Aged Care (Residential Care Subsidy - Amount of Viability Supplement) Determination 2010 (No. 1)

Administered by Department of Health, Disability and Ageing

Legislation au F2010L01512 Not in force Legislative Instrument

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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.

 

 

 

 

Overview

The Aged Care (Residential Care Subsidy – Amount of Viability Supplement) Determination 2010 (No. 1) was introduced to update the amount of the viability supplement payable to eligible rural and remote providers of aged care services under the Aged Care Act 1997. This Act, enacted by the Parliament of Australia, addresses the funding of aged care services, ensuring that approved providers receive appropriate subsidies for the care they offer to approved care recipients. The viability supplement is a specific type of subsidy designed to support smaller services in rural and remote areas, acknowledging the unique challenges these services face due to their isolation and higher operational costs. The policy objective behind this determination is to provide increased financial support to these providers in line with economic changes, as measured by the Consumer Price Index and wage cost adjustments by Fair Work Australia, ensuring the viability supplement remains relevant and adequate. The 2010 Determination specifically adjusts the viability supplement amounts for the three existing schemes – the 1997, 2001, and 2005 schemes – with the primary increase affecting the 2005 scheme, which is the current scheme. This adjustment reflects the 2009-10 Budget measure aimed at supporting older Australians, providing an additional $14.8 million over two years to enhance the viability supplement for eligible aged care providers in regional, rural, and remote areas. The Determination also includes a safety net provision for former 1997 or 2001 scheme services, ensuring continuity and fairness in the subsidy system.

Scope and Application

The Aged Care Act 1997 applies to approved providers of residential aged care services in Australia, enabling them to receive residential care subsidy payments for the care provided to approved care recipients. This Act recognises the unique challenges faced by providers, particularly those in rural, remote, and isolated areas, by offering various supplements to the basic residential care subsidy, one of which is the viability supplement. This supplement is designed to assist eligible rural and remote providers in managing their higher cost structures due to their isolation and small size. The Aged Care (Residential Care Subsidy – Amount of Viability Supplement) Determination 2010 (No. 1) further specifies the amount of the viability supplement, effective from 1 July 2010, and revokes the previous determination from 2009. The viability supplement is calculated differently across three schemes: the 1997, 2001, and 2005 schemes, each with distinct criteria and payment amounts. Notably, the 2005 scheme, which is the current scheme, has its viability supplement rates increased in line with the Consumer Price Index and Fair Work Australia's decisions, while the other two schemes are not affected by these changes unless a provider under them would receive a higher supplement under the 2005 scheme, in which case they will be transferred to the 2005 scheme.

Key Provisions

The Aged Care (Residential Care Subsidy – Amount of Viability Supplement) Determination 2010 (No. 1) establishes the specific amounts for the viability supplement under the three existing schemes: the 1997 scheme, the 2001 scheme, and the 2005 scheme. These amounts are effective from 1 July 2010 and supersede the previous determination from 2009 (No. 2). The viability supplement is intended to assist eligible rural and remote residential care providers by addressing the unique challenges they face, such as isolation and higher operational costs. The Determination specifically adjusts the rates for the 2005 scheme, which is the current scheme, while maintaining the rates for the 1997 and 2001 schemes unless a provider would receive a higher supplement under the 2005 scheme, in which case they would be transferred to the 2005 scheme. The Determination imposes clear obligations on approved providers of residential aged care services. These providers must ensure that their services meet the specific criteria set out under each of the three viability supplement schemes. The 1997, 2001, and 2005 schemes have distinct eligibility criteria based on the number of places in the services, the degree of isolation, and other factors as determined by the Minister. Providers must also adhere to the definitions provided in Section 4 of the Determination, which include terms such as "1997 scheme service," "2001 scheme service," and "2005 scheme service." Accurate reporting and compliance with these criteria are essential to ensure that providers receive the appropriate viability supplement payments. There are no specific offences or penalties outlined in the Determination itself. However, non-compliance with the Aged Care Act 1997, which the Determination supports, can result in significant consequences. Under the Act, breaches can lead to civil or criminal penalties. For instance, knowingly providing false or misleading information can result in a civil penalty of up to $22,200 for individuals and $111,000 for corporations, as of the current legislative framework. Additionally, criminal penalties may apply for more severe breaches, including imprisonment for up to two years or fines up to $111,000 for individuals and $555,000 for corporations, depending on the nature and severity of the breach. These penalties underscore the importance of compliance with the Act and the Determination.

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