EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Mental Health and Ageing
Aged Care Act 1997
Aged Care (Residential Care – Amount of Basic Subsidy) Determination 2012 (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 residential aged care services (approved providers) can be eligible to receive residential care subsidy payments in respect of the care they provide to approved care recipients.
Subsection 44-3(2) of the Aged Care Act 1997 (the Act) provides that the Minister for Ageing may determine, by legislative instrument, the amount of the basic subsidy for a day. This is one of the amounts of money that the Government pays an approved provider in respect of a care recipient.
The purpose of the Aged Care (Residential Care – Amount of Basic Subsidy) Determination 2012 (No. 1) (the Determination) is to specify the indexed rates of basic subsidy to apply from 1 July 2012. This Determination also revokes Aged Care (Residential Care Subsidy – Basic Subsidy Amount) Determination 2011 (No. 1).
The difference between the Determinations is that the amount of basic subsidy for a day has been increased in accordance with the standard indexation arrangements.
The Determination sets out different ways to calculate the amount of basic care subsidy depending on factors such as:
– whether the care recipient has a Resident Classification Scale (RCS) assessment
– whether the care recipient has an Aged Care Funding Instrument (ACFI) classification. The ACFI was introduced on 20 March 2008 to replace the RCS as the basis for allocating basic care subsidies to providers of residential aged care.
– whether the care recipient is receiving residential care as respite care.
– whether the care recipient is on extended hospital leave or if there was late receipt of appraisal or reappraisal (which will have the effect of reducing the amount of basic subsidy paid).
Indexation has been applied to the Aged Care Funding Instrument (ACFI) domain amounts in Schedule 1 of this determination. However as part of its aged care reform package included in the 2012 Budget, the Government announced it would make changes to the ACFI to moderate higher than anticipated levels of growth and to redirect some funding from care subsidies to other reform measures. The Government has reduced the rate payable for each ACFI domain category such that when indexation is applied to the reduced rates, the amount payable is the same as would have applied before indexation.
Consultation
Indexation of the subsidy 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 instrument.
Information about the increase in the amount of the subsidy will be disseminated via electronic media to approved providers.
There has been extensive consultation with the aged care sector on changes to the ACFI. The Department consulted with the sector through the ACFI Monitoring Group between December 2011 and March 2012 and has consulted directly with peak bodies and providers since the Living Longer Living Better aged care reform package announcement on 20 April 2012.
This Determination commences on 1 July 2012. The Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Aged Care (Residential Care – Amount of Basic Subsidy) Determination 2012 (No. 1)
This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of Legislative Instrument
The purpose of the Aged Care (Residential Care – Amount of Basic Subsidy) Determination 2012 (No. 1) (the Determination) is to specify the indexed rates of basic subsidy to apply from 1 July 2012. This Determination also revokes Aged Care (Residential Care Subsidy – Basic Subsidy Amount) Determination 2011 (No. 1).
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
Mark Butler
Minister for Mental Health and Ageing
Overview
The Aged Care Act 1997, enacted by the Commonwealth Parliament, provides a regulatory and funding framework for aged care services in Australia. This legislation seeks to address the needs of aged care recipients by ensuring that approved providers can receive subsidy payments for the care they deliver. The Aged Care (Residential Care – Amount of Basic Subsidy) Determination 2012 (No. 1) was introduced to specify the indexed rates of the basic subsidy applicable from 1 July 2012, replacing the previous Determination from 2011. This Determination was made under the authority of the Minister for Mental Health and Ageing, Mark Butler, and aims to index the rates of basic subsidy in accordance with established policy, thereby maintaining the purchasing power of the subsidy amidst inflation and other economic factors. The Determination also accounts for changes to the Aged Care Funding Instrument (ACFI) introduced as part of the Government’s aged care reform package to manage the growth in care subsidies and redirect funding to other reform measures.
Scope and Application
The Aged Care Act 1997 applies to persons and entities approved to provide residential aged care services, ensuring the regulation and funding of these services in Australia. Specifically, the Aged Care (Residential Care – Amount of Basic Subsidy) Determination 2012 (No. 1) sets out the indexed rates of basic subsidy applicable from 1 July 2012, replacing the previous Determination from 2011. This Determination applies to approved providers who receive subsidy payments for the care provided to approved care recipients, with calculations varying based on factors such as the Resident Classification Scale or Aged Care Funding Instrument classifications, whether the care is for respite, and conditions like extended hospital leave or late appraisal. The Act and its Determinations extend nationally across Australia, and while the Act provides broad coverage, certain exclusions or thresholds may apply depending on specific eligibility criteria and service provisions. Subordinate instruments such as this Determination further extend or clarify the application of the Act by setting specific subsidy rates, subject to indexation and reform measures aimed at moderating growth and redirecting funding.
Key Provisions
The Aged Care (Residential Care – Amount of Basic Subsidy) Determination 2012 (No. 1) (sections 1-4) sets out the indexed rates of the basic subsidy for residential aged care services provided from 1 July 2012. It specifies the amount of money the government pays to approved providers in respect of care recipients. This Determination revokes the Aged Care (Residential Care Subsidy – Basic Subsidy Amount) Determination 2011 (No. 1) and introduces updated subsidy rates. The calculation of the basic care subsidy varies based on factors such as whether the care recipient has a Resident Classification Scale (RCS) assessment or an Aged Care Funding Instrument (ACFI) classification, whether the care recipient is receiving respite care, and whether the care recipient is on extended hospital leave or if there was late receipt of appraisal or reappraisal. Indexation has been applied to the ACFI domain amounts, although changes have been made to moderate higher than anticipated levels of growth and to redirect some funding to other reform measures.
The Determination imposes obligations on approved providers to ensure they comply with the specified rates for basic subsidies. Providers must accurately assess and classify care recipients according to the RCS or ACFI, as applicable, and report these classifications to the government. Providers are also required to report any instances of respite care, extended hospital leave, or late receipt of appraisal or reappraisal, as these factors affect the amount of basic subsidy paid. The Determination provides clear guidelines on how to calculate the subsidy based on these various factors, ensuring that providers receive the correct amount of government funding for the care they provide.
There are no specific offences, penalties, or civil/criminal consequences outlined in the Determination itself. However, the Aged Care Act 1997 under which this Determination is made, does provide for a range of penalties for non-compliance with the Act's provisions. For example, under section 181 of the Act, a person who is found to have contravened any provision of the Act may be liable to a penalty not exceeding 500 penalty units (currently approximately AUD 57,500). For corporations, the maximum penalty can be significantly higher, up to 5,000 penalty units (approximately AUD 575,000) for serious or repeated breaches. The Act also allows for civil penalties and legal action to be taken against non-compliant providers.