EXPLANATORY STATEMENT
Issued by the authority of the Minister for Ageing
Aged Care Act 1997
Aged Care (Amount of Flexible Care Subsidy – Multi-Purpose Services) Determination 2010 (No. 1)
The Aged Care Act 1997 (the Act) provides for the 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.
A multi-purpose services (MPS) is a flexible care program in respect of which flexible care subsidy is payable. An MPS is a service in a rural location 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, rather it is funded on a ‘cashed-out’ basis (that is, allocated places are deemed to be occupied for the purposes of funding).
Subsection 52-1(1) of the Act provides that the Minister for Ageing may determine, by legislative instrument, the amount of the flexible care subsidy or a method that must be used to work out the amount of flexible care subsidy.
The purpose of the Aged Care (Amount of Flexible Care Subsidy – Multi-Purpose Services) Determination 2010 (No. 1) (the Determination) is to specify the method for working out the amount of flexible care subsidy payable for a day to an MPS, with rates effective from 1 July 2010. This Determination also revokes Aged Care (Amount of flexible care subsidy – multi-purpose services) Determination 2009 (No. 2).
The difference between the Determinations is that the daily amount of flexible care subsidy payable for an MPS has been increased in accordance with increases in the consumer price index (CPI) as a measure of movements in the non-labour costs of providers and the decisions of Fair Work Australia as a measure of non-productivity based movements of the wage costs of providers. This Determination also reflects the following Budget Measures for eligible MPS providers:
- the second year of the 2009-10 Budget measure ‘Measures to Support Older Australians – Aged care viability supplements increase’ which provided $14.8 million over two years to increase the viability supplement paid to eligible aged care providers in regional, rural and remote areas
- the 2010-11 Budget measure ‘National Health and Hospitals Network – Aged Care – improving the viability of community care providers’. Under this initiative, a total of $10.1 million over four years is provided to increase the viability supplement paid to eligible community aged care providers in rural and remote areas.
The total amount of flexible care subsidy payable to an MPS for a day 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 or low care places is based on:
- a basic subsidy equivalent amount
- a concessional resident equivalent amount
- a viability supplement equivalent amount
- for high care places only, an adjusted subsidy reduction amount (where appropriate).
The amount of subsidy payable to MPS for community care places is based on:
– a proportion of the community care subsidy
– an additional daily amount if the MPS is in a rural or remote location, provided that location has an Accessibility/Remoteness Index of Australia (ARIA) score of 3.52 or more. The additional daily amount increases as the ARIA score (the measure of the accessibility and remoteness of the geographical location at which the care recipient resides) increases.
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.
Further details of this Determination are attached.
The Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Consultation
As the increase to the viability supplement paid to eligible MPSs providing aged care is in accordance with the 2009-10 Budget measure ‘Measures to Support Older Australians - Aged care viability supplements increase’, no specific consultation was undertaken with respect to this increase.
With regard to the 2010-11 Budget measure ‘National Health and Hospitals Network – Aged Care – improving the viability of community care providers’, the need for increased support for rural and remote community aged care providers has emerged from the Government’s consultations on the National Health and Hospitals Network.
Further routine indexation of the supplement uses a well established formula based on the CPI 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 of 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 print and electronic media to approved providers.
ATTACHMENT
NOTES ON DETERMINATION
Part 1 – Preliminary
Section 1 Name of Determination
The title of this Determination is the Aged Care (Amount of Flexible Care Subsidy – Multi‑Purpose Services) Determination 2010 (No. 1).
Section 2 Commencement
The Determination commences on 1 July 2010.
Section 3 Revocation of previous determination
This section revokes the previous determination Aged Care (Amount of flexible care subsidy – multi-purpose services) Determination 2009 (No. 2).
Section 4 Application
This section provides that this Determination applies only to flexible care services that are multi-purpose services.
Section 5 Definitions
This section provides definitions for words and terms used in this Determination.
Sections 6, 7 and 8
These sections classify MPS (as Category A, B or C services) based on a point system which takes into account factors such as:
– for Category A services – the location of the service, the number of beds, whether the service is unable to co-locate with another service, the proportion of supported, concessional or assisted residents, whether the service is unable to co-locate with another service and whether the services caters largely for special groups including Aboriginal and Torres Strait Islander groups
– for Category B and C Services – the location of the service, the number of places and the proportion of special needs clients.
Part 2 – Amount of flexible care subsidy
Section 9 Amount of flexible care subsidy
This section sets out a formula for calculating the daily amount of flexible care subsidy that is payable in respect of an MPS.
Section 10 Applicable amount – high care places
This section sets out the formulae for calculating the daily amount of flexible care subsidy that is payable for a high care place. A different formulae applies depending on whether the MPS is an adjusted subsidy reduction multi-purpose service.
Section 11 Applicable amount – low care places
This section describes the formula for calculating the daily amount of flexible care subsidy that is payable for a low care place in an MPS.
Section 12 Respite supplement equivalent amount
This section specifies a daily amount, that is a respite supplement equivalent amount, payable for an MPS. The amount is based on the total number of high and low care places allocated to the service.
Section 13 Additional amount of community care subsidy
This section specifies the daily amount payable in respect of a community care place in an MPS. The amount is based on the ARIA score for the location of the MPS (which relies on the Accessibility/Remoteness Index of Australia).
Schedule 2 – Concessional resident equivalent amounts
This Schedule is provided for the purpose of sections 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 sections 5 and 10 of this Determination. The table specifies the adjusted subsidy reduction factor in respect of 21 MPSs. 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 sections 5, 6, 7 and 8 of this Determination.
The Schedule sets out the viability supplement equivalent amount for Category A, B and C services.