EXPLANATORY STATEMENT
Issued by the authority of the Secretary of the Department of Health and Ageing
Aged Care Act 1997
Aged Care (Residential care subsidy – amount of maximum asset threshold)
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 44-5B(1)(c) of the Act provides that the Secretary may determine, by legislative instrument, an amount (in relation to a day) for the purposes of the definition of supported resident.
A supported resident is a person who:
- is being provided with residential care (other than respite care) through a residential care service;
- is a post-2008 reform resident (in essence – this means that they entered residential aged care on, or after, 20 March 2008); and
- had assets below a maximum asset threshold at the time at which the person entered the residential aged care service (or such other time as specified in Principles).
The effect of a person being a supported resident is that they are potentially eligible for Commonwealth government assistance in meeting the costs of their residential aged care accommodation. Such assistance is provided through payment of an ‘accommodation supplement’.
The purpose of this Aged Care (Residential care subsidy – amount of maximum asset threshold) Determination 2008 (the Determination) is to set out a method for working out the maximum asset threshold below which a person’s assets must be, in order for them to be a supported resident.
The method described in the Determination provides that the maximum asset threshold is worked out by multiplying the maximum rate of accommodation supplement by 2080 and adding the resulting amount to the amount of the lower asset threshold.
The maximum rate of accommodation supplement is set out in the Aged Care (Residential care subsidy – amount of accommodation supplement) Determination 2008 (specifically in paragraph (a) of Step 1 in section 4 of that Determination). This amount changes on 20 March and 20 September of each year.
The lower asset threshold is the amount obtained by rounding to the nearest $500.00 (rounding $250.00 upwards) an amount equal to 2.5 times the basic age pension amount at the time.
By way of example, on 20 March 2008, the maximum asset threshold will be $90,410.40 which is worked out as follows:
$26.88 (maximum accommodation supplement) x 2080 + $34,500 (lower asset threshold)
This maximum asset threshold will change twice per year (on 20 March and 20 September) when the maximum accommodation supplement and the lower asset threshold change.
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 directly results from these amendments.