forms Administration to confirm the application is complete including confirming the:

applicants are approved providers;

information has been provided on the approved form; and

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application contains all the required information in a clear and comprehensible form (all required fields on the application form have been appropriately completed; a supporting statement has been provided, the relevant supporting evidence has been provided).

Where all requirements to make a valid, complete application have been satisfied, Forms Administration will forward the application to the Department for assessment.

Where all requirements to make a valid, complete application have not been met, Forms Administration will contact the applicant and request that they either provide the missing information or resubmit their application.

2. Assessment Process

2.1. Initial AssessmentOn receipt of a complete application by the Department, the application will be assigned to a DSS officer for assessment. The first step will be for the assessor to undertake a high level review to determine if sufficient information has been provided to enable the delegate to confirm the legislative criteria have been met.

If the assessor is satisfied the application contains sufficient information, they will commence the assessment process. If an assessor identifies further information is required, the assessor may seek further information.

2.2. Seeking further informationThe Principles outline the criteria the Secretary, or their delegate, must be satisfied are met in order to make a determination that a residential aged care service is Significantly Refurbished. If the initial assessment determines insufficient information has been provided to enable this determination to be made, a request will be made of the applicant to supply further information.

Where the need for further information is identified, the assessor will determine the appropriate form of contact with the applicant. All communication between the assessor and the applicant is required to be logged in the Higher Accommodation Supplement database. If the additional information required is minor in nature, the assessor may choose to contact the applicant by telephone and/or email.

Where the application lacks sufficient information in a number of areas and/or the issue of concern is complex, a formal request for further information (as provided for under section 55 of the Principles) will be made by the assessor. The assessor will send the applicant a letter which clearly outlines the issue(s) requiring clarification and the further information sought. Every effort must be made to ensure all further information requests are covered within a single request.

The Principles require the Secretary or their delegate to provide written notification of the standard approval and pre-approval application outcome within 60 days after receipt of a valid application, unless the Department has made a request for additional information.

Where a request for further information has been made under section 55 of the Principles, the period of time starting from the date of request through to and including the date of receipt by the Department of the additional information is not counted towards the 60 day period.

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The applicant is required to provide the additional information within 28 days, or earlier if specified, after receiving the request. The application is taken to be withdrawn if a response is not provided within the 28 day timeframe.

2.3. AssessmentApplications deemed to contain sufficient information are assessed against the significant refurbishment eligibility criteria defined in the Principles.

The approach to assessing each of the application types is set out in the following sections:

2.3.1 Standard and Pre-Approval Applications.

2.3.2 Confirmation of Completion Applications.

2.3.1 Standard and Pre-approval Applicationsi. Refurbishment completion date

Standard approval may only be sought after completion of the refurbishment or where the refurbishment is sufficiently advanced to qualify based on the work already completed.

Section 52(2)(a) of the Principles require significant refurbishment projects to have been completed on or after the 20 April 2012 to be eligible for the higher supplement. The completion date of a refurbishment 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.

Where a staged project started before 20 April 2012 and the most recent stage was completed on or after 20 April 2012, the refurbishment will be taken to have been completed on or after 20 April 2012. However, for staged projects it must be clear that all work (completed before and after 20 April 2012) was part of one distinct refurbishment project.

If the refurbishment consisted of:

an extension to the facility only (e.g. building a new accommodation wing), the completion date is the date on which the occupancy certificate (or equivalent) was issued for the extension.

alterations, updates, upgrades or other improvements to existing parts of the facility, the completion date is the date on which all work involved in the refurbishment was finished.

both an extension and alterations, updates, upgrades or other improvement to existing parts of the facility, the completion date is the later of either the date on which the occupancy certificate (or equivalent) was issued or the date on which all work involved in the refurbishment was finished.

Assessors are to review the completion date provided in the application and the date on the occupancy certificate (or equivalent) where applicable, to verify this criterion has been satisfied.

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ii. Significant difference

The refurbishment is required to include alterations, updates or other improvements that have resulted in the service being significantly different in form, quality or functionality after the refurbishment.

The assessor will review the information provided in the application for evidence that the refurbishment has, or will, result in a significant difference in form, quality, or functionality to the service. The improvements to the service should be readily discernible and clearly demonstrate a significant enhancement of amenity and accommodation accessible to and for use by care recipients.

iii. Accessible and for the use of care recipients

The assessor will review the information provided in the application to determine if a significant proportion of the refurbished areas of the service are, or will be, accessible to, and for the use of the care recipients.

Examples of refurbishment areas which satisfy this criterion include: care recipients’ rooms (including en-suites), shared toilets/bathrooms; areas available to all care recipients irrespective of their means; common areas for care recipients; and rehabilitation areas.

While some work to areas that are not accessible to, or for the use of, care recipients is permitted, in general the costs of refurbishment work to ‘non-accessible, non-usable areas’ should not comprise more than 10 per cent of the minimum monetary spend amount. However, where the associated costs exceed 10 per cent, assessors will consider the significance, scope, and expenditure of the overall refurbishment in assessing whether this criterion has been satisfied.

Examples of areas that are not considered to be accessible to, and for the use of, care recipients include:

administrative areas;

vehicle garaging areas; and

areas for storing cleaning or maintenance products or equipment for use either internally or externally.

A refurbishment project which consists solely of maintenance related work will not be determined to be a significant refurbishment.

Building work, such as, painting, electrical, plumbing, tiling, finishing etc., can be included within a refurbishment project, where the project plan and documentation demonstrates that this work is part of the significant refurbishment rather than normal maintenance activity.

Where the assessor is unable to determine if a refurbished area is or is not accessible to or for the use of care recipients, further information will be sought from the applicant.

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iv. Significant benefits for eligible care recipients

The assessor will review the information provided in the application to determine if the refurbishment does, or will, provide significant benefits to eligible care recipients.

Examples of refurbishments that are considered to provide significant benefits to care recipients include:

improvements to care recipients’ rooms that are available to eligible care recipients;

the availability of care recipients’ rooms within a new accommodation wing to eligible care recipients;

new or improved common areas that are accessible to eligible care recipients;

new beds for eligible care recipients;

ceiling hoists and other care related equipment for eligible care recipients;

entertainment equipment for use by eligible care recipients.

Note: “Eligible care recipients” is defined in the Definitions section.

The changes would need to be significant in nature, as opposed to minor upgrades to facilities and/or work that consisted solely of maintenance related activities. The refurbished areas must also be accessible to, and for the use of eligible care recipients.

The above list is not exhaustive; other types of refurbishment may meet this criterion,

v. Minimum monetary spend amount

Section 52(2)(h) requires the refurbishment cost in relation to the service to be at least the minimum monetary spend amount.

The minimum monetary spend amount is worked out by multiplying $25,000 by 40 per cent of the lower of:

a) the total number of care recipient rooms in the service before the commencement of the refurbishment; and

b) the total number of care recipient rooms in the service after the completion of the refurbishment.

The assessor will review the information provided under items 5 and 6 of the application form to determine the number of care recipient rooms that will be used to calculate the ‘minimum monetary spend amount’ for the service.

For standard applications, the assessor is required to verify the number of care recipient rooms stated on the application form by reviewing the supporting evidence provided with the application and the number of current operational (including extra service) places recorded in the National Approved Provider System (NAPS) database for the service. If the number of operational places in NAPS differs from the application information, the assessor will seek clarification from the applicant.

For pre-approval applications, the assessor will verify the number of care recipient rooms stated on the application form by reviewing the supporting evidence provided with the application.

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vi. Available rooms for eligible care recipients

The assessor will determine (using the information provided in the application, in conjunction with information held by the Department) whether the proportion of care recipient rooms available to eligible care recipients after completion of the refurbishment is not, or will not, be lower than the proportion before commencement of the refurbishment. “Available” means that eligible care recipients would not be ordinarily excluded from accommodation in those rooms (eg. the room is not an extra-service room).

Care recipient rooms are required to be potentially available to eligible care recipients, however they may not necessarily be continuously occupied by eligible care recipients. This recognises that on occasions, a particular care recipient room may be occupied by a care recipient who is not eligible for Government support with their accommodation costs.

Assessors will consider any current and active allocation of Extra Service places for the service as part of this process. The total number of places minus the active allocation of Extra Service places is the number of care recipient rooms that could be expected to be available to eligible care recipients pre and/or post the refurbishment.

Note: “A care recipient’s room” is defined in the Definitions section.

vii. Minimum required benefits

Assessors will determine whether at least one of the requirements outlined in Section 52(2)(f) has been, or will be, met.

That is, the refurbishment:

a) Has or will result in at least 40 per cent of the care recipients being provided with residential care through the service having a care recipient room that has been significantly refurbished; or

b) Has or will provide a significant benefit to at least 40 per cent of the care recipients being provided with residential care through the service; or

c) Has or will consist of an extension to the service involving an increase of at least 25 per cent of the number of care recipient rooms in the service.

The assessor considerations for each of the above criteria are as follows:

a) Has or will result in at least 40 per cent of the care recipients being provided with residential care through the service having a care recipient room that has been significantly refurbished.

The 40 per cent requirement applies to the total number of operational places in the service at the time of application.

The current number of operational places is to be determined by reviewing service details in the NAPS database.

b) Has or will provide a significant benefit to at least 40 per cent of the care recipients being provided with residential care through the service.

In cases where the main focus of the service refurbishment is on common areas, the refurbishment must significantly benefit at least 40 per cent of care recipients being provided with care in the service.

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Only undertaking a refurbishment of common areas in the facility will not generally satisfy this criterion, as it is expected that common area refurbishments are supplemented by some refurbishment of care recipient rooms. However, refurbishments of this type are to be considered on a case-by-case basis, with consideration given to the extent of improvements made to the common areas and the resulting benefits to care recipients.

c) has or will consist of an extension to the service involving an increase of at least 25 per cent of the number of care recipient rooms in the service.

To satisfy this criterion an extension to the service must increase care recipient rooms by 25 per cent. This requirement relates to the total number of operational care recipients rooms in the service, not just the rooms that are occupied at the time of application.

Where a provider undertakes an extension that does not increase the number of care recipients’ rooms by 25 per cent, the provider may meet the requirements of section 52(2)(f) if, in combination with the additional care recipients’ rooms in the new wing, the approved provider makes additional significant improvements to existing care recipients’ rooms or common areas in the residential care service.

viii. Refurbishment costs

The refurbishment cost is equivalent to the total cost of the refurbishment project, unless fire safety improvements have been undertaken as part of the refurbishment.

The refurbishment cost is exclusive of the Goods and Services Tax (GST), it includes all the reasonable costs that were necessary to complete the refurbishment. Professional and consultant fees may be included where those fees are clearly linked to the scope of the project.

Fees that are outside of the scope of the project must not be included within the refurbishment cost. For example, in-house costs such as service management or administration. These are deemed to be operational costs and therefore are not eligible to be included within the refurbishment cost.

If when reviewing the supporting statement and supporting evidence the assessor determines there is a notable degree of difference between the scope of refurbishment work and the stated/estimated refurbishment cost, the assessor will seek clarification from the applicant regarding the work and associated costs.

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ix. What constitutes ‘fire safety improvements’?

For the purposes of the higher accommodation supplement, fire safety improvements are defined as the installation, alteration or upgrading of any of the following fire safety features in a residential care service:

a) Fire sprinkler system inclusive of tanks, pumps and mains etc. as applicable,

b) Fire hydrant system inclusive of tanks, pumps and mains etc. as applicable,

c) Fire hose reel systems,

d) Fire extinguishers,

e) Smoke detection and alarm system inclusive of fire indicator panel, break glass alarms, annunciator panels etc. as applicable,

f) Emergency lighting systems,

g) Exit signage systems.

Fire safety features that are incorporated into the design, configuration and construction of the building (i.e. tangible structural building features) are not included in the definition of fire safety improvement. For example:

Fire ratings to walls, floors, and ceilings;

Smoke walls (including doors and windows) to achieve compliance with Building Code Australia’s smoke compartmentalisation and construction of the building; and

Construction of exits including stairs and fire rated stair shafts, lift shafts and other building services shafts.

x. Treatment of fire safety improvement expenditure

Where a refurbishment project has or will include fire safety improvements, there is a cap on the amount of expenditure relating to these improvements that can be included in the refurbishment cost. This cap is equivalent to 25 per cent of the calculated minimum monetary spend amount. Expenditure relating to fire safety improvements up to and including the value of the cap can be included in the refurbishment cost.

Where the expenditure relating to installing fire safety improvement is greater than 25 per cent of the minimum monetary spend amount, the refurbishment cost is calculated using the following formula:

Refurbishment cost = A – (B – C), where:

A is the total cost of the refurbishment

B is the cost of the fire safety improvements

C is the amount that is 25 per cent of the minimum monetary spend amount in relation to the service.

The assessor will compare the eligible refurbishment cost amount to the minimum spend amount to verify section 52(2)(h) or 53(2)(g) of the Principles has been satisfied.

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xi. Costs capitalised as per Australian accounting standards

The relevant costs of the refurbishment project must be capitalised in accordance with the Australian accounting standards. Relevant costs are those which relate to structural improvements or other costs that can be depreciated because they relate to fixtures, fittings or anything that can be removed intact.

Sections 52(2)(e) 53(2)(d) of the Principles require the applicant to commit to capitalising the relevant costs of the refurbishment in accordance with the Australian accounting standards. If the applicant’s response to this item is ‘Yes’, no further assessment action is required, if the applicant’s response to this item is ‘No’ the assessor will seek further information from the applicant.

xii. The Supporting Statement

At a minimum, applicants are required to provide with their application the information specified under the Supporting Statement section of the application form.

When reviewing the supporting statement, the assessor will consider:

the work that has been/will be undertaken to benefit care recipients;

the differences in form, function and quality that have been made/will be made to the service as a result of the refurbishment;

the proportion of the refurbished facility which is/will be accessible to, and for the use of, eligible residential care recipients;

any areas that have been/will be refurbished that are not for the use of care recipients;

the significance of benefits to eligible care recipients as a result of refurbishments made to care recipient rooms and common areas.

If after reviewing the supporting statement and any other information provided, the assessor concludes insufficient information has been provided to determine if the eligibility criteria have been/will be met, further information will be sought.

xiii. The Supporting Evidence

Pre–Approval

Applicants are required to provide relevant proposed site, floor and/or building plans with their application. The assessors will use this material to confirm that the proposed refurbishment (as described in the supporting statement) is readily discernible and demonstrates a significant enhancement of amenity and accommodation for care recipients.

If the submitted plans do not clearly identify the proposed refurbished areas, further information, including submission of plans that visibly identify the changes to be made to the service, may be sought.

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Standard Approval

Applicants are required to provide a certificate of occupancy (or equivalent), if relevant and final site or floor building plans with their application. If these documents are not provided, the assessor will request the applicant submit these documents to enable an assessment of their application to be completed.

Some refurbishment projects may not require a local authority to issue a certificate of occupancy; if that is the case the requirement to provide a certificate of occupancy can be waived by the assessor. However, an alternative form of evidence confirming the completion date will be required from the applicant.

For the purposes of verifying whether Section 52(2)(a) of the Principles has been met, the date of issue of the certificate of occupancy is taken to be the completion date of the refurbishment project. To satisfy Section 52(2)(a) of the Principles, the date of issue of the certificate of occupancy (or equivalent) must be on or after 20 April 2012.

Due to varying state and local government practices, there may be some variation in the format and content of these documents. Assessors will determine if the document provided by the applicant relates directly to the refurbishment project for which the significant refurbishment determination is sought, and that the date of completion of that work is indicated on that document.

The applicant is also required to provide site, floor and/or building plans. The assessor will use this material to confirm that the proposed refurbishment (as described in the supporting statement) is readily discernible and demonstrates a significant enhancement of amenity and accommodation for care recipients.

If plans do not clearly identify the refurbished areas, further information including submission of plans that visibly identify those areas will be sought.

2.3.2 Confirmation of Completion of a Pre-Approved Significant Refurbishment

Only applicants who have received pre-approval should submit a Confirmation of Completion of a Pre-Approved Significant Refurbishment form.

The purpose of the form is for the applicant to confirm that the refurbishment of the service has been completed, to provide the date of completion, and the refurbishment cost. In addition, the applicant must review the information previously provided in the pre-approval application to ascertain whether there are any material differences between the proposed refurbishment work as described in the pre-approval application (i.e. significantly changed in scope, quality, form, functionality, types of work undertaken, etc.), and the actual refurbishment outcome.

Where the completed refurbishment is materially different from the pre-approved proposed refurbishment, an outline of the key aspects of the refurbishment that have differed is required.

In addition, if the final site, floor and/or building plans have differed materially from the proposed plans attached to the pre-approval application, the applicant is required to provide revised plans, which clearly identify the refurbished areas.

In cases where there is a material difference between the proposed refurbishment and the actual refurbishment, the assessor will review the pre-approval application material and

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other supporting evidence and undertake a comparison of the work that was proposed against that which was actually undertaken, as described in the confirmation of completion form.

Upon review of the scope and significance of the completed refurbishment, the assessor will determine if the refurbishment meets the eligibility criteria as defined in the Principles.

2.4. Assessment finalisationPrior to submitting a report and recommendations to the delegate, a peer review of the assessor’s report is to be undertaken by another assessor.

For reports recommending the delegate determine the service to be significantly refurbished, a high level review will be undertaken by another assessor.

For reports recommending the delegate refuse to determine the service to be significantly refurbished, another assessor will conduct a more detailed review.

The reviewing assessor may:

1. Agree with the recommendation; or

2. Make an alternative recommendation.

Where the reviewing assessor’s recommendation is in accordance with the first assessor’s recommendation, the reviewing assessor is to provide a brief statement attached to the report.

Where the recommendation is a different recommendation to that of the first assessor, the reviewing assessor will explicitly identify in the assessment report the factors of difference, and explain how those factors lead to a different assessment outcome in their view, which is to be attached to the report.

Following peer review, a completed assessment report is to be submitted to the delegate for consideration.

The assessment report provides a recommendation to the delegate on the conclusions reached by the assessor in relation to whether the applicant has satisfactorily met the legislative requirements outlined in the Principles.

The delegate will consider the application and the assessors’ reports, and then, taking into account the information in the application, and the analysis and recommendation(s) contained in the report, and the individual circumstances of the application, will reach a decision as to whether to approve the application or to refuse to approve the application.

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3. Definitions

Accommodation wingIncludes a building; a floor or level of a building; and an annex to a building that is used to provide accommodation for a care recipient being provided with residential care through the service.

Care recipient roomA room or part of a room intended to be occupied as personal space by a care recipient where this includes the bed used by a care recipient and the areas immediately around the bed.

Important: For each bedroom, the equivalent number of ‘care recipient rooms’ is determined by the number of care recipients that can be accommodated in the room. For example, if four care recipients share a bedroom, this is considered to be four care recipient rooms. If one care recipient resides in one bedroom and another in an adjoining bedroom (but with a shared bathroom), this is two care recipient rooms.

Eligible care recipientsEligible care recipients are those in respect of whom the accommodation supplement is payable.

For those care recipients in care before 1 July 2014, their eligibility for an accommodation supplement is based on the asset test undertaken when they first entered care. These care recipients are those defined as concessional, assisted or supported under clause 1 of Schedule 1 to the Aged Care (Transitional Provisions) Act 1997.

For those care recipients entering care on or after 1 July 2014, their eligibility for an accommodation supplement is based on the means test of their income and assets when they first enter care. These care recipients are those defined as low-means under section 5 of the Subsidy Principles 2014.

ExtensionA new and additional part of an existing care residential care service (e.g. a new accommodation wing).

Minimum monetary spend amountThe amount worked out by multiplying $25,000 by 40 per cent of the lower of:

a) the total number of care recipient rooms in the service before the commencement of the refurbishment; and

b) the total number of care recipient rooms in the service after the completion of the refurbishment.

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Operational placeAn operational place is one that is either occupied or available for the provision of Australian Government-funded aged care to an approved care recipient. It does not include places that have been approved, but are not yet operational.

Refurbishment costThe total cost of the refurbishment, or the proposed refurbishment, of the service unless fire safety improvements have been included in the project and the cost of such improvements is more than 25 per cent of the minimum monetary spend amount – in these cases the refurbishment cost is worked out using the following formula:

A – ( B – C )

where:

A is the total cost of the refurbishment.

B is the cost of the fire safety improvements.

C is the amount that is 25 per cent of the minimum monetary spend amount in relation to the service.

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