Aged Care (Amount of flexible care subsidy - multi-purpose services) Determination 2007 (No. 1) (ACA Ch. 3 No. 4/2007)

Administered by Department of Health, Disability and Ageing

Legislation au F2007L00652 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

AGED CARE ACT 1997

 

SUBSECTION 52-1(1)

 

AGED CARE (AMOUNT OF FLEXIBLE CARE SUBSIDY – MULTI-PURPOSE SERVICES) DETERMINATION 2007 (NO. 1) (ACA Ch.3  No. 4/2007)

 

 

 

Subsection 52-1(1) of the Aged Care Act 1997 (the Act) provides that the Minister for Ageing may determine, in writing, the amount of the flexible care subsidy or a method that must be used to work out the amount of flexible care subsidy. 

 

In accordance with paragraph 52-1(1)(b) of the Act, the Aged Care (Amount of flexible care subsidy – multi-purpose services) Determination 2007 (No 1) (ACA Ch. 3 No. 4/2007) (the Determination) specifies the method for working out the amount of flexible care subsidy payable to a multi-purpose service (MPS) under section 51-1 of the Act.

 

The Determination applies from 1 January 2007 and, from that date, revokes the Aged Care (Amount of flexible care subsidy – multi-purpose services) Determination 2006 (No 1) (ACA Ch. 3 No. 16/2006).  The Determination replaces, but makes only one substantial amendment to, ACA Ch.3 No. 16/2006.  The amendment is the inclusion of new section 13 in the Determination.

 

An MPS is a flexible care service in rural locations that delivers a number of different forms of aged care, health care and community care.  An MPS is not funded on the same basis as a residential service under the Act .  An MPS is funded on a ‘cashed-out’ basis, that is, allocated places are deemed to be occupied for the purposes of funding.

 

The Determination provides for the total amount of flexible care subsidy payable for an MPS for a day.  This total amount comprises the amount payable for a day in respect of the MPS’s high, low and community care places, and the respite supplement equivalent amount.

 

The amount of subsidy payable to an MPS for high care places is based on:

 

  • a basic subsidy equivalent amount, which is a proportion of Residential Classification Scale RCS3 (currently 98 percent) with a 5.25 percent loading for the CAP;
  • a concessional resident equivalent amount (regional rates apply);
  • a viability supplement equivalent amount, which is based on a proportion (currently 96 percent) of the viability supplement payable for residential aged care; and
  • an adjusted subsidy reduction amount (where appropriate), which is based on a proportion (currently 98 percent) of the adjusted subsidy reduction for residential care.

 

The amount of subsidy payable to MPS for low care places is based on:

 

  • a basic subsidy equivalent amount, which is a proportion of Residential Classification Scale RCS7 (currently 94 percent) with a 5.25 percent loading for the CAP;
  • a concessional resident equivalent amount (regional rates apply); and
  • a viability supplement equivalent amount, which is based on a proportion (currently 96 percent) of the viability supplement payable for residential aged care.

 

The amount of subsidy payable to MPS in respect of community care places is based on a proportion of the Community Care subsidy (currently 94 percent). 

 

Section 13 of the Determination is a new provision. Under the Accessibility/Remoteness Index of Australia (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.

 

Section 13 provides for an additional daily amount of community care subsidy to be paid in respect of each community care place allocated to an MPS under the Act if the MPS is in a rural or remote location that has an ARIA score of more than 3.51.  The Department will verify the location of an MPS by reference to the postcode of the suburb or town in which the MPS is located.  Subsection 7(2) of the Determination provides that a moderately accessible location, a remote location and a very remote location (as those terms are defined in the Determination) all have an ARIA score of more than 3.51. 

 

The additional amount of community care subsidy, if any, payable to an MPS for a day in respect of a community care place is set out in the table in section 13 of the Determination.  The more remote the MPS’s location, the higher the MPS’s ARIA score and the higher the additional amount of community care subsidy payable to the MPS.  This approach reflects the higher costs involved in operating an MPS in rural and remote areas, including the higher costs associated with attracting and retaining staff.  If the ARIA score for an MPS that provides community care is less than 3.52 no additional daily amount of community care subsidy is payable in respect of the MPS.

 

The Australian Government’s 2005-2006 Budget allocated $9.3 million over four years for an additional respite supplement for MPS that provide respite services for older Australians and their carers living in rural and remote areas.  The respite supplement equivalent amount payable in respect of MPS for a day, is determined in accordance with a sliding scale of payments set out in section 12 of the Determination for the total number of high and low care places allocated to the MPS.  

 

The Determination does not contain a Schedule 1.

 

The Determination is a “legislative instrument” for the purposes of the Legislative Instruments Act 2003.  As the Determination provides a new and additional amount of community care subsidy to providers of community care in rural and remote areas, it does not adversely affect the rights of, or impose liabilities on, any person.  As such, the Determination does not contravene the rule against retrospectivity in subsection 12(2) of the Legislative Instruments Act 2003.

 

Consultation

 

In relation to the additional amount of community care subsidy payable to providers in rural and remote areas, an external reference group was established consisting of representatives from five peak body organisations that deliver rural and remote aged care programs.  Consultation with this reference group was integral to the development of the eligibility criteria for the payment of the additional amount of community care subsidy and the additional amounts payable. 

 

No other consultation with industry was undertaken in relation to the remainder of the Determination because the remainder of the Determination is substantially the same as determination ACA Ch. 3 No. 16/2006, which is replaced by the Determination.

 

 

Overview

The Aged Care (Amount of Flexible Care Subsidy – Multi-Purpose Services) Determination 2007 (No. 1) (ACA Ch. 3 No. 4/2007) was enacted under the Aged Care Act 1997 to address the specific funding needs of multi-purpose services (MPS) in rural and remote areas, ensuring that these services receive an appropriate level of subsidy to account for higher operational costs. This legislative instrument was developed to align with the policy objective of providing targeted support to aged care providers in less accessible regions, thereby improving the accessibility and quality of aged care services in these areas. The Determination was enacted by the Minister for Ageing and outlines the method for calculating the flexible care subsidy payable to MPS, including adjustments for remoteness and viability supplements to reflect the higher costs associated with operating in rural and remote locations. This legislative instrument does not impose new liabilities or adversely affect existing rights, thereby adhering to the principles outlined in the Legislative Instruments Act 2003.

Scope and Application

The Aged Care (Amount of flexible care subsidy – multi-purpose services) Determination 2007 (No 1) applies to multi-purpose services (MPS) which are flexible care services located in rural areas that deliver various forms of aged care, health care, and community care. The Determination specifies the method for calculating the amount of flexible care subsidy payable to an MPS under the Aged Care Act 1997, and it applies from 1 January 2007, replacing the Aged Care (Amount of flexible care subsidy – multi-purpose services) Determination 2006 (No 1). Notably, the Determination includes a new provision for an additional daily amount of community care subsidy to be paid to MPS in rural or remote locations with an Accessibility/Remoteness Index of Australia (ARIA) score of more than 3.51. This approach aims to reflect the higher costs associated with operating an MPS in remote areas, including staff recruitment and retention. The Determination does not contain a Schedule 1 and is considered a "legislative instrument" under the Legislative Instruments Act 2003. It does not adversely affect any person's rights or impose liabilities, thereby complying with the rule against retrospectivity.

Key Provisions

The Aged Care (Amount of flexible care subsidy – multi-purpose services) Determination 2007 (No 1) (the Determination) specifies the method for calculating the flexible care subsidy payable to multi-purpose services (MPS) under section 51-1 of the Aged Care Act 1997 (the Act) (subsection 52-1(1)(b)). It applies from 1 January 2007 and revokes the Aged Care (Amount of flexible care subsidy – multi-purpose services) Determination 2006 (No 1) (ACA Ch. 3 No. 16/2006) (subsection 4). The Determination includes a new section 13 which provides an additional daily amount of community care subsidy to be paid for each community care place allocated to an MPS in a rural or remote location with an Accessibility/Remoteness Index of Australia (ARIA) score of more than 3.51. The additional amount payable is based on the MPS’s ARIA score, reflecting the higher costs involved in operating an MPS in rural and remote areas. The Determination imposes obligations on providers of MPS to accurately calculate the amount of flexible care subsidy payable for their services based on the criteria outlined in the Determination. This includes correctly identifying the type of care provided (high, low, or community care) and the location of the service in relation to the ARIA score. Providers must also ensure that they are eligible for the additional community care subsidy payable under section 13 if their service is located in a rural or remote area. Additionally, the Australian Government has allocated funds for an additional respite supplement for MPS providing respite services in rural and remote areas, which is determined according to a sliding scale of payments set out in section 12 of the Determination. Failure to comply with the Determination could lead to incorrect subsidy payments, which may result in financial discrepancies and potential audits by the relevant authorities. While the Determination does not explicitly outline specific offences, penalties, or civil/criminal consequences for non-compliance, it is likely that any inaccuracies in subsidy calculations could lead to financial penalties, repayment of incorrectly received subsidies, or other corrective actions as determined by the Minister for Ageing. The Act and associated regulations provide the framework within which such consequences would be applied. The Determination aims to ensure that MPS, particularly those in rural and remote areas, receive adequate funding to cover the higher operational costs associated with their locations. By providing a detailed method for calculating the flexible care subsidy and an additional community care subsidy for remote areas, the Determination seeks to support the provision of quality aged care services across Australia, particularly in areas that are traditionally underserved.

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