EXPLANATORY STATEMENT
AGED CARE ACT 1997
SUBSECTION 52-1(1)
AGED CARE (AMOUNT OF FLEXIBLE CARE SUBSIDY – MULTI-PURPOSE SERVICES) DETERMINATION 2007 (NO. 2) (ACA Ch. 3 No. 23/2007)
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 in respect of a day, 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. 2) (ACA Ch. 3 No. 23/2007) (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.
This Determination applies from 24 August 2007 and, from that date, revokes the Aged Care (Amount of flexible care subsidy – multi-purpose services) Determination 2007 (No. 1) (ACA Ch. 3 No. 21/2007).
The Determination has been changed to include a Concessional Resident Equivalent (CRE) amount of $16.66 for the East Arnhem Land area. A new MPS has been established in this region.
The Determination is backdated to the date of agreement between the Commonwealth and the Northern Territory Government over the new service in the East Arhem region, 24 August 2007. The Northern Territory Government began providing MPS on 1 July 2007. No person is adversely affected by the retrospectivity of the Determination as the only change is the addition of a CRE rate for East Arnhem Land.
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 and community 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, residential and community viability supplements, the CRE amount 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 per cent) with a 7 per cent loading for the Conditional Adjustment Payment (CAP);
- a concessional resident equivalent amount (regional rates apply);
- a viability supplement equivalent amount, which is based on a proportion (currently 96 per cent) 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 per cent) of the adjusted subsidy reduction for a residential care place.
The amount of subsidy payable to an MPS for low care places is based on:
- a basic subsidy equivalent amount, which is a proportion of Residential Classification Scale RCS7 (currently 94 per cent) with a 7 per cent 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 per cent) of the viability supplement payable for residential aged care.
The amount of subsidy payable to an MPS in respect of community care places is based on a proportion of the Community Care subsidy (currently 94 per cent).
Section 13 of the Determination was introduced in January 2007. 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 of the Determination 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 its 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 2005-06 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. The Determination does not contravene the rule against retrospectivity in subsection 12(2) of the Legislative Instruments Act 2003.
Consultation
In the development of the new MPS extensive consultation has been undertaken with members of the Gove community and the Northern Territory Government representatives.
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