EXPLANATORY STATEMENT
AGED CARE ACT 1997
Subsection 44-29(2)
Aged Care (Residential Care Subsidy) (Viability Supplement – Eligible Residential Care Services) Determination 2005 (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.
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 cost pressures due to isolation and small size. The viability supplement primarily benefits small services operating in rural, remote and isolated areas.
The approach in the Act is that the Secretary may, in accordance with the Residential Care Subsidy Principles 1997 (“the Subsidy Principles”), make a determination in respect of a residential care service (the Act, section 44-29(2)). The making of such a determination is a pre-condition for the payment of viability supplement (the Act, section 44-29(1)).
Section 44-29(2) allows the Secretary to make a determination if satisfied that a determination should be made having regard to certain matters including matters specified in the Subsidy Principles. In 2001, arrangements were put in place for the payment of viability supplement. These arrangements are being replaced in 2005.
The present determination (“the Determination”) covers all eligible approved providers for the period 2001 to 2005, thus enabling viability supplement to be paid under the arrangements which were put in place in 2001. It is intended that this determination be repealed and replaced with a new determination from the commencement of the 2005 arrangements. Detailed notes (see Attachment) follow on the clauses in the current determination.
The Determination is a “legislative instrument” for the purposes of the Legislative Instruments Act 2003.
The Determination is expressed to commence on 1 January 2001. Subsection 12(2) of the Legislative Instruments Act provides that if a legislative instrument is expressed to take effect from a time before it is registered, but the instrument would adversely affect the rights of, or impose liabilities on a person at a time before the instrument is registered, the instrument or provision has no such effect in relation to the period before the instrument is registered.
The retrospective commencement of the Determination does not contravene subsection 12(2), because no Approved Provider will suffer any reduction in the amount of any viability supplement which they might have been receiving. The amount of viability supplement is set out in Ministerial Determinations made under section 44-29(8) of the Act and these are unaffected by the current Determination.
Industry has been consulted through the Minister’s Implementation Taskforce for implementation of recommendations arising from the Review of Pricing Arrangements in Residential Aged Care, an Industry Reference Group including the Rural Health Alliance, and with State and Territory Governments (through the Victorian State Government). Additionally, a small number of submissions were received.
ATTACHMENT
NOTES ON CLAUSES
Clause 1 sets out the name of the Determination.
Clause 2 sets out the commencement date. The Determination is taken to have commenced on 1 January 2001.
Clause 3 revokes any previous Determinations by the Secretary.
Clause 4 sets out two definitions:
After the 2001 arrangements were put in place, viability supplement could be paid under either of two schemes which governed the viability supplement at this time:
- the scheme which was initially put in place when the Act commenced operation in 1997; and
- a modified scheme which was put in place in 2001.
The Determination uses the term “1997 scheme service” to refer to a residential aged care service which was able to qualify under the terms of the 60-point test which applied under the 1997 scheme but was not able to qualify under the terms of the new 2001 scheme. A special transitional provision which was introduced as part of the 2001 arrangements (section 21.34A of the Subsidy Principles) allowed such services to continue to receive viability supplement in accordance with the 1997 scheme.
The Determination uses the term “2001 scheme service” to refer to a service which qualifies under the terms of the 40-point test (in section 21.34 of the Subsidy Principles) which has applied under the 2001 scheme.
Clause 5 sets out that the Determination is made in respect of a residential care service that is either a 1997 scheme service or a 2001 scheme service. This enables viability supplement to be paid in respect of any service in either of these two situations. The amount of subsidy which is payable is determined in Ministerial Determinations under section 44-29(8) of the Act.