EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Ageing
Aged Care Act 1997
Aged Care (Residential Care Subsidy – Basic Subsidy Amount) 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.
Subsection 44-3(2) of the Aged Care Act 1997 (the Act) provides that the Minister for Ageing may determine, by legislative instrument, the amount of the basic subsidy for a day. This is one of the amounts of money that the Government pays an approved provider in respect of a care recipient.
The purpose of the Aged Care (Residential Care Subsidy – Basic Subsidy Amount) Determination 2010 (No. 1) (the Determination) is to specify the indexed rates of basic subsidy to apply from 1 July 2010. This Determination also revokes Aged Care (Residential Care Subsidy – Basic Subsidy Amount) Determination 2009 (No. 1).
The difference between the Determinations is that the amount of basic subsidy for a day has been increased in accordance with increases to 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.
The Determination sets out different ways to calculate the amount of basic care subsidy depending on factors such as:
– whether the care recipient has a Resident Classification Scale (RCS) assessment
– whether the care recipient has an Aged Care Funding Instrument (ACFI) classification. The ACFI was introduced on 20 March 2008 to replace the RCS as the basis for allocating basic care subsidies to providers of residential aged care
– whether the care recipient is receiving residential care as respite care.
Further details of this Determination are attached.
The Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Consultation
Indexation of the subsidy 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 instrument.
Information about the increase in the amount of the subsidy will be disseminated via print and electronic media to approved providers.
ATTACHMENT
NOTES ON DETERMINATION
Part 1 – Preliminary
Section 1 Name of Determination
This section provides that the title of the Determination is the Aged Care (Residential Care Subsidy – Basic Subsidy Amount) Determination 2010 (No. 1).
Section 2 Commencement
This Determination commences on 1 July 2010.
Section 3 Revocation of previous determination
Section 3 revokes the previous determination Aged Care (Residential Care Subsidy – Basic Subsidy Amount) Determination 2009 (No. 1).
Section 4 Definitions
This section provides definitions for words and terms used in this Determination.
Part 2 – Care recipients receiving residential care other than as respite care
Section 5 Application of Part 2
This Part applies to a care recipient receiving residential care other than as respite care.
Section 6 Amount for care recipient whose RCS classification is in effect
This section specifies the basic subsidy amount for a day for a care recipient who has an RCS classification that is in effect.
Different amounts of basic subsidy are payable based on the RCS classification level of the care recipient and whether the care recipient is entitled to the full amount or a reduced amount of subsidy. A reduced amount is payable in respect of a care recipient for whom there is no RCS classification. Such care recipients are taken to be classified at the lowest applicable RCS classification level and a reduced subsidy is payable.
Section 7 Care recipients whose RCS classification ceases to have effect on or after commencement – amount for day on or after date of effect of ACFI classification
This section describes how to calculate the basic subsidy for a care recipient who had an RCS classification that ceased to have effect on or after 20 March 2008 and who also has an ACFI classification that is in effect.
For a care recipient whose most recent RCS classification ceased to have effect on or after commencement of the ACFI, if the daily basic subsidy amount payable for a care recipient classified under ACFI is not at least $15 more than the daily basic subsidy amount payable for the care recipient’s expired RCS classification, the daily basic subsidy amount payable will remain as the amount for the care recipient’s most recent expired RCS classification.
If the daily basic subsidy amount payable for a care recipient with an ACFI classification is $15 more than the daily basic subsidy amount payable for the care recipient’s expired RCS classification, the daily basic subsidy amount payable will be the ACFI amount (subject to an upper limit).
Prior to commencement of the ACFI, a care recipient’s care needs must have increased above a threshold level before an increased rate of basic subsidy was payable. The requirement that the ACFI basic subsidy amount must exceed the RCS basic subsidy amount by $15 or more before the ACFI basic subsidy amount is payable mirrors this arrangement during the transition from RCS to ACFI. The $15 threshold represents the weighted average of one category increase in basic subsidy under the RCS.
Section 8 Care recipients who do not have an RCS classification – amount for day on or after date of effect of ACFI classification
This section specifies the daily basic subsidy amount that applies to a care recipient who, on 20 March 2008, did not have an RCS classification that was in effect and who has an ACFI classification that is in effect on the day for which subsidy is being calculated.
The section sets out the amounts of basic subsidy that are payable in three different circumstances:
– if the care recipient’s classification level is the interim low level;
– if the care recipient is not classified at the interim low level but the ACFI amount is less than or equal to a prescribed maximum; and
– in any other case.
Section 9 Care recipients with an ACFI classification – amount for day before date of effect of ACFI classification (late receipt of appraisal or reappraisal)
This section sets out the amount of basic care subsidy that is payable if an appraisal or reappraisal is received late.
The amount of basic subsidy varies depending on whether the appraisal or reappraisal was received within 3 months after the end of the appraisal or reappraisal period or more than 3 months after the end of the appraisal or reappraisal period.
Section 10 Amount for care recipients on extended hospital leave
Section 10 specifies that the amount of daily basic subsidy that will be paid in respect of a care recipient who is on extended hospital leave will be half of the daily basic subsidy amount that would otherwise be payable. Extended hospital leave occurs when a care recipient has taken leave for a continuous period of 30 days or more in order to attend a hospital for the purpose of receiving hospital treatment.
Prior to commencement of the ACFI, the daily basic subsidy amount for a care recipient on extended hospital leave with an RCS classification was reduced by two category levels, which in some cases could reduce the basic subsidy by more than half. For administrative simplicity a basic subsidy reduction of half has been introduced from commencement of the ACFI.
Part 3 – Care recipients receiving residential care as respite care
Section 11 Application of Part 3
This Part applies to a care recipient receiving residential care as respite care.
Section 12 Amount for days within maximum number for provision of respite care
This section specifies the daily basic subsidy rates for a care recipient who is receiving low or high level residential care as respite care.
The basic subsidy rates replicate the respite care rates set prior to commencement of the ACFI (that is, low level respite care is paid at the RCS classification level 6 and high level respite care is paid at the RCS classification level 3). Section 6 of the Determination sets out the rates of basic care subsidy that correspond to the RCS classification levels.
Section 13 Amount for days exceeding maximum number for provision of respite care
This section specifies that no daily basic subsidy amount will be paid if the number of days on which the care recipient has been previously provided with respite care in the financial year equals or exceeds the maximum number specified in the Residential Care Subsidy Principles 1997.
Section 14 Amount for residential care service exceeding respite care proportion
This section specifies that no daily basic subsidy amount will be paid if the residential care service provides a greater proportion of respite care to care recipients than that specified in the conditions attached to the allocation of places to the approved provider.
Schedule 1 – Domain amounts
This table outlines the daily basic subsidy amount paid for each domain category. The ACFI amount, for a care recipient, is the sum of the domain amounts for each domain category in the care recipient’s ACFI classification.