EXPLANATORY STATEMENT
AGED CARE ACT 1997
SECTION 52-1
AGED CARE (FLEXIBLE CARE SUBSIDY – AMOUNT OF SUBSIDY IN RESPECT OF MULTI-PURPOSE SERVICES) DETERMINATION 2005 (NO. 2)
Subsection 52-1(1) of the Aged Care Act 1997 provides that the Minister may determine in writing the amount of the flexible care subsidy or determine a method which must be used to work out the amount of flexible care subsidy .
This determination specifies the method for working out the rate of flexible care subsidy payable to multi-purpose services (MPS) from 1 July 2005.
MPS are flexible care services in rural locations that deliver a number of different forms of aged care, health care and community care. MPS are not funded on the same basis as residential services under the Aged Care Act 1997. These services are funded on a ‘cashed-out’ basis, i.e. allocated places are deemed to be occupied for the purposes of funding.
The rate of flexible care subsidy that is payable is dependant on whether the place type allocated is the equivalent of high level residential care, low level residential care, or community care.
The amount of subsidy for each high care place is based on:
- a basic subsidy equivalent amount which is a proportion of Residential Classification Scale RCS3 (currently 98%) with a 1.75% loading for the conditional adjustment payment;
- a concessional resident equivalent amount – regional rates apply;
- a viability supplement equivalent amount which is based on a proportion (currently 96%) of the viability supplement payable for residential aged care;
- an adjusted subsidy reduction amount (where appropriate) which is based on a proportion (currently 98%) of the adjusted subsidy reduction for residential care.
The amount of subsidy for each low care place is based on:
- a basic subsidy equivalent amount which is a proportion of Residential Classification Scale RCS7 (currently 94%) with a 1.75% loading for the conditional adjustment payment;
- a concessional resident equivalent amount – regional rates apply;
- a viability supplement equivalent amount which is based on a proportion (currently 96%) of the viability supplement payable for residential aged care.
The amount of subsidy for each community care place is based on a proportion of the Community Care subsidy (currently 94%).
All residential care subsidy rates are indexed on 1 July each year. The rate of flexible care subsidy for MPS has been indexed in line with residential cares subsidy rates. The index incorporates movements in wage costs and non-wage costs. The wage costs index is based on the Safety Net Adjustment determined by the Australian Industrial Relations Commission as a proportion of Average Weekly Ordinary Time Earnings. 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 rate of subsidy uses a well-established formula for indexation, no specific consultation with industry was undertaken with respect to this instrument.
The Office of Regulation Review has advised that no Regulation Impact Statement is required (ORR ID Number 7362).
This Determination is a “legislative instrument” for the purposes of the Legislative Instruments Act 2003.