EXPLANATORY STATEMENT
AGED CARE ACT 1997 SUBSECTION 48-1(3)
DETERMINATION OF THE AMOUNT OF COMMUNITY CARE SUBSIDY UNDER SUBSECTION 48-1(3)
(ACA Ch. 3 No. 18/2008)
COMMUNITY CARE SUBSIDY
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. 18/2008) (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 2008 and, from that date, revokes the Determination of the amount of Community Care Subsidy under subsection 48-1(3) (ACA Ch. 3 No. 16/2007).
This basic daily amount of community care subsidy that is payable in respect of a community care recipient is $34.75. 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 $34.75 (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 $34.75.
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.
Consultation
Many aged care subsidy rates are indexed on 1 July each year. The index for this subsidy 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.
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 Determination of the amount of Community Care Subsidy under subsection 48-1(3) (ACA Ch. 3 No. 18/2008) is an instrument made under the Aged Care Act 1997. Enacted by the Australian Parliament, the Act aims to provide accessible, affordable, and quality aged care services to the elderly population in Australia. This particular determination was introduced to address the need for a structured method to calculate the amount of community care subsidy payable to approved providers, ensuring consistency and fairness in subsidy payments. It specifies a basic daily amount of $34.75 for community care subsidy and an additional amount for care recipients in rural and remote areas, based on the Accessibility/Remoteness Index of Australia (ARIA) scores. This approach acknowledges the higher operational costs in these areas and is intended to support approved providers in delivering care in less accessible regions. The determination applies from 1 July 2008 and replaces the previous method outlined in the Determination of the amount of Community Care Subsidy under subsection 48-1(3) (ACA Ch. 3 No. 16/2007).
Scope and Application
The Aged Care Act 1997, as amended by the Determination of the amount of Community Care Subsidy under subsection 48-1(3) (ACA Ch. 3 No. 18/2008), applies to approved providers of community care who are eligible to receive a community care subsidy for services rendered to care recipients under the Act. The Determination outlines the methodology for calculating the amount of community care subsidy payable for a day concerning a community care recipient, with a basic daily amount set at $34.75. This determination applies nationally across Australia and is effective from 1 July 2008, replacing the previous determination (ACA Ch. 3 No. 16/2007). Additionally, the Determination provides for an increased subsidy for care recipients residing in rural and remote locations, as determined by their Accessibility/Remoteness Index of Australia (ARIA) score, with higher scores correlating to higher subsidy amounts to reflect the increased operational costs in such areas. The ARIA scores are verified using the care recipient’s residential postcode, and the additional subsidy is paid through Medicare Australia’s payment systems. The indexation of this subsidy, which incorporates movements in wage costs and non-wage costs, follows a pre-established formula and thus did not require specific consultation with industry.
Key Provisions
Subsection 48-1(3) of the Aged Care Act 1997 (the Act) mandates the method by which the amount of community care subsidy payable to an approved provider for a day is determined. This amount can either be directly determined by the Minister in writing or calculated using a method prescribed by the Minister in writing (subsection 48-1(3)(a) and (b)). The Determination of the amount of Community Care Subsidy under subsection 48-1(3) (ACA Ch. 3 No. 18/2008) specifies the method for calculating the subsidy payable under section 47-1 of the Act for a day in respect of a community care recipient, which took effect from 1 July 2008. This Determination replaced the previous Determination of the amount of Community Care Subsidy under subsection 48-1(3) (ACA Ch. 3 No. 16/2007).
Under the Determination, the basic daily amount of community care subsidy payable for a community care recipient is set at $34.75, as detailed in Step 2. Step 1 outlines an additional daily amount payable to an approved provider for a care recipient residing in rural and remote locations, defined by an Accessibility/Remoteness Index of Australia (ARIA) score of 3.52 or higher. The ARIA score, which is allocated to each suburb and town in Australia based on accessibility and remoteness, is used to determine the additional subsidy amount. The more remote the location, the higher the ARIA score, and consequently, the higher the additional subsidy amount payable to the provider. This additional amount reflects the higher costs associated with providing community care in rural and remote areas, including staffing challenges.
The Act imposes several obligations and requirements on the parties it governs. Approved providers must ensure they meet the criteria for eligibility to receive the additional community care subsidy, which includes verifying the care recipient’s residential location through the ARIA score. The Department of Health and Ageing will verify the care recipient’s location based on the postcode of the suburb or town of residence. Providers must also ensure they adhere to the method specified in the Determination for calculating the subsidy amount, which involves adding any additional subsidy determined under Step 1 to the basic daily amount of $34.75.
Breach of the requirements outlined in the Act can lead to various consequences. While the specific offences and penalties are not detailed in the text, it is implied that non-compliance with the prescribed methods for determining the community care subsidy could result in legal repercussions. These may include financial penalties or legal actions taken against the provider for failing to accurately calculate and claim the subsidy. The exact penalties are not specified in the provided text, but they typically reflect the severity and intent of the breach.