Aged Care (Amount of Flexible Care Subsidy - Multi-Purpose Services) Determination 2011 (No. 1)

Administered by Department of Health, Disability and Ageing

Legislation au F2011L01160 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Issued by the authority of the Minister for Mental Health and Ageing

 

Aged Care Act 1997

 

Aged Care (Amount of Flexible Care Subsidy – Multi-Purpose Services) Determination 2011 (No. 1)

 

The Aged Care Act 1997 (the Act) provides for the regulation and 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.

 

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 2011 (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 2011.  This Determination also revokes Aged Care (Amount of Flexible Care Subsidy – Multi-Purpose Services) Determination 2010 (No. 1). 

 

The difference between the Determinations is that the daily amount of flexible care subsidy payable for an MPS has been indexed in accordance with the standard indexation arrangements.  .

 

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 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.

 

Consultation

Routine indexation of the supplement uses a well established formula based on the Consumer Price Index 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 electronic media to approved providers.

 

This Determination commences on 1 July 2011.

 

The Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

 

 


ATTACHMENT

 

Details of the Aged Care (Amount of Flexible Care Subsidy – Multi-Purpose Services) Determination 2011 (No. 1)

 

 

Part 1 – Preliminary

 

1  Name of Determination

Section 1 states that the title of this Determination is the Aged Care (Amount of Flexible Care Subsidy – Multi‑Purpose Services) Determination 2011 (No. 1). 

 

2 Commencement

Section 2 states that this Determination commences on 1 July 2011.

 

3 Revocation of previous determination

Section 3 revokes the previous determination Aged Care (Amount of Flexible Care Subsidy – Multi-Purpose Services) Determination 2010 (No. 1).

 

4 Application

Section 4 provides that this Determination applies only to flexible care services that are multi-purpose services. 

 

5 Definitions

Section 5 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

 

9 Amount of flexible care subsidy

Section 9 sets out a formula for calculating the daily amount of flexible care subsidy that is payable in respect of an MPS.

 

10 Applicable amount – high care places

Section 10 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.

 

11 Applicable amount – low care places

Section 11 describes the formula for calculating the daily amount of flexible care subsidy that is payable for a low care place in an MPS.

 

12 Respite supplement equivalent amount

Section 12 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.

 

13 Additional amount of community care subsidy

Section 13 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.

 

 

Overview

The Aged Care Act 1997, enacted by the Australian Parliament, provides the framework for the regulation and funding of aged care services in Australia. It allows for the approval of services that provide flexible aged care, which can be eligible for flexible care subsidy payments for the care they provide to approved recipients. One key issue the Act aimed to address was ensuring that aged care services, particularly those in rural and remote areas, were adequately funded and regulated to meet the diverse needs of elderly Australians. The Aged Care (Amount of Flexible Care Subsidy – Multi-Purpose Services) Determination 2011 (No. 1), issued under the authority of the Minister for Mental Health and Ageing, specifies the method for calculating the flexible care subsidy payable for a day to multi-purpose services, with the rates effective from 1 July 2011. This Determination also indexes the subsidy amounts in line with standard indexation arrangements and revokes the previous Aged Care (Amount of Flexible Care Subsidy – Multi-Purpose Services) Determination 2010 (No. 1). The policy objective of this Determination is to ensure that multi-purpose services, which deliver various forms of aged care, health care, and community care in rural locations, receive appropriate financial support based on factors such as the type of care provided and the accessibility/remoteness of the location.

Scope and Application

The Aged Care Act 1997, which governs the regulation and funding of aged care services, includes provisions for flexible care subsidy payments to approved providers of such services. Specifically, the Aged Care (Amount of Flexible Care Subsidy – Multi-Purpose Services) Determination 2011 (No. 1) establishes the method for calculating the amount of flexible care subsidy payable to multi-purpose services (MPS), which are flexible care programs in rural locations that provide various forms of aged care, health care, and community care. The Determination, effective from 1 July 2011, revokes its predecessor from 2010 and adjusts the daily subsidy amount in line with standard indexation arrangements. The total subsidy comprises amounts for high, low, and community care places, along with a respite supplement equivalent amount. The rates are determined based on factors such as a basic subsidy equivalent amount, concessional resident equivalent amount, viability supplement equivalent amount, and, for high care places, an adjusted subsidy reduction amount. Additionally, an MPS in a rural or remote location with a specific Accessibility/Remoteness Index of Australia (ARIA) score may receive an additional daily amount, which increases with higher ARIA scores.

Key Provisions

The main operative sections of the Aged Care (Amount of Flexible Care Subsidy – Multi-Purpose Services) Determination 2011 (No. 1) are sections 9, 10, 11, 12, and 13, which detail the method for calculating the daily amount of flexible care subsidy payable to multi-purpose services (MPS) in respect of their high, low, and community care places, as well as the respite supplement equivalent amount. Section 9 outlines a general formula for calculating the daily flexible care subsidy amount for an MPS, while sections 10 and 11 provide specific formulae for high and low care places respectively. Section 12 specifies a daily respite supplement equivalent amount, and section 13 details the additional amount payable for community care places, which is based on the Accessibility/Remoteness Index of Australia (ARIA) score of the MPS location. The Act imposes obligations on approved providers of flexible aged care services to adhere to the specified method for calculating the flexible care subsidy. This involves taking into account various factors such as the basic subsidy equivalent amount, concessional resident equivalent amount, viability supplement equivalent amount, and adjusted subsidy reduction amount where appropriate. Furthermore, providers must ensure that their services are classified correctly according to the criteria outlined in sections 6, 7, and 8, which are based on a point system considering factors such as the location of the service, the number of beds or places, and the proportion of special needs clients. Breach of the requirements outlined in the Determination may result in civil or criminal consequences. While the Determination does not explicitly state penalties for non-compliance, the Aged Care Act 1997 provides for offences and penalties in relation to breaches of the Act. For instance, under section 138 of the Act, a person who provides false or misleading information or documentation in connection with a subsidy payment is guilty of an offence and may be subject to a pecuniary penalty of up to $22,200 for a corporation or $4,440 for an individual. Additionally, under section 139 of the Act, a person who is knowingly involved in the preparation of misleading financial statements or other documents in connection with a subsidy payment may be subject to a pecuniary penalty of up to $44,400 for a corporation or $8,880 for an individual.

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