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Indexation of approved accommodation prices

14 Jul 2015

Since 1 July 2014, under section 29 of the Fees and Payments Principles 2014 (No. 2) (the Principles), providers are permitted to apply the relative Consumer Price Index (CPI) annually to an accommodation price approved by the Aged Care Pricing Commissioner.  The indexed price is substituted for the existing approved price without requiring additional approval from the Commissioner.

The process for indexation is that the CPI number for the most recent quarter is applied to the approved accommodation price.

Providers who had an accommodation price approved prior to 1 July 2014 are entitled to index prices from that date and the most recent quarter for that group of providers is the quarter to 30 June 2015.

A teething problem for the new indexation factor in the Principles is that at present we are still waiting for the release of the CPI number for the June quarter 2015.  It will be released by the Australian Bureau of Statistics on 22 July 2015. Accordingly, providers will not be able to apply the indexation until that data is released.

There is some discussion that the Principles could be amended in the future to overcome the delay caused by the release of the CPI. However until that time, or even if those amendments can be made, providers may continue to see delays.

If you need assistance with any of the issues raised in this update please contact Julie McStay, director and head of Aged Care and Retirement Living at Hynes Legal.