EXPLANATORY STATEMENT
AGED CARE ACT 1997
SUBSECTION 48-1(3)
Determination of the amount of Community Care Subsidy
(ACA Ch. 3 No. 16/2007)
Subsection 48-1(3) of the Aged Care Act 1997 (the Act) provides that the amount of community care subsidy that is payable to an approved provider in respect of a day is the amount:
(a) determined by the Minister in writing; or
(b) worked out in accordance with a method determined by the Minister in writing.
In accordance with paragraph 48-1(3)(b) of the Act, the Determination of the amount of Community Care Subsidy under subsection 48-1(3) (ACA Ch. 3 No. 1/2007) (the Determination) specifies the method for working out the amount of community care subsidy payable under section 47-1 of the Act for a day in respect of a community care recipient.
The Determination applies from 1 July 2007 and, from that date, revokes the Determination made under section 48-1 (ACA Ch. 3 No. 9/2006), which was made on 28 June 2006.
This basic daily amount of community care subsidy that is payable in respect of a community care recipient is $33.97. This amount is specified in Step 2 of the Determination.
Step 1 of the Determination provides for an additional daily amount of community care subsidy to be paid to an approved provider of community care who provides community care to a care recipient who resides in rural and remote locations, provided that location has an Accessibility / Remoteness Index of Australia (ARIA) score of 3.52 or more.
Under the ARIA, each suburb and town in Australia is allocated an ARIA score based on its accessibility and remoteness. ARIA scores for all Australian locations are contained in the document entitled Viability Funding — ARIA scores for locations as at 30 July 1999, published by the Commonwealth Department of Health and Ageing. The Department will verify the location of a care recipient by reference to the postcode of the suburb or town in which the care recipient resides.
The more remote the community care recipient’s residential location, the higher the ARIA score for that location and the higher the amount of additional community care subsidy payable to the approved provider in respect of that care recipient. This approach reflects the higher costs involved in operating community care aged services in rural and remote areas, including the higher costs associated with attracting and retaining staff.
If the ARIA score for a community care recipient’s residential location is less than 3.52 no additional daily amount of community care subsidy is payable in respect of the care recipient and the amount of community care subsidy payable in respect of the care recipient is $33.97 (as specified in Step 2 of the Determination).
However, where the ARIA score for a community care recipient’s residential location is 3.52 or more, the table in Step 1 of the Determination sets out the additional daily amount that is payable in respect of that care recipient. The additional daily amount set out in the table in Step 1 is added to the basic daily amount of community care subsidy, which Step 2 of the Determination specifies is $33.97.
Approved providers who are eligible to receive an additional amount of community care subsidy in respect of a community care recipient will receive the additional amount of subsidy through Medicare Australia’s payment systems.
The amount of community care subsidy is indexed on 1 July each year.
All residential care subsidy rates are indexed on 1 July each year. The index incorporates movements in wage costs and non-wage costs. The wage costs component is calculated using the annualised dollar figure of the October 2006 Federal Minimum Wage decision of the Australian Fair Pay Commission expressed as a proportion of the (latest available) Average Weekly Ordinary Time Earnings at the time of the AFPC decision. The non-wage costs index is based on the Consumer Price Index exclusive of the impact of A New Tax System consistent with a whole of government decision.
Consultation
As the indexation of this supplement used an established formula for indexation, no specific consultation with industry was undertaken with respect to making this new determination.
Overview
The Aged Care Act 1997, enacted by the Australian Parliament, aims to provide a framework for the delivery of aged care services in Australia. The Act addresses the need for a structured and funded system to support the elderly and those with care needs. A specific issue it addresses is the equitable distribution of subsidies for community care services, ensuring that care providers receive adequate compensation, particularly in rural and remote areas where operating costs are higher. The explanatory statement for the Determination of the amount of Community Care Subsidy, issued under the Act, details the method for calculating the subsidy payable to approved providers, which is indexed annually to account for changes in wage and non-wage costs. Effective from 1 July 2007, this Determination revokes the previous one, establishing a new basic daily subsidy amount of $33.97, with additional amounts for care recipients in more remote areas based on their ARIA score, reflecting the higher costs associated with providing care in these locations.
Scope and Application
The Aged Care Act 1997, through the Determination of the amount of Community Care Subsidy, governs the calculation of the daily subsidy payable to approved providers of community care for recipients under the community care program. This Act applies to approved providers who deliver community care services to individuals, which can include a range of services from in-home support to day centre programs, and to community care recipients who are eligible for these services. The Act operates nationally across Australia, as it is a Commonwealth Act, thereby applying to all states and territories. The basic daily community care subsidy amount is $33.97, but this amount can be supplemented based on the Accessibility/Remoteness Index of Australia (ARIA) score of the recipient’s residential location, which reflects the additional costs of providing care in more remote areas. An additional subsidy is payable for recipients residing in areas with an ARIA score of 3.52 or higher, with the amount varying according to the degree of remoteness. The Determination, which came into effect from 1 July 2007, revokes previous subsidy determinations and is subject to annual indexation based on wage and non-wage cost movements.
Key Provisions
Subsection 48-1(3) of the Aged Care Act 1997 sets out the method by which the amount of community care subsidy payable to an approved provider for a given day is calculated. The amount can either be determined directly by the Minister in writing, or calculated according to a method determined by the Minister, as specified in the Determination of the amount of Community Care Subsidy under subsection 48-1(3) (ACA Ch. 3 No. 1/2007). This Determination applies from 1 July 2007, replacing the previous Determination made under section 48-1 (ACA Ch. 3 No. 9/2006), which was in effect until that date. The basic daily amount of community care subsidy specified in Step 2 of the Determination is $33.97. However, if the care recipient resides in a location with an Accessibility / Remoteness Index of Australia (ARIA) score of 3.52 or more, an additional daily amount may be payable, reflecting the higher costs associated with providing care in rural and remote areas.
The Act imposes specific obligations on approved providers to ensure they are eligible to receive community care subsidy payments. These obligations include verifying the location of the care recipient by reference to the postcode of the suburb or town in which the care recipient resides, to determine if they qualify for the additional subsidy based on the ARIA score. Approved providers must also ensure that the subsidy amount is calculated correctly, either directly as determined by the Minister or according to the method specified in the Determination. Failure to comply with these requirements could result in the provider not being eligible for the subsidy or in the incorrect amount being paid.
Breaches of the provisions outlined in the Aged Care Act 1997 can result in various civil or criminal consequences, depending on the nature and severity of the breach. The Act does not specify particular offences or penalties for failing to comply with the community care subsidy provisions. However, general provisions within the Act may apply, which could include fines or other penalties as determined by the court. The maximum penalties would be in line with those prescribed elsewhere in the Act for similar breaches, which can include substantial fines for both individuals and corporations, depending on the seriousness of the breach and any aggravating factors present.
In summary, the Aged Care Act 1997, through subsection 48-1(3), provides a clear framework for calculating the community care subsidy payable to approved providers. This includes a basic daily amount of $33.97 and potentially an additional amount for care recipients in more remote locations. Approved providers must adhere to the obligations set out in the Act to ensure they are eligible for and correctly calculate their subsidy payments. While the Act does not specify particular penalties for breaches of these provisions, general penalties applicable to other breaches within the Act may be imposed, including fines and other sanctions.