EXPLANATORY STATEMENT
AGED CARE ACT 1997 SUBSECTION 52-1(1)
AGED CARE (AMOUNT OF FLEXIBLE CARE SUBSIDY – MULTI-PURPOSE SERVICES) DETERMINATION 2008
(ACA Ch. 3 No. 21/2008)
FLEXIBLE CARE SUBSIDY – MULTI-PURPOSE SERVICES
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 2008 (ACA Ch. 3 No. 21/2008) (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 July 2008 and, from that date, revokes the Aged Care (Amount of flexible care subsidy – multi-purpose services) Determination 2007 (No. 2) (ACA Ch. 3 No. 23/2007).
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 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 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 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 MPS in respect of community care places is based on a proportion of the Community Care subsidy (currently 94 per cent).
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 Accessibility/Remoteness Index of Australia (ARIA) score of more than 3.51. The Department of Health and Ageing 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.
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.
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.
Consultation
Many aged care subsidy rates are indexed on 1 July each year. The index 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.
ATTACHMENT
NOTES ON CLAUSES
Part 1 – Preliminary
Clause 1 provides that the title of the determination is the Aged Care (Amount of flexible care subsidy – multi-purpose services) Determination 2008. It is also known as ACA Ch. 3 No. 21/2008.
Clause 2 provides that the determination will commence on 1 July 2008.
Clause 3 revokes the previous determination Aged Care (Amount of flexible care subsidy – multi-purpose services) Determination 2007 (No. 2) (ACA Ch. 3 No. 23/2007).
Clause 4 makes clear that this determination applies only to flexible care services that are multi-purpose services.
Clause 5 defines certain types of services and categories of service, types of care places, a type of locality classification, and a payment rate.
Clauses 6, 7 and 8 set out the criteria for Category A, B and C services. These criteria relate to location and the volume of beds or places. Whether or not a multi-purpose service meets the prescribed requirements is based on a points system.
The criteria for a Category A service includes criteria in respect of the inability of the multi-purpose service to co-locate with another service, and the types of residents (i.e. whether they are supported, concessional or assisted residents).
The criteria for a Category B or C service include a criterion in respect of the volume of special needs care recipients
Clauses 6, 7 and 8 each defines terms that are specific to that clause.
Part 2 – Amount of flexible care subsidy
Clause 9 sets out a formula for calculating the amount of flexible care subsidy that is payable in respect of a day.
Clause 10 sets out the formulae for calculating the amount of flexible care subsidy that is payable in respect of a day for a high care place, for particular types of multi-purpose service,
Clause 11 sets out the formula for calculating the amount of flexible care subsidy that is payable in respect of a day for a low care place.
Clause 12 provides a table which specifies the amount of respite supplement equivalent amount in respect of a day for the total number of high care and low care allocated.
Clause 13 provides a table which specifies the amount of community care subsidy in respect of a day depending on the Accessibility/Remoteness Index of Australia.
Schedule 2 – Concessional resident equivalent amounts
This schedule is provided for the purpose of clauses 10 and 11 of this determination. The table specifies the concessional resident equivalent amounts in respect of 65 locations. These amounts are used in calculating applicable amounts for high and low care places.
Schedule 3 – Adjusted subsidy reduction multi-purpose services
This schedule is provided for the purpose of clauses 5 and 10 of this determination. The table specifies the adjusted subsidy reduction factor in respect of 21 multi-purpose service. These factors are used in calculating applicable amounts for high care places, and in defining an adjusted subsidy reduction multi-purpose service.
Schedule 4 – Viability supplement equivalent amounts
This schedule is provided for the purpose of clauses 5, 6, 7 and 8 of this determination.
Clause 1 of Schedule 4
This clause provides a table that specifies the viability supplement equivalent amounts in respect of 10 degrees of isolation. These amounts are used for determining whether a multi-purpose service is a Category A service, and in defining a viability supplement equivalent amount. This clause also defines terms that are used in the table.
Clause 2 of Schedule 4
This clause provides a table that specifies the viability supplement equivalent amounts in respect of a range of scores. These amounts are used for determining whether a multi-purpose service is a Category B service, and in defining a viability supplement equivalent amount.
Clause 3 of Schedule 4
This clause provides a table that specifies the viability supplement equivalent amounts in respect of a range of scores. These amounts are used for determining whether a multi-purpose service is a Category C service, and in defining a viability supplement equivalent amount.