EXPLANATORY STATEMENT
Issued under the authority of the Minister for Mental Health and Ageing
Aged Care Act 1997
Aged Care (Amount of Flexible Care Subsidy – Extended Aged Care at Home) Determination 2011 (No. 1)
The Aged Care Act 1997 (the Act) provides for the regulation and funding of aged care services. Persons who are approved under the Act to provide flexible aged care services can be eligible to receive flexible care subsidy payments in respect of the care they provide to approved care recipients.
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 Act provides that the amount of flexible care subsidy that is payable in respect of a day is the amount determined by the Minister by legislative instrument or worked out in accordance with a method determined by the Minister by legislative instrument.
The purpose of the Aged Care (Amount of Flexible Care Subsidy – Extended Aged Care at Home) Determination 2011 (No. 1) ‘the Determination’ is to specify the method for working out the amount of flexible care subsidy for a day in respect of an EACH care recipient, with rates effective from 1 July 2011. This Determination also revokes the Aged Care (Amount of Flexible Care Subsidy – Extended Aged Care at Home) Determination 2010 (No. 1).
The difference between the Determinations is that the daily amount of flexible care subsidy payable for an EACH care recipient has been indexed in accordance with the standard indexation arrangements.
The total amount of flexible care subsidy payable in respect of an EACH care recipient is the sum of following four amounts as set out in the Determination:
the base amount of flexible care subsidy payable for a day for a care recipient receiving flexible care in the form of EACH
an amount equal to any oxygen supplement that would have been payable in respect of the EACH care recipient if he or she was receiving residential care
an amount equal to any enteral feeding supplement that would have been payable in respect of the EACH care recipient if he or she was receiving residential care
an additional amount if the care recipient lives in a rural or 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 Department of Health and Ageing.
Consultation
Indexation of the subsidy uses a well established formula based on the Consumer Price Index as a measure of the movements in the non-labour costs of providers and the decisions of Fair Work Australia as a measure of non-productivity based movements in the wage costs of providers. As this is in accordance with policy upon which extensive consultation was undertaken, no specific consultation was undertaken with respect to this indexation.
Information about the increase in the amount of the subsidy will be disseminated via electronic media to approved providers.
This Determination commences on 1 July 2011.
The Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Overview
The Aged Care (Amount of Flexible Care Subsidy – Extended Aged Care at Home) Determination 2011 (No. 1) was enacted to address the need for regular updates to the flexible care subsidy rates for Extended Aged Care at Home (EACH) services, ensuring that the subsidy remains aligned with the costs of providing such services. This Determination was issued under the authority of the Minister for Mental Health and Ageing and is effective from 1 July 2011. The Aged Care Act 1997, which governs the regulation and funding of aged care services, mandates that the Minister determine the amount of flexible care subsidy through legislative instruments. The primary policy objective of this Determination is to specify the method for calculating the flexible care subsidy for EACH care recipients, including indexing these rates in line with the Consumer Price Index and Fair Work Australia decisions, and to ensure that care recipients in rural and remote areas receive an additional subsidy based on their Accessibility/Remoteness Index of Australia (ARIA) score.
Scope and Application
The Aged Care (Amount of Flexible Care Subsidy – Extended Aged Care at Home) Determination 2011 (No. 1) applies to persons and entities that are approved under the Aged Care Act 1997 to provide flexible aged care services, specifically the Extended Aged Care at Home (EACH) program, which delivers nursing and personal care to aged care recipients in their own homes. The Determination specifies the method for calculating the amount of flexible care subsidy payable for a day to an EACH care recipient, with the rates effective from 1 July 2011. This includes a base amount, additional supplements for oxygen and enteral feeding, and an extra amount for care recipients living in rural or remote areas, as defined by an Accessibility/Remoteness Index of Australia (ARIA) score of 3.52 or more. The Determination revokes the previous 2010 version and incorporates standard indexation arrangements based on the Consumer Price Index and Fair Work Australia decisions. The Determination operates under the Aged Care Act 1997, which applies Commonwealth-wide, regulating and funding aged care services across Australia. The Determination is a legislative instrument under the Legislative Instruments Act 2003, and it extends or restricts application through subordinate instruments as required.
Key Provisions
The Aged Care (Amount of Flexible Care Subsidy – Extended Aged Care at Home) Determination 2011 (No. 1) establishes the method for calculating the flexible care subsidy for recipients of Extended Aged Care at Home (EACH) services, effective from 1 July 2011 (subsection 2). The determination sets out the total amount of subsidy payable as the sum of four components: the base amount, any oxygen supplement that would have been payable if the recipient was in residential care, any enteral feeding supplement that would have been payable if the recipient was in residential care, and an additional amount for recipients living in rural or remote areas with an Accessibility/Remoteness Index of Australia (ARIA) score of 3.52 or more (subsection 3). This determination replaces the 2010 version, which has been revoked.
The Determination imposes specific obligations on the parties involved. Approved providers of flexible aged care services are required to comply with the method outlined in the Determination when calculating their subsidy payments. This includes ensuring that they accurately account for each of the four components specified in the Determination when submitting claims for subsidy payments (subsection 3). The obligation to index the subsidy amount according to the Consumer Price Index and decisions of Fair Work Australia also falls on the Minister, who must ensure the subsidy rates are updated in accordance with these measures.
Breach of the provisions set out in the Determination could result in civil or criminal consequences. Providers who fail to accurately calculate and claim their subsidy payments in accordance with the Determination may be subject to financial penalties or recoupment of payments. While the Determination does not specify maximum penalties, such breaches could lead to investigations by the Department of Health and potential legal action if the breaches are deemed to be significant or repeated. The obligation to index the subsidy in accordance with the specified measures is a requirement on the Minister, and failure to do so could be subject to review or challenge in a court or tribunal.
In summary, the Aged Care (Amount of Flexible Care Subsidy – Extended Aged Care at Home) Determination 2011 (No. 1) sets out a method for calculating the flexible care subsidy for EACH recipients, effective from 1 July 2011. The Determination imposes obligations on approved providers to accurately calculate their subsidy payments in accordance with the method specified, and on the Minister to index the subsidy rates in accordance with the Consumer Price Index and Fair Work Australia decisions. Failure to comply with the Determination could result in financial penalties or other consequences for providers.