EXPLANATORY STATEMENT
Issued by the authority of the Minister for Ageing
Aged Care Act 1997
Aged Care (Residential Care Subsidy – Amount of Viability Supplement) Determination 2010 (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 (approved providers) 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 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 or methods 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 by legislative instrument.
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.
The purpose of the Aged Care (Residential Care Subsidy – Amount of Viability Supplement) Determination 2010 (No. 1) (the Determination) is to set the amount of the viability supplement payable under each of the three schemes, with rates effective 1 July 2010. This Determination also revokes Aged Care (Residential care subsidy – amount of viability supplement) Determination 2009 (No. 2).
The difference between the Determinations is that the daily amount of viability supplement 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 and the decisions of Fair Work Australia as a measure of non-productivity based movements of the wage costs of providers. This Determination also implements the second year of the 2009-10 Budget measure - Measures to Support Older Australians - Aged care viability supplements increase - which provided $14.8 million over two years to increase the viability supplement paid to eligible aged care providers in regional, rural and remote areas.
The increase in the Determination is to the 2005 scheme – the current scheme. This measure does not result in a reduction in payment rates to the 1997 or 2001 schemes. If at any point an aged care provider participating in the 1997 or 2001 schemes would receive a higher supplement under the 2005 scheme, it will be transferred to the 2005 scheme.
Further details of this Determination are attached.
The Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Consultation
As the increase to the supplement is in accordance with the 2009-10 Budget measure – Measures to Support Older Australians - Aged care viability supplements increase, no specific consultation was undertaken with respect to this increase.
Further routine 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 and the decisions of Fair Work Australia as a measure of non-productivity based movements of the wage 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 indexation.
Information about the increase in the amount of the supplement will be disseminated via print and electronic media to approved providers.
ATTACHMENT
NOTES ON DETERMINATION
Section 1 Name of Determination
The title of this Determination is the Aged Care (Residential Care Subsidy – Amount of Viability Supplement) Determination 2010 (No. 1).
Section 2 Commencement
The Determination commences on 1 July 2010.
Section 3 Revocation of previous determination
This section revokes the previous determination Aged Care (Residential care subsidy-
amount of viability supplement) Determination 2009 (No. 2).
Section 4 Definitions
This section 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. This section
also defines “Principles” as the Residential Care Subsidy Principles 1997.
Section 5 Amount of viability supplement for care recipient – 1997 scheme services
This section sets out the amount of viability supplement payable under the 1997 scheme.
Section 6 Amount of viability supplement for care recipient – 2001 scheme services
This section sets out the amount of viability supplement payable under the 2001 scheme.
Section 7 Amount of viability supplement for care recipient – 2005 scheme services
This section sets out the amount of viability supplement payable under the 2005 scheme. The amount payable under this scheme has increased in the Determination in accordance with:
- the 2009-10 Budget measure – Measures to Support Older Australians – Aged care viability supplements increase
- increases in the CPI as a measure of movements in the non-labour costs of providers and the decisions of the Fair Work Australia as a measure of non-productivity based movements of the wage costs of providers.
Section 8 Safety net – former 1997 or 2001 scheme service
This section 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.