EXPLANATORY STATEMENT
Issued by the authority of the Minister for Mental Health and Ageing
Aged Care Act 1997
Aged Care (Residential Care Subsidy – Adjusted Subsidy Reduction) 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 44-19(2) of the Aged Care Act 1997 (the Act) provides that the Minister may determine by legislative instrument the amount of the adjusted subsidy reduction.
Under the National Health Act 1953, nursing homes that had transferred from State Government funding to Commonwealth nursing home funding were known as “adjusted fee government nursing homes”. They were paid a discounted rate of standard infrastructure funding.
The discounted subsidy is translated into the Act as the adjusted subsidy reduction. This is a reduction to the daily subsidy per resident equivalent to the discount that applied before 1 October 1997. It only applies to services that were approved as “adjusted fee government nursing homes” under the previous arrangements.
Paragraph 44-19(1)(b) of the Act provides for the Minister to determine in writing that a residential care service, or part of a residential care service through which the care is provided, is an adjusted subsidy residential care service. The Minister’s Determination under paragraph 44-19(1)(b) of the Act (F2007L01960 also known as ACA Ch 3 No. 5/2007) was updated on 13 June 2007 to remove those adjusted subsidy places that are now owned by the non-government sector.
The purpose of the Aged Care (Residential Care Subsidy – Adjusted Subsidy Reduction) Determination 2012 (No. 1) (the Determination) is to set the adjusted subsidy reduction amount with effect from 1 July 2012. This Determination also revokes the Aged Care (Residential Care Subsidy – Adjusted Subsidy Reduction) Determination 2011 (No. 1).
The difference between the Determinations is that the daily amount of adjusted subsidy reduction 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 in the wage costs of providers.
Consultation
Indexation of the adjusted subsidy reduction 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 instrument.
Information about the increase in the amount of the adjusted subsidy reduction will be disseminated via electronic media to approved providers.
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 Subsidy – Adjusted Subsidy Reduction) 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 Subsidy – Adjusted Subsidy Reduction) Determination 2012 (No. 1) (the Determination) is to set the adjusted subsidy reduction amount with effect from 1 July 2012. This Determination also revokes the Aged Care (Residential Care Subsidy – Adjusted Subsidy Reduction) 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