EXPLANATORY STATEMENT
Issued by the authority of the Minister for Ageing
Aged Care Act 1997
Aged Care (Residential care subsidy – amount of accommodation supplement) Determination 2008
The Aged Care Act 1997 (the Act) provides for the 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 44-5A(3) of the Act provides that the accommodation supplement for a particular day is the amount determined by the Minister by legislative instrument or worked out in accordance with a method determined by the Minister by legislative instrument.
The accommodation supplement is payable in respect of supported residents receiving care in eligible services (for example, services that are certified and are not providing care to the resident on an extra service basis).
In summary, supported residents are those who entered a residential care service on or after 20 March 2008 and whose assets are below a certain maximum asset threshold (this threshold is set out in the Aged Care (Residential care subsidy – amount of maximum asset threshold) Determination 2008).
This determination sets out the method for working out the amount of the accommodation supplement. This involves a number of steps.
First, the applicable maximum rate of the accommodation supplement for a supported resident is worked out. The applicable maximum rate varies depending on whether the service meets certain building requirements in relation to fire safety and privacy and space.
If the service meets the building requirements (these are detailed in section 21.11B of the Residential Care Subsidy Principles 1997 – as amended by the Residential Care Subsidy Amendment Principles 2008 (No. 2) (the Residential Care Subsidy Principles) the applicable maximum rate of the accommodation supplement is $26.88.
If the service does not meet those requirements the applicable maximum rate of the accommodation supplement is $24.37.
Once the applicable maximum rate has been identified, the next step is to work out the notional accommodation supplement payable in respect of the resident.
This varies depending on the circumstances of the care recipient:
- if the recipient is unable to pay a bond or a charge and a hardship determination is in place in respect of the care recipient, then the notional accommodation supplement is the applicable maximum rate;
- if the value of the assets of the person is less than the minimum permissible asset value then the notional accommodation supplement is the applicable maximum rate. The minimum permissible asset value has the same meaning as in section 57-12(3) of the Act. In summary, this is 2.5 times the basic age pension amount at the time of the care recipient’s entry to the residential care service (or such higher amount as set out in the User Rights Principles 1997).
- in any other case, the notional accommodation is worked out applying the formula
AMR - [(A -T)/ 2080]
where:
AMR is the applicable maximum rate of accommodation supplement for the person.
A is the value of the person’s assets at the time when he or she entered the residential care service or at another time specified in the Residential Care Subsidy Principles 1997 for paragraph 44-5B (1) (c) of the Act.
T (threshold) is the minimum permissible asset value.
The final step in the process involves working out the actual accommodation supplement payable for the person. This is based on the notional accommodation supplement.
If the service has the required mix of residents then the actual accommodation supplement is the same as the notional accommodation supplement.
If the service does not have the required mix, then the service only receives 75 per cent of the notional accommodation supplement payable in respect of the care recipient.
The required mix of residents is as follows:
- more than 40% of the residents to whom the service provides residential care (other than respite care), who are both post-2008 reform residents and new residents, must be supported residents; or
- more than 40% of the new residents to whom the service provides residential care (other than respite care) must be supported, concessional or assisted residents.
It should also be noted that if the value of the person’s assets exceeds the maximum asset threshold determined under section 44-5B(1)(c) of the Act, the person will not be entitled to accommodation supplement because he or she will not be a supported resident (unless there is a hardship determination in force and the person is a post-2008 reform resident).
This Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Consultation
The Department of Health and Ageing undertook extensive consultation on the policy that is implemented through the Aged Care Amendment (2008 Measures No. 1) Act 2008 which amends the Aged Care Act 1997. This Determination flows from these amendments.