EXPLANATORY STATEMENT
Issued by the authority of the Minister for Ageing
Aged Care Act 1997
Determination under Subsection 44-29(8)
Aged Care (Residential Care Subsidy – Amount of Viability Supplement) Determination 2009 (No. 1)
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.
A Viability Supplement is paid to eligible aged care homes to help them operate in circumstances which might otherwise be financially non- viable for a provider, for example, remote and isolated approved aged care providers caring largely for people with special needs (as defined in the Act).
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 by legislative instrument or worked out in accordance with a method determined by the Minister by legislative instrument. 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 Determination is 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. Details of this Determination are set out in the Attachment.
Consultation
As the indexation of the supplement uses well established formula based on the Consumer Price Index and the Wage Cost Index 9, and 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.
ATTACHMENT
NOTES ON CLAUSES
Clauses 1 and 2 set out the title of the Determination and its commencement date of 1 July 2009.
Clause 3 revokes previous the previous determination 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 subsidised 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 amount of viability supplement payable under the 1997 scheme.
Clause 6 sets out the amount of viability supplement payable 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 Residential Care Subsidy Principles 1997 is 40 or 45.