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.
Overview
The Aged Care (Residential care subsidy – amount of accommodation supplement) Determination 2008 was enacted to provide clarity and structure in determining the accommodation supplement payable under the Aged Care Act 1997. This legislation aims to ensure that approved providers of residential aged care services receive the appropriate subsidy based on the care they provide to approved care recipients. The determination was introduced by the Minister for Ageing under the authority of the Aged Care Act 1997, with the policy objective of streamlining and standardising the process for calculating the accommodation supplement, thereby ensuring fair and consistent support for care recipients.
This legislative instrument specifies a method for calculating the accommodation supplement, taking into account various factors such as the building requirements of the service, the asset value of the care recipient, and the overall mix of residents within the service. The determination outlines a step-by-step approach to ascertain the applicable maximum rate of the supplement, the notional accommodation supplement, and the final amount payable, ensuring that all calculations are transparent and based on established criteria. The enacting body, the Parliament, sought to address the need for a clear and systematic framework to support the implementation of the aged care reforms introduced in 2008.
Scope and Application
The Aged Care (Residential care subsidy – amount of accommodation supplement) Determination 2008 outlines the method for calculating the accommodation supplement under the Aged Care Act 1997. This supplement is payable to approved providers in respect of supported residents receiving care in eligible services. The primary focus is on residential aged care services provided to individuals who entered such services on or after 20 March 2008 and whose assets are below a specified threshold. The amount of the supplement varies based on the service's compliance with building requirements for fire safety and privacy, with a maximum rate of $26.88 for compliant services and $24.37 for non-compliant ones. The notional supplement is determined by the applicable maximum rate, adjusted for the recipient's asset value and any hardship determinations. Finally, the actual supplement payable depends on whether the service meets certain resident mix criteria, with eligible services receiving the full supplement and others receiving 75% of the notional supplement. This Determination is a legislative instrument under the Legislative Instruments Act 2003, and it implements amendments introduced by the Aged Care Amendment (2008 Measures No. 1) Act 2008.
Key Provisions
The main operative sections of this legislation (Aged Care (Residential care subsidy – amount of accommodation supplement) Determination 2008) detail the methodology for calculating the accommodation supplement for supported residents in residential aged care services. Section 44-5A(3) of the Aged Care Act 1997 stipulates that the accommodation supplement amount is determined either by the Minister through a legislative instrument or by a method prescribed by the Minister. The determination outlines the steps to calculate this supplement, starting with identifying the applicable maximum rate based on whether the service meets specified building requirements. For services meeting these requirements, the applicable maximum rate is $26.88, whereas for those that do not, it is $24.37. The next step involves determining the notional accommodation supplement, which depends on the care recipient's circumstances, such as their asset value and whether a hardship determination is in place. If the care recipient's assets are below a certain threshold, the notional supplement is equal to the applicable maximum rate. Otherwise, it is calculated using a formula involving the applicable maximum rate, the asset value, and a minimum permissible asset threshold. Finally, the actual supplement is determined, which may be reduced to 75 per cent if the service does not have the required mix of residents.
The Act imposes several obligations on parties involved in residential aged care services. Approved providers must ensure that their services meet the building requirements to qualify for the higher accommodation supplement rate. Additionally, care recipients must meet the criteria for being classified as supported residents, which includes entering the service after 20 March 2008 and having assets below the specified maximum asset threshold. Providers are also required to accurately calculate the accommodation supplement for eligible residents based on the prescribed methodology and submit appropriate claims for subsidy payments. The Department of Health and Ageing, as the administering authority, must ensure the determination is implemented in accordance with the Act and oversee compliance by providers.
There are no specific offences outlined in the Aged Care Act 1997 or the Aged Care (Residential care subsidy – amount of accommodation supplement) Determination 2008. However, breaches of the Act can result in civil and administrative consequences. For instance, providers found to have miscalculated or improperly claimed accommodation supplements could be liable to repay any overpayments and may face penalties. Additionally, the Department of Health and Ageing can take enforcement actions against providers who do not comply with the requirements of the Act, including the potential for fines. The maximum penalties for such breaches would be in accordance with the general provisions of the Aged Care Act 1997, which could include fines up to a significant amount, depending on the nature and severity of the breach.