Aged Care (Subsidy, Fees and Payments) Amendment (September 2018 Indexation) Determination 2018

EXPLANATORY STATEMENT

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

Minister for Indigenous Health

Aged Care Act 1997

Aged Care (Subsidy, Fees and Payments) Amendment (September 2018 Indexation) Determination 2018

The Aged Care Act 1997 (the 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) can be eligible to receive subsidy and supplement payments in respect of the care they provide to approved care recipients.

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 Aged Care (Subsidy, Fees and Payments) Amendment (September 2018 Indexation) Determination 2018 is set out in the following table:

The purpose of the Aged Care (Subsidy, Fees and Payments) Amendment (September 2018 Indexation) Determination 2018 (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 September 2018 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 will also increase the basic subsidy amount that is payable to approved providers of residential aged care services in respect of a day from 20 September 2018 to 30 June 2019. The increase in the basic subsidy amount will give effect to the Budget measure announced on 8 May 2018 to provide additional funding for residential aged care services to assist with the transition to the new Aged Care Quality Standards. The new standards have been developed as part of the Single Quality Framework with assessment against the new standards starting from 1 July 2019. The increase in the basic subsidy will be payable until 30 June 2019. From 1 July 2019, the basic subsidy amount will return to being calculated in accordance with the routine indexation of aged care payments on the 1 July 2018 rates. 

The Amending Determination applies only in respect of care recipients who are not continuing care recipients. Continuing care recipients are those who entered a care service before 1 July 2014 and since that time have not left the service for a continuous period of more than 28 days (other than because the person is on leave), or before moving to another service, have not made a written choice to be subject to the new rules relating to fees and payments that took effect on 1 July 2014. 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.

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

Commencement

The Amending Determination commences on 20 September 2018.

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.

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. As this is in accordance with the general policy for indexation of aged care payments 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 subsidy and supplements payable to approved providers from 20 September 2018 will be disseminated via electronic media to approved providers.

ATTACHMENT

Details of the Aged Care (Subsidy, Fees and Payments) Amendment (September 2018 Indexation) Determination 2018

Section 1 states that the name of the instrument is the Aged Care (Subsidy, Fees and Payments) Amendment (September 2018 Indexation) Determination 2018.

Section 2 sets out the commencement date for the instrument.

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.

Item 2 – Subsection 7(3) (table)

This item provides for the increase of amounts in relation to the aged care funding instrument amounts by repealing the table to subsection 7(3) and substituting a new table with the increased amounts.

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 (September 2018 Indexation) Determination 2018
 

The Aged Care (Subsidy, Fees and Payments) Amendment (September 2018 Indexation) Determination 2018 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.  The legislative instrument also increases the amount of the basic subsidy that is payable to approved providers of residential aged care services.

Human Rights Implications

This legislative instrument is compatible with the right to an adequate standard of living and the right to the enjoyment of the highest attainable standard of physical and mental health as contained in Article 11(1) and Article 12(1) of the International Covenant on Economic, Social and Cultural Rights, and Article 25 and Article 28 of the Convention on the Rights of Persons with Disabilities.

This legislative instrument concerns 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 attainable standard of physical and mental health.

This legislative instrument 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.  It also 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 increases are designed to ensure the payments and contributions keep pace with increases in the consumer price index.

In addition, the legislative instrument increases the amount of basic subsidy payable to approved providers of residential care to assist with the transition to the new aged care quality standards which have been developed as part of the new Single Quality Framework.

Conclusion

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

The Minister for Senior Australians and Aged Care and Minister for Indigenous Health,

the Hon Ken Wyatt AM, MP