EXPLANATORY STATEMENT
AGED CARE ACT 1997
Subsection 44-29(2)
Aged Care (Residential Care Subsidy) (Viability Supplement – Eligible Residential Care Services) Determination 2005 (No.2).
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 commencing 1 January 2005. Detailed notes (see Attachment) follow on the clauses in the 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 2005. 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 (1 January 2005).
Clause 3 revokes the previous Determination, which determined the services which were eligible to receive viability supplement between 2001 and 2005.
Under the changes introduced by the Residential Care Subsidy Amendment Principles 2005 (No.2) (the “Amending Principles”), the Secretary may make determinations in respect of services covered under each of three schemes:
- The scheme which was initially put in place when the Act commenced operation in 1997; and
- the modified scheme which was put in place in 2001; and
- A new scheme which commenced operation on 1 January 2005.
Clause 4 sets out three definitions:
It defines the concepts of “1997 scheme service”, “2001 scheme service” and “2005 scheme service” by reference to a new section 21.34 in the Subsidy Principles. New section 21.34 was inserted into the Subsidy Principles with effect from 1 January 2005 by the Amending Principles. Essentially, each concept refers to services which are subsidized in accordance with the terms of the points test set out in the relevant scheme. See the commentary to section 21.34 in the Explanatory Statement to the Amending Principles for an explanation of which scheme applies to a service which is eligible under more than one of the points tests.
Clause 5 sets out that the Determination is made in respect of a residential care service that is a 1997 scheme service, a 2001 scheme service or a 2005 scheme service. This enables viability supplement to be paid in respect of any eligible service in any of these three situations. The amount of subsidy which is payable is determined in Ministerial Determinations under section 44-29(8) of the Act.