EXPLANATORY STATEMENT
AGED CARE ACT 1997 SUBSECTION 52-1(1)
DETERMINATION UNDER SUBSECTION 52-1(1) OF THE AMOUNT OF FLEXIBLE CARE SUBSIDY FOR FLEXIBLE CARE PROVIDED IN THE FORM OF EXTENDED AGED CARE AT HOME
(ACA Ch. 3 No. 19/2008)
Flexible Care Subsidy for flexible care provided in the form of
EXTENDED AGED CARE AT HOME (EACH)
Extended Aged Care at Home (EACH) is a flexible care program in respect of which flexible care subsidy is payable. EACH provides nursing and personal care services to an aged care recipient in the care recipient’s home where the care recipient would otherwise be eligible for high level residential care.
Subsection 52-1(1) of the Aged Care Act 1997 (the Act) provides that the amount of flexible care subsidy that is payable 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 52-1(1)(b) of the Act, the Determination under subsection 52-1(1) of the amount of flexible care subsidy for flexible care provided in the form of Extended Aged Care at Home (ACA Ch. 3 No. 19/2008) (the Determination) specifies the method for working out the amount of flexible care subsidy payable under section 51-1 of the Act for a day in respect of an EACH care recipient.
The Determination applies from 1 July 2008 and, from that date, revokes the Determination under section 52-1 of the amount of flexible care subsidy for flexible care provided in the form of Extended Aged Care at Home (ACA Ch. 3 No. 17/2007).
Steps 1 to 3 of the Determination require an EACH care recipient to be treated as if he or she were a residential care recipient for the purposes of working out the base amount of flexible care subsidy payable for a day in respect of the EACH care recipient.
Step 1 of the Determination states that the base amount of flexible care subsidy payable for a day in respect of an EACH care recipient is an amount equal to the amount of residential care subsidy payable for a care recipient who is classified at the Category 2 Level in the Resident Classification Scale (classification level RCS 2), assuming that the residential care is not respite care.
Steps 2 and 3 of the Determination provide that if the oxygen supplement payable under section 44-13 and/or the enteral feeding supplement payable under section 44-14 would have been payable in respect of the EACH care recipient if he or she was receiving residential care, an amount equivalent to each applicable supplement is added to the amount calculated under Step 1.
This method of working out the base amount of flexible care subsidy payable for a day in respect of an EACH care recipient has been in place since EACH was established as a flexible care program.
Step 4 provides for an additional daily amount of flexible care subsidy to be paid to an approved provider who provides EACH to a care recipient who resides in a rural and remote location 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 EACH care recipient’s residential location, the higher the ARIA score for that location and the higher the amount of the additional flexible care subsidy payable to the approved provider in respect of that care recipient. This approach reflects the higher costs involved in operating EACH care services in rural and remote areas, including the higher costs associated with attracting and retaining staff.
If the ARIA score for an EACH care recipient’s residential location is less than 3.52 no additional daily amount of flexible care subsidy is payable in respect of the EACH care recipient. However, where the ARIA score for an EACH care recipient’s residential location is 3.52 or more, the table in Step 4 of the Determination sets out the additional daily amount that is payable in respect of that care recipient.
Approved providers who are eligible to receive an additional amount of flexible care subsidy in respect of an EACH care recipient will receive the additional amount of subsidy through Medicare Australia’s payment systems.
The amount of flexible care subsidy payable in respect of EACH is indexed on 1 July each year. As part of this process, the additional amount of flexible care subsidy payable in respect of an EACH care recipient has also been indexed.
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.