Lifetime Care and Support Fund
Section B – Performance Reporting
B.1 Organisational Overview
The Lifetime Care and Support Scheme (LTCSS) was established under the Lifetime Care and Support (Catastrophic Injuries) Act 2014 (LTCS Act) and commenced operation on 1 July 2014. The LTCSS provides reasonable and necessary on-going treatment and care to people who have been catastrophically injured as a result of a motor accident in the Australian Capital Territory, on or after 1 July 2014.
The scheme covers pedestrians, cyclists, motor bikes and motor vehicles so long as there is at least one registrable vehicle involved in the motor accident, regardless of where fault is attributable for the accident. As a result, it extends motor vehicle accident coverage for catastrophic injuries beyond what was previously available under Compulsory-third Party (CTP) Insurance to include those persons who may be considered to be at-fault, or someone who is involved in a single vehicle accident, or even a blameless accident.
The Lifetime Care and Support (Catastrophic Injuries) Amendment Act (No 2) 2016, which passed the ACT Legislative Assembly in May 2016, broadened the LTCS Scheme to cover private sector workers. The Scheme commenced covering work injuries from 1 July 2016. The inclusion of work accidents in the LTCSS applies to catastrophic work injuries that occur from 1 July 2016 and includes all types of injuries currently covered under the LTCS Scheme, such as spinal cord injuries, traumatic brain injury, amputations, severe burns and permanent blindness.
As a result, an injured worker who is a lifetime participant of the LTCS Scheme will no longer claim under Workers Compensation Act 1951 for lifetime treatment and care needs covered by the LTCSS. They will still be able to seek compensation for economic and non-economic loss.
As it is a no-fault scheme, the LTCSS reduces the stress on those injured and their families that has previously been associated with litigating claims to meet ongoing treatment costs. It ensures early access to medical and rehabilitation care. Further, as treatment and care is on-going, those injured no longer have to worry whether a lump sum payment will meet their needs for the rest of their life and whether they will receive the ongoing treatment and care they need.
Examples of treatment and care provided to participants in the Scheme include:
- medical treatment;
- rehabilitation;
- attendant care services; and
- home and transport modification.
For motor accident injuries, the LTCSS is funded by a levy on compulsory third-party insurance policies. The extension to cover injured workers is fully funded through a separate levy collected from workers compensation insurers and self-insurers. The financial operations of the LTCSS are reflected in the LTCS Fund which is a separate financial reporting entity.
The LTCS Act is administered by the Chief Minister, Treasury and Economic Development Directorate (CMTEDD). Under section 10 of the LTCS Act, the Minister must appoint a public servant as the LTCS Commissioner of the Australian Capital Territory (ACT). Ms Karen Doran, Executive Director of Economic and Financial, CMTEDD was appointed by the Minister as the LTCS Commissioner commencing 1 July 2014. Ms Doran was reappointed for a further 3 years commencing 13 May 2016.
The functions of the LTCS Commissioner are supported by the Financial Framework Management and Insurance Branch of Economic and Financial, within CMTEDD.
B.1.1 LTCS Commissioner Responsibilities
Under the provisions of the LTCS Act, some of the key responsibilities of the LTCS Commissioner are to:
- determine the LTCS levy amount;
- issue and monitor guidelines for the LTCSS;
- assess applications for eligibility for Scheme participation;
- assess reasonable and necessary treatment and care needs of participants; and
- pay assessed treatment and care needs.
B.1.2 Highlights
As 2016-17 was the third year of operation of the LTCSS, the key priorities during the financial year were to:
- complete implementation of guidelines and protocols for the extension of the LTCS coverage to catastrophic work injuries;
- administer the LTCSS in accordance with the requirements of the LTCS Act and Guidelines;
- continue to improve procedures for the efficient and effective delivery of the LTCSS, including implementation of the Intergovernmental Agreement (IGA) signed by the ACT Government in February 2015 with NSW, that enabled the NSW Lifetime Care and Support Authority (LTCSA) to provide co-ordinated lifetime care and support services on behalf of the LTCS Commissioner to participants in the ACT; and
- monitor how the Scheme is operating including whether it is meeting participant expectations.
Against these priorities, the LTCS Commissioner:
- commissioned and received the second LTCS participant feedback report on the administration and effectiveness of the Scheme services provided to participants, including recommendations on ways service delivery may be enhanced; and
- determined, having regard to independent actuarial advice, the LTCS levy for motor vehicles and the LTCS levy for work injuries in 2017-18.
B.1.3 Our Participants
Any person who is catastrophically injured in a motor vehicle accident in the ACT can apply to become a participant in the LTCSS, regardless of their role in the motor accident. An ACT private sector worker catastrophically injured at work on or after 1 July 2016 can now also apply.
An applicant must however meet certain injury criteria to be eligible (more information can be found at http://apps.treasury.act.gov.au/ltcss).
The LTCS Commissioner received two new applications in the 2016-17 financial year for participation in the Scheme, one of which has been subsequently accepted as an interim participant in August 2017. As at 30 June 2017 there are five participants who are receiving co-ordinated treatment and care benefits through the Scheme. Of the five participants accepted into the Scheme, four are lifetime participants into the LTCSS and one is an interim participant.
Applying to the Scheme
All participants commence as ‘interim participants’ for up to two years. During this time, the Scheme will pay for any reasonable and necessary treatment, rehabilitation and care related to the motor accident injury.
After two years, an interim participant may be eligible to become a ‘lifetime participant’. Children do not apply for lifetime eligibility until they are at least five years old.
Our Participant Profile
The LTCSS has quite a young age demographic with the average participant age at the time of injury just less than eighteen years of age. Of the five participants in the Scheme as at 30 June 2017, two were under ten years of age when their accident occurred.
The Scheme covers five types of catastrophic injuries – traumatic brain injury, spinal cord injury, amputations, burns and vision loss. Four participants (80 per cent) have suffered a traumatic brain injury.
Our Scheme participants under ten years of age were a passenger and a pedestrian in the accidents that caused their injuries. Of the two drivers injured, both were motorcycle riders.
Provided Treatment, Rehabilitation and Care
In 2016-17, the LTCS Commissioner spent a total of $472,447 on services for participants. As expected, given there were no new participants in the year, the majority of expenses for the existing participants related to rehabilitation and support care services. The largest expenditure category was rehabilitation services (25 per cent). The second largest expenditure type was support services at 23 per cent which comprise mainly case management fees and travel expenses for participants and service providers to access/provide treatment and medical review. Medical was the third largest expense category. Education and Vocational Support Services (11 per cent) and Hospital (11 per cent) were the fourth largest expense categories.
Participant Expenses 2016-17
In comparison, in 2015-16, the LTCS Commissioner spent a total of $423,000 on services for participants. Similar to the 2016-17 expenditure, the largest expenditure in 2015-16 related to rehabilitation and support services.
Accessing Services – How the Scheme Works with Participants
The LTCS Scheme provides reasonable and necessary treatment, rehabilitation and care as it is required throughout the person’s life and assists them to plan their rehabilitation and care services.
Participants are supported as needed by a LTCSS coordinator. The coordinator arranges for a case manager to help plan services required by the participant.
The case manager will work with the participant and their service providers to request approval for services. Services are organised as required and the participant and their families are closely involved in each of these requests. Usually payment of approved treatment and care needs is made by the LTCSS directly to the supplier of the services.
Eligibility for Lifetime Participation
Decisions about whether an interim participant is accepted as a lifetime participant are made before the end of the interim participation period. Around six months prior to the end of the interim participation period, a participant’s eligibility to remain in the Scheme is assessed to determine whether the person may have sufficiently recovered to the extent that they no longer meet the eligibility criteria after the two year period. If it is assessed that the injured person is likely to meet the eligibility criteria beyond two years, the person is accepted into the Scheme for life.
During 2016-17, three interim participants were assessed and accepted for lifetime participation in the LTCS Scheme. To date four interim participants have been assessed for lifetime participation and all have been accepted.
Accessing Services – Participants’ Perception of the Eligibility Process for Lifetime Participation
Feedback from participants obtained through a research survey in April 2017 of their experience with the assessment process of their lifetime application reported positive experiences with the process and continuity of Scheme services in the period leading up to the decision of their acceptance as lifetime participants in the Scheme:
‘It was all very well done. I felt very confident about the process.’
‘We never had to ask for anything while we were waiting, there was a sense of urgency to get certain things done but things were in place over the review period.
... I feel that if I need to ring for anything I could have ... It ran very well”[1]
B.1.4 Outlook
Strategic priorities in 2017-18 for the LTCSS include:
- developing/amending LTCS guidelines and determinations when required to streamline delivery of benefits to participants living overseas;
- collecting feedback from participants on their expectations and experience with the LTCSS;
- continuing to improve guidelines and procedures for the efficient and effective delivery of the LTCSS in consultation with our administration partners – the NSW Lifetime Care and Support Authority;
- developing a memorandum of understanding with the National Disability Insurance Agency for the exchange of information about LTCS treatment and care expenses of LTCS scheme participants; and
- undertaking investments in accordance with the Fund’s investment strategy.
B.2 Performance Analysis
The LTCSS’ 2016-17 performance indicators are included in the Budget Portfolio Statements for the LTCS Fund, and are reported as part of the LTCS Fund’s Statement of Performance.
The LTCS Fund achieved all its accountability targets in 2016-17, with the exception of its investment earning rate.
Explanation of Performance Indicators
a. Independent Actuarial Review to Advise on the Required Fund Contribution
The LTCS levies are crucial to the funding of the Scheme, with a levy applying to all CTP policies payable at the time of vehicle registration and from 1 July 2016, a levy applied to private sector workers’ compensation insurers. As required by the LTCS Act, the levies are set by the LTCS Commissioner based on independent actuarial advice. The level at which the levies are set in any given year is intended to secure sufficient funds to meet the costs of all estimated present and future liabilities of new participants of the LTCSS in that year. The LTCS Levies are for a financial year and are set in May/June before the commencement of a financial year on 1 July.
In accordance with section 83 of the LTCS Act, the LTCS Commissioner obtained before the beginning of the contribution period, a report from an independent actuary in relation to the amounts needed to be contributed to the LTCS fund for the contribution period.
Two actuarial reports for the 2017-18 contribution period were undertaken by Finity for the purposes of setting the 2017-18 LTCS Levy for motor vehicle injuries and the LTCS levy for work injuries. The final actuarial reports were received in March 2017.
b. Determine LTCS Levies
The LTCS Commissioner determined that the LTCS levy of $35 for a twelve-month CTP policy would be unchanged in 2017-18, for all vehicles except those that are subject to distance restrictions applicable as part of the ACT’s Concessional Vintage Vehicle Registration (CVVR) Scheme. A LTCS Levy of $7 for a twelve-month CTP policy has been determined for the CVVR Scheme. The Levy determination for the 2017-18 contribution period was notified on the Legislation Register on 2 June 2017 for motor vehicles.
The levy amounts for the private sector workers compensation insurers and self-insurers were notified on 2 June 2017.
The LTCS Commissioner has determined these LTCS levies based on the best available data. Further, as the Scheme will only be in its fourth year of operation for motor vehicle accidents and in its second year of operation for work accidents, a high degree of uncertainty still remains with respect to the number of participants and the costs of providing services. By the very nature of the injury type covered by the Scheme, the experience can be expected to be volatile from year to year. Noting that it will take many years of experience before more robust scheme data becomes available the LTCS Commissioner will continue to reassess yearly the levy amounts, on the basis of updated advice of an independent actuary.
c. Undertake an Annual Client Feedback Process
A survey of the LTCSS participants was conducted by Modd Research and Evaluation Pty Ltd in April 2017 with a final report received in June 2017. The purpose of the research was to gain feedback from the participants and/or their nominated persons (respondents) specifically to understand participant expectations of and experience with the two-year review process that determined lifetime eligibility in the LTCSS.
Overall the research reported that respondents had very positive experiences with the review process. Specifically, all participants interviewed felt supported by their case manager, treatment, rehabilitation and care team. Relationships and communication lines were well-established and participants reported they felt confident that they could ask questions at any time and receive timely answers. Respondents considered that flagging the lifetime participation review process approximately six months prior to the two-year review was an appropriate timing. Participants reported that there was a continuity of services and equipment throughout the review period.
Within this positive context, participants also suggested improvements. These centred on the need for more information about the review process (i.e. the decision process, including who was involved and the eligibility criteria) and on information for those deemed ineligible to remain in the Scheme. The suggested improvements give rise to some recommendations around confirmation of lodgement of an application; inclusion of information around the timeframe for the review; the decision process and the eligibility criteria.
As the majority of the findings relate to the coordination and management of the two year review process by the LTCSA, a copy of the research report and findings has been provided to the LTCSA and the findings discussed with them. Separately, the ACT will also consider ways to improve the communication of information about the two-year review process to ACT participants.
d. LTCS Guidelines Available – Include Workers
With the extension of the LTCS Scheme to include work injuries from 1 July 2017, the LTCS Guidelines have been amended to include workers. The guidelines also include new arrangements that govern how the required fund contribution determined for work injuries will be apportioned between insurers and self-insurers as a levy. The guidelines were effective from 1 July 2016.
e. Application Form – For Workers
An Application Form for work injuries was developed and incorporated into the LTCS guidelines with the extension of the LTCS Scheme to cover work injuries on 1 July 2016. To facilitate the smooth transition of new catastrophic work injury claims and rehabilitation handling and management from workers compensation insurers to LTCS Scheme, an agreed operation and communication protocol was also developed in close consultation with workers compensation insurers and self-insurers and the NSW Lifetime Care and Support Authority.
f. Difference Between the Investment Earning Rate and the Benchmark is ≥ 0
In 2016-17, the LTCS investment return has been less than the benchmark due to the current small size of the funds’ total investment relative to the size of each investment. This means there is currently a material impact on the fund’s annual returns from the transaction costs payable each time funds are invested. This is likely to persist for some years until the fund reaches a certain size and maturity relative to the size of the new investments being made in a given year. The indicator has been amended in 2017-18 as the unit funds that the LTCS fund invests in is a passive fund, (it largely matches the companies included in the market indices) and it is hence unlikely to exceed the benchmark return performance.
B.3 Scrutiny
During the reporting period the LTCSS did not participate in any Legislative Assembly Committee inquiries related to its activities. There were no Audit Office performance audit reports with recommendations in respect of the LTCSS, and no Ombudsman Reports.
B.4 Risk Management
The LTCSS is part of CMTEDD. As such, it is covered in CMTEDD’s risk management arrangements.
B.5 Internal Audit
The LTCSS is part of the CMTEDD Audit and Risk Committee. CMTEDD’s Annual Report section on the Internal Audit Committee applies to the LTCSS.
No internal audits of the LTCSS were undertaken during 2016-17.
B.6 Fraud Prevention
The LTCSS is part of CMTEDD. As such, it is covered in CMTEDD’s Fraud and Corruption Prevention Plan.
B.7 Workplace Health and Safety
The LTCSS is part of CMTEDD. CMTEDD’s Annual Report section on Workplace Health and Safety practices applies to the LTCSS.
B.8 Human Resource Management
The LTCSS is part of CMTEDD. CMTEDD’s Annual Report section on HR management applies to the LTCSS.
B.9 Ecologically Sustainable Development
The CMTEDD’s Annual Report section on Ecologically Sustainable Development applies to the LTCSS.
Section C Financial Management Reporting
C.3 Capital Works
The LTCS Commissioner did not undertake any Capital Works Projects in the 2016-17 financial year.
C.4 Asset Management
The LTCS Commissioner has no intangible assets.
C.5 Government Contracting
The LTCS Commissioner is party to the following agreements:
Name | Description and Reason for Contract | Cost $ (GST Exclusive) | Procurement Type | Contract Date |
|---|---|---|---|---|
Finity Consulting Pty Limited | Provide actuarial review and advice | $19,227 | Public Tender | May 2017 |
Footnotes
[1] Dr Sandra Rickards ACT LTCS Participant Feedback Research 2017 – Research Report.