EXPLANATORY STATEMENT
Issued by the authority of the Minister for Health and Aged Care
Aged Care Act 1997
Aged Care (Transitional Provisions) Amendment (Viability Supplement) Principles 2016
Authority
The authority for the Aged Care (Transitional Provisions) Amendment (Viability Supplement) Principles 2016 (the Amending Principles) is section 96-1 of the Aged Care (Transitional Provisions) Act 1997 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901.
Purpose
The purpose of the Amending Determination is to amend the Aged Care (Transitional Provisions) Principles 2014 (TP Principles) to give effect to the ‘Aged care provider funding – improving the targeting of the viability supplement for regional aged care facilities’ measure that was announced as part of Budget 2016-17.
Background
The viability supplement is a payment made under the Subsidy Principles 2014 (Subsidy Principles) to improve the capacity of small, rural aged care services to offer quality care to care recipients. The Australian Government’s 2016-17 Budget provided for an extra $102.3 million over four years from 2016-17 to target the viability supplement more effectively to areas of greatest need by replacing the current out-dated remoteness classification system with the more up to date Modified Monash Model (MMM), with effect from 1 January 2017.
Details
The Amending Principles will amend the TP Principles to ensure that the changes made to the Subsidy Principles by the Subsidy Amendment (Viability Supplement Principles 2016 also apply to continuing care recipients. Specifically, the Amending Principles operate so that the MMM will replace the Accessibility/ Remoteness Index of Australia (ARIA) and Rural, Remote and Metropolitan Areas (RRMA).
The MMM takes into account the size and isolation of a town based on 2011 Census data, in comparison to ARIA classification which relies on road distances from service centres and does not incorporate demographic factors of individual towns into its classification model. MMM was developed by the Department of Health to improve upon targeting in workforce shortages programmes such as the GP Rural Incentives Programme. The Review of Australian Government Health Workforce Programs April 2013 found that the strength of the MMM was that it provides an extra layer of discrimination between large and small inner and outer regional towns.
Consultation
Consultation occurred through the Aged Care Financing Authority’s report Financial Issues Affecting Rural and Remote Provider, which identified greater cost pressures in rural and remote areas and noted that the geographical classification system of the viability supplement in aged care was out-dated and may not be best targeting funding. There were a total of 36 submissions received. Submissions were received from a mix of providers, including not-for-profit, government organisations, regional alliances and peak representative groups.
To support the Budget announcement a fact sheet ‘Changes to the Viability Supplement’ was published on 4 May 2016 providing detail on the Budget measure. Provider peak bodies such as Aged and Community Services Australia, Catholic Health Australia and Leading Age Services Australia made public statements that the changes were welcome.
This Determination commences on 1 January 2017.
This Determination is a legislative instrument for the purposes of the Legislation Act 2003.
Regulation Impact Statement
The Office of Best Practice Regulation (OBPR) has advised that the amendment does not appear to have regulatory impacts on business, community organisations or individuals (OBPR 20306).
ATTACHMENT
Details of the Aged Care (Transitional Provisions) Amendment (Viability Supplement) Principles 2016
1 Name of Determination
Section 1 states that the name of the amending Determination is Aged Care (Transitional Provisions) Amendment (Viability Supplement) Principles 2016.
2 Commencement
Section 2 states that these amendments commence on 1 January 2017.
3 Authority
This section provides the authority for making this instrument. This instrument is made under the Aged Care Act 1997.
4 Schedules
This section 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 items in a Schedule to this instrument has effect according to its terms.
Schedule 1 Amendments
Item 1 - At the end of section 55
This item adds paragraph (d) to section 55. New paragraph 55(d) provides that the Secretary may base a determination (relating to eligibility for the viability supplement) on whether the residential care service was, on the relevant day, a 2017 scheme service (within the meaning of the Subsidy Principles 2014). .
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Aged Care (Transitional Provisions) Amendment (Viability Supplement) Principles 2016
The Aged Care (Transitional Provisions) Amendment (Viability Supplement) Principles 2014 (the Principles) are 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 2011.
Overview of the Legislative Instrument
The Principles deal with the eligibility criteria that must be met for a residential care service to be eligible for the viability supplement for the provision of care to continuing care recipients.
Human Rights Implications
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 will result in an increase to the viability supplement payable to some residential care and home care services.
Conclusion
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.