EXPLANATORY STATEMENT
Issued by the authority of the Minister for Ageing
AGED CARE ACT 1997
Subsection 44-29(8)
Aged Care (Residential Care Subsidy – Amount of Viability Supplement)
Determination 2006
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 can be eligible to receive residential care subsidy payments in respect of the care they provide to approved care recipients.
The residential care subsidy which is payable in a particular case includes a basic amount and can also include various supplements, which are intended to deal with particular circumstances. One such supplement is the viability supplement, which is available to eligible rural and remote providers of aged care services in recognition of the particular difficulties faced by such services as a result of their isolation, small size, characteristics of the majority of their residents, and consequentially higher cost structures. The viability supplement primarily benefits small services operating in rural, remote and isolated areas.
Subsection 44-29(8) of the Act provides that the viability supplement for a particular day is the amount determined by the Minister in writing or worked out in accordance with a method determined by the Minister in writing. Subsection 44-29(9) of the Act provides that the Minister may determine different amounts based upon certain matters, including the number of places in services, the degree of isolation of the services and any other matters determined by the Minister in writing.
In essence, there are three viability supplement schemes (the 1997 scheme (which was put in place when the Act commenced operation), a modified scheme which was put in place in 2001 and a new scheme which commenced operation on 1 January 2005), which run in parallel. Each scheme has its own criteria for payment and each pays different amounts of viability supplement, depending on the circumstances of the residential care service. For example, the 2005 scheme provides increased assistance to the more rural and remote residential care services.
This Ministerial Determination was made pursuant to section 44-29(8) of the Act, which sets the amount of the viability supplement which is payable to services determined by the Secretary to be eligible under each of these three schemes.
The Office of Regulation Review has advised that no Regulation Impact Statement is required for the changes to the viability supplement.
This Determination is a “legislative instrument” for the purposes of the Legislative Instruments Act 2003.
Consultation
As the indexation of this subsidy uses a well established formula for indexation, no specific consultation with industry was undertaken with respect to this instrument.
Details of this Ministerial Determination are set out in the Attachment.
ATTACHMENT
NOTES ON CLAUSES
Clauses 1 and 2 set out the title of the Determination and its commencement date (1 July 2006).
Clause 3 revokes previous Determinations which set amounts under
section 44-29(8) of the Act.
Clause 4 defines the concepts of “1997 scheme service”, “2001 scheme service” and “2005 scheme service” by reference to section 21.34 in the Residential Care Subsidy Principles 1997. Essentially, each concept refers to services which are subsidized in accordance with the terms of the points test set out in the relevant scheme.
Clause 4 also defines “Principles” as the Residential Care Subsidy Principles 1997.
Clause 5 sets out the viability supplement which is available under the 1997 scheme.
Clause 6 sets out the amount of viability supplement which is available under the 2001 scheme.
Clause 7 sets out the amount of viability supplement payable under the 2005 scheme.
Clause 8 sets out the amount of supplement payable to former 1997 or 2001 scheme services where the score attained by the services on the day under the scoring system set out in the table in subsection 21.35C (1) of the Principles is 40 or 45.
Overview
The Aged Care (Residential Care Subsidy – Amount of Viability Supplement) Determination 2006 was enacted to provide clarity and set the amounts for the viability supplement available to eligible residential care providers under the Aged Care Act 1997. This legislation was introduced by the Australian Government to address the need for a structured approach to the viability supplement, which is designed to support smaller, rural and remote aged care services that face unique challenges due to their isolation and higher operational costs. The determination was made under the authority of the Minister for Ageing and is a legislative instrument under the Legislative Instruments Act 2003. The policy objective is to ensure that the viability supplement accurately reflects the specific circumstances of eligible services, thereby supporting the sustainability of aged care services in disadvantaged areas.
Scope and Application
The Aged Care (Residential Care Subsidy – Amount of Viability Supplement) Determination 2006 applies to providers of residential aged care services who are approved under the Aged Care Act 1997. It specifically targets services that are eligible to receive residential care subsidy payments, particularly those operating in rural, remote, and isolated areas. These services are often small in size and face higher cost structures due to their isolation and the characteristics of their residents. The Determination sets out the viability supplement amounts for these services under three distinct schemes: the 1997 scheme, the modified 2001 scheme, and the new 2005 scheme. Each scheme provides different levels of supplement based on factors such as the number of places in services, the degree of isolation, and other criteria determined by the Minister. The Determination revokes previous determinations related to the viability supplement and establishes new amounts under each scheme. This legislative instrument is applicable nationally, aligning with the Commonwealth's jurisdiction over aged care funding and services. The scope and application of this Determination are further defined and clarified by subordinate instruments such as the Residential Care Subsidy Principles 1997, which set out the criteria and scoring systems for determining eligibility and supplement amounts.
Key Provisions
The Aged Care (Residential Care Subsidy – Amount of Viability Supplement) Determination 2006 sets forth the specific amounts of the viability supplement payable to eligible residential care providers under three different schemes. Section 44-29(8) of the Aged Care Act 1997 empowers the Minister to determine the amount of the viability supplement, and this determination applies to the 1997, 2001, and 2005 schemes. Each scheme has distinct criteria for eligibility and payment, with the 2005 scheme providing increased assistance to more rural and remote residential care services.
Under this determination, the viability supplement amounts for each scheme are specified. For the 1997 scheme, the supplement is set out in Clause 5; for the 2001 scheme, it is defined in Clause 6; and for the 2005 scheme, the amount is established in Clause 7. Additionally, Clause 8 addresses the supplement payable to former 1997 or 2001 scheme services based on their score under the scoring system outlined in the Residential Care Subsidy Principles 1997.
The Act imposes several obligations on the entities it governs. Firstly, residential care providers must ensure they meet the eligibility criteria for the viability supplement under their respective schemes. This includes maintaining records and providing necessary documentation to demonstrate compliance with the relevant points test and other specified criteria. Secondly, the Minister is required to determine the amount of the viability supplement in writing or according to a method determined in writing, as per subsection 44-29(8) of the Act. Thirdly, the determination must be made in accordance with the principles set out in the Residential Care Subsidy Principles 1997, ensuring consistency and fairness across all schemes.
Breaches of the provisions under the Aged Care Act 1997 may result in both civil and criminal consequences. Civil penalties can include fines and other monetary penalties for non-compliance with the Act or its regulations. The specific penalties may vary depending on the nature and severity of the breach. Criminal penalties can include imprisonment for more serious violations, such as fraudulent claims or deliberate misrepresentation of information. The maximum penalties are set out in the relevant sections of the Aged Care Act 1997 and may be subject to change through legislative amendments.