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.
Overview
The Aged Care Act 1997 was enacted to provide a legislative framework for the funding and delivery of aged care services in Australia. This Act was introduced to address the growing need for structured and reliable support for elderly individuals requiring residential care, recognising the challenges faced by smaller, rural, and remote providers in maintaining financial viability. The Act ensures that aged care services are provided in a manner that is both efficient and equitable, addressing the specific needs of various aged care recipients. The policy objective of the Act is to facilitate the provision of quality aged care services through a robust funding mechanism that includes various supplements to account for the unique circumstances of different care providers. The Aged Care (Residential Care Subsidy – Amount of Viability Supplement) Determination 2009 (No. 1) was made under the authority of the Minister for Ageing and is intended to set the amount of the viability supplement payable to eligible residential care services, ensuring these services can continue to operate despite their challenging circumstances.
Scope and Application
The Aged Care (Residential Care Subsidy – Amount of Viability Supplement) Determination 2009 (No. 1) applies to approved providers of residential aged care services under the Aged Care Act 1997. These providers can receive residential care subsidy payments, which include a viability supplement for services that operate in circumstances that might otherwise be financially non-viable, such as those in remote and isolated areas with a high proportion of special needs residents. The Act is a Commonwealth legislation, thus its application is across Australia. The supplement is part of the residential care subsidy and its amount is determined by the Minister under section 44-29(8) of the Act, which may vary based on factors such as the number of places in services, the degree of isolation, and other criteria as determined by the Minister. This Determination sets out the specific amounts of the viability supplement for services under three schemes: the 1997, 2001, and 2005 schemes, each with their own payment criteria. The supplement amounts are adjusted in accordance with the Consumer Price Index and the Wage Cost Index, and information about the increases will be disseminated to approved providers via print and electronic media. This Determination revokes the previous determination under section 44-29(8) of the Act.
Key Provisions
The Aged Care (Residential Care Subsidy – Amount of Viability Supplement) Determination 2009 (No. 1) sets the amount of the viability supplement payable to services under the Aged Care Act 1997 (sections 44-29(8) and (9)). This determination applies to three different schemes: the 1997 scheme, the 2001 scheme, and the 2005 scheme, each of which has distinct criteria and payment amounts based on the specific circumstances of the residential care service. These schemes are designed to provide financial assistance to aged care homes that face challenges due to their location, size, and the special needs of their residents. The determination came into effect on 1 July 2009 and revoked the previous determination that set the amounts of the supplement under section 44-29(8) of the Act (clause 3).
Under this Determination, the viability supplement is tailored to the specific needs of each scheme, with different rates set for each. For instance, Clause 5 specifies the amount for the 1997 scheme, Clause 6 for the 2001 scheme, and Clause 7 for the 2005 scheme, which offers higher assistance to more rural and remote services. Additionally, Clause 8 addresses the supplement for services transitioning from the 1997 or 2001 schemes, where the payment is dependent on the score achieved under the scoring system outlined in the Residential Care Subsidy Principles 1997.
The Act imposes specific obligations on entities that provide residential aged care services, such as ensuring they meet the eligibility criteria for the viability supplement under the applicable scheme. These entities must also comply with the scoring systems and other requirements set forth in the Residential Care Subsidy Principles 1997. Furthermore, they are responsible for accurately reporting their circumstances to determine the appropriate level of subsidy they are eligible for under the relevant scheme. The Act mandates that any changes in these circumstances be promptly reported to ensure ongoing eligibility for the viability supplement.
Breaching the requirements of the Act can result in civil or criminal consequences. For example, if an entity fails to report changes in circumstances that affect their eligibility for the viability supplement, they may face penalties. While the specific penalties are not detailed in the Determination, they can include fines or other sanctions as prescribed under the Aged Care Act 1997. In more severe cases, such as fraudulent claims or significant non-compliance, criminal charges may be pursued, potentially leading to substantial fines and imprisonment. The exact penalties would depend on the nature and severity of the breach.