EXPLANATORY STATEMENT
Issued by the authority of the Minister for Ageing
Aged Care Act 1997
Aged Care (Residential Care Subsidy – Amount of Pensioner Supplement)
Determination 2010 (No. 2)
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.
All care recipients who meet the requirements of subsection 44-28(2) of the Act, and who are not excluded under subsections 44-28(3), (5) or (6) of the Act, are eligible for a pensioner supplement. This includes pre-2008 reform residents who receive an income support payment (but who have not agreed to pay a large accommodation bond), or have a dependent child. Residents are also not eligible for a pensioner supplement while they fail to, or elect not to, provide information for the purpose of determining their total assessable income.
Subsection 44-28(7) of the Act provides that the Minister may determine, by legislative instrument, the amount of the pensioner supplement.
The purpose of the Aged Care (Residential Care Subsidy – Amount of Pensioner Supplement) Determination 2010 (No. 2) (the Determination) is to set the amount of pensioner supplement with effect from 20 September 2010. This Determination also revokes Aged Care (Residential care subsidy – amount of pensioner supplement) Determination 2010 (No. 1).
The difference between the Determinations is that the amount of pensioner supplement for a day 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.
Consultation
The Department of Health and Ageing undertook extensive consultation on the policy, which included policy on increases in the rates of supplements, that was implemented through the Aged Care Amendment (2008 Measures No. 1) Act 2008 and related instruments.
Further consultation was undertaken as part of the Review of the Conditional Adjustment Payment and is ongoing in relation to funding arrangements.
Indexation of the supplement uses a well established formula based on the CPI as a measure of the movements in the non-labour 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 supplement will be disseminated via print and electronic media to approved providers.
The Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Overview
The Aged Care Act 1997, enacted by the Commonwealth Parliament, was introduced to address the need for structured funding of aged care services in Australia. This Act allows approved providers to receive residential care subsidy payments for the care they offer to approved recipients. To further refine these provisions, the Aged Care (Residential Care Subsidy – Amount of Pensioner Supplement) Determination 2010 (No. 2) was established to set the amount of pensioner supplement, effective from 20 September 2010, and it revokes the previous Determination No. 1. This legislative instrument was created following extensive consultation by the Department of Health and Ageing and aligns with the policy objectives outlined in the Aged Care Amendment (2008 Measures No. 1) Act 2008. The supplement amount was indexed according to the consumer price index to reflect changes in the non-labour costs of providers.
Scope and Application
The Aged Care Act 1997 applies to approved providers who offer residential aged care services and to approved care recipients who require such services and meet the specified eligibility criteria. This Act is a Commonwealth statute and thus applies across Australia. It allows for the provision of residential care subsidy payments to approved providers for the care they render to approved care recipients, with a particular focus on the pensioner supplement for eligible recipients. Exclusions from the pensioner supplement eligibility include recipients who fail to provide necessary information for income assessment and those who have agreed to pay a large accommodation bond. The Aged Care (Residential Care Subsidy – Amount of Pensioner Supplement) Determination 2010 (No. 2) extends the application of the Act by setting the amount of the pensioner supplement, which is indexed to the consumer price index, thereby ensuring adjustments for inflation in non-labour costs. This Determination revokes its predecessor from the same year, reflecting the continuous refinement of subsidy amounts to align with economic changes.
Key Provisions
The Aged Care (Residential Care Subsidy – Amount of Pensioner Supplement) Determination 2010 (No. 2) outlines the financial support available to eligible care recipients under the Aged Care Act 1997. Specifically, Section 44-28(7) allows the Minister to determine the amount of the pensioner supplement through a legislative instrument. This Determination sets the amount of the pensioner supplement, effective from 20 September 2010, and replaces the previous Determination (No. 1) from the same year. The supplement amount has been adjusted based on increases in the Consumer Price Index (CPI), which measures changes in non-labour costs for providers.
Under the Act, approved providers who offer residential aged care services can receive subsidy payments for the care they provide to approved care recipients. Care recipients who meet the eligibility criteria in subsection 44-28(2) of the Act, and are not excluded under subsections 44-28(3), (5), or (6), are eligible for a pensioner supplement. This includes pre-2008 reform residents receiving income support payments who have not agreed to pay a large accommodation bond, or those with dependent children. However, residents who fail to provide information necessary to determine their total assessable income are not eligible for the supplement. This Determination ensures that the supplement amount reflects the rising costs faced by providers, thereby maintaining the sustainability of the aged care system.
Entities governed by the Act, particularly approved providers and care recipients, have specific obligations. Approved providers must ensure they are registered and compliant with the Act's requirements to be eligible for subsidy payments. Care recipients must meet the eligibility criteria for the pensioner supplement, which involves providing accurate information regarding their income and accommodation arrangements. The Department of Health and Ageing has consulted extensively with stakeholders on the policy changes, ensuring that the Determination reflects the needs of both providers and recipients.
Breaches of the provisions outlined in the Aged Care Act 1997 and the Determination can lead to various consequences. While the Determination itself does not explicitly outline specific offences or penalties, failure to comply with the Act can result in legal actions. Providers may face penalties, fines, or sanctions if they do not adhere to the requirements for receiving subsidy payments. Care recipients who fail to provide necessary information for determining their eligibility for the pensioner supplement may be denied the supplement. The Act's provisions are enforced through the legislative framework, and penalties for non-compliance can include financial penalties or other legal actions as determined by the relevant authorities.