Aged Care (Subsidy, Fees and Payments) Amendment (March Indexation) Determination 2021

EXPLANATORY STATEMENT

Issued by the authority of the Minister for Senior Australians and Aged Care Services

Aged Care Act 1997

Aged Care (Subsidy, Fees and Payments) Amendment (March Indexation) Determination 2021

The Aged Care Act 1997 (Act) provides for the regulation and funding of aged care services. Persons who are approved under the Act to provide aged care services (approved providers) may be eligible to receive subsidy and supplement payments in respect of the care they provide to approved care recipients.

Purpose

The Aged Care (Subsidy, Fees and Payments) Amendment (March Indexation) Determination 2021 (Amending Determination) amends the Aged Care (Subsidy, Fees and Payments) Determination 2014. The purpose of the Amending Determination is to increase the amount of supplements payable to approved providers of aged care services in respect of a day from 20 March 2021 in line with the changes to the consumer price index (CPI), in addition to increasing the value of a number of caps and thresholds in line with the age pension.

The Amending Determination applies only in respect of care recipients who are not continuing care recipients. The amount of subsidy and supplements payable in respect of continuing care recipients is determined in the Aged Care (Transitional Provisions) (Subsidy and Other Measures) Determination 2014, which will be amended by the Aged Care (Transitional Provisions) (Subsidy and Other Measures) Amendment (March Indexation) Determination 2021 to align with the Amending Determination.

The Amending Determination is a legislative instrument for the purposes of the Legislation Act 2003.

Authority

The Act provides that for each type of aged care, the Minister may determine the amount of subsidy and supplement payable to an approved provider for the provision of that type of aged care. Specifically, the authority for making specific determinations in the Amending Determination is set out in the following table:

Reliance on subsection 33(3) of the Acts Interpretation Act 1901

Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

Commencement

The Amending Determination commences on 20 March 2021.

Consultation

Routine indexation of supplements in this determination is calculated through the use of a well‑established formula based on the CPI as a measure of the movements in the non-labour costs of providers. Accordingly, no specific consultation was undertaken with respect to the amounts to which routine indexation has been applied in this Amending Determination.

Information about the increase in rates and relevant thresholds from 20 March 2021 will be disseminated via electronic media to approved providers.

Regulatory Impact Statement (RIS)

The Office of Best Practice Regulation (OBPR) has previously advised that a Regulation Impact Statement is not required for legislative instruments in order to implement routine indexation (OBPR ID 11719)

ATTACHMENT

Details of the Aged Care (Subsidy, Fees and Payments) Amendment (March Indexation and Other Measures) Determination 2021

Section 1 states that the name of the instrument is the Aged Care (Subsidy, Fees and Payments) Amendment (March Indexation) Determination 2021.

Section 2 states that the instrument commences on 20 March 2021.

Section 3 provides that the authority for the making of the instrument is the Aged Care Act 1997.

Section 4 provides that each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

Schedule 1 – Amendments

Aged Care (Subsidy, Fees and Payments) Determination 2014

Item 1 - Amendments of listed provisions – indexation of amounts

This item provides for the indexation of amounts in relation to the following:

• the respite supplement;
• the caps which limit the amount of means tested and income tested care fees payable by care recipients;
• the cap on the value of the former principal residence;
• the asset thresholds at which different taper rates apply in the asset test;
• the accommodation supplement; and
• the income thresholds at which the different caps on the income tested care fees in home care apply.

Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Humans Rights (Parliamentary Scrutiny) Act 2011

Aged Care (Subsidy, Fees and Payments) Amendment (March Indexation) Determination 2021
 

The Aged Care (Subsidy, Fees and Payments) Amendment (March Indexation) Determination 2021 is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny Act) Act 2011.

Overview of Legislative Instrument

This legislative instrument amends the Aged Care (Subsidy, Fees and Payments) Determination 2014, and increases the amount of particular supplements payable to approved providers of aged care services in line with the changes to the consumer price index (CPI), in addition to increasing the value of certain caps and thresholds in line with the age pension. 

Human Rights Implications

This legislative instrument engages the following human rights as contained in Articles 11(1) and 12(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR) and Articles 25 and 28 of the Convention of the Rights of Persons with Disabilities (CRPD):

•       the right to an adequate standard of living, including with respect to food, clothing and housing, and to the continuous improvement of living conditions (Article 11(1) of ICESCR and Article 28 of CPRD); and

•       the right to the enjoyment of the highest attainable standard of physical and mental health (Article 12(1) of ICESCR and Article 25 of the CPRD).

Indexation of aged care subsidies and payments increase the amount of subsidy payable to approved providers for the provision of care and services to people with a condition of frailty or disability who require assistance to achieve and maintain the highest standard of physical and mental health. It also increases the amounts of additional payments in the form of supplements   that are payable to approved providers to assist with the costs of caring for people who are financially disadvantaged. Indexation of aged care fees increases the thresholds and caps that are taken into account in determining how much people who can afford to contribute to the cost of their care can be asked to pay.

These changes are designed to ensure the payments and contributions keep pace with increases in the consumer price index. This helps ensure that aged care providers continue to receive sufficient funds in order to provide care recipients with a high standard of living and care.

In doing the above, this legislative instrument positively engages the rights set out in Articles 11(1) and 12(1) of the ICESCR and Articles 25 and 28 of the CRPD by promoting the right to an adequate standard of living and the right to the enjoyment of the highest attainable standard of physical and mental health for persons receiving aged care.

Conclusion

This legislative instrument is compatible with human rights as it promotes the right to an adequate standard of living and the highest attainable standard of physical and mental health.

Senator the Hon Richard Colbeck

Minister for Senior Australians and Aged Care Services