Aged Care (Transitional Provisions) (Subsidy and Other Measures) Amendment (Indexation, Pre-Entry Leave and Other Measures) Determination 2015

EXPLANATORY STATEMENT

Issued by the authority of the Assistant Minister for Social Services

Aged Care (Transitional Provisions) Act 1997

Aged Care (Transitional Provisions) (Subsidy and Other Measures) Amendment (Indexation, Pre-Entry Leave and Other Measures) Determination 2015

The Aged Care (Transitional Provisions) Act 1997 (the Transitional Provisions Act), in conjunction with the Aged Care Act 1997 (the Act), provides for the funding of aged care services in operation before 1 July 2014 that are providing care to continuing care recipients.

Persons who are approved under the Act to provide aged care services (approved providers) can be eligible to receive subsidy payments under the Transitional Provisions Act in respect of the care they provide to continuing care recipients. Continuing care recipients are those who entered an aged 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 new rules relating to fees and payments that came into effect on 1 July 2014.

Section 96-1 of the Transitional Provisions Act allows the Minister to make Principles providing for various matters such as the eligibility requirements for the payment of subsidies and supplements in respect of continuing care recipients in residential care and home care.

The Transitional Provisions Act also allows the Minister to determine, by legislative instrument, the amounts of subsidy and supplements.

The first purpose of the Aged Care (Transitional Provisions) (Subsidy and Other Measures) Amendment (Indexation, Pre-Entry Leave and Other Measures) Determination 2015 (the Amending Determination) is to increase the amount of subsidies and supplements payable to approved providers of aged care services.  Part 2 of Schedule 1 updates the references to the correct power for the Minister to make determinations as a result of the Aged Care and Other Legislation Amendment Act 2014. The Amending Determination also removes Payroll tax supplement which ceased on 1 January 2015 as a result of a 2014-15 Budget Measure.

The second purpose of the Amending Determination is to reflect measures announced in the 2014-15 Mid-Year Economic and Fiscal Outlook (MYEFO). The MYEFO announced that from 1 July 2015, the payment of the residential care subsidy to residential aged care providers would be ceased for pre-entry leave (the holding of a place for up to seven days prior to a care recipient entering care).

The Amending Determination will give effect to the removal of pre-entry leave subsidy from 1 July 2015 in the event that Schedule 2 of the Social Services Legislation Amendment (No. 2) Bill 2015 (the Amending Bill), which also contains provisions to remove pre-entry leave subsidy, does not receive Royal Assent by that time.  Upon commencement, Schedule 2 of the Social Services Legislation Amendment (No. 2) Bill 2015 (the Amending Bill) will operate to cease the payment of subsidy and supplements during a period of pre-entry leave. If the Amending Bill commences then this Amending Determination will remove unnecessary provisions in the Determination (Schedule 3). If the Amending Bill does not commence by 1 July 2015 then the Amending Determination operates in the alternative to reduce the amount of subsidy paid during pre‑entry leave to nil (Schedule 2).

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

Commencement

The amendments in Schedule 1 commence on 1 July 2015. 

The commencement of amendments in Schedule 2 and 3 are dependent on the commencement of Schedule 2 of the Amending Bill. Schedule 2 of this determination commences on 1 July 2015 if Schedule 2 of the Amending Bill has not commenced on 1 July 2015. Schedule 3 of this determination commences immediately after Schedule 2 of the Amending Bill has commenced. If Schedule 2 of the Amending Bill never commences then Schedule 3 of this Amending Determination will never commence.

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 subsidies and supplements in this determination is calculated through the use of a well-established formula based on the consumer price index (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, no specific consultation was undertaken with respect to this indexation.

Information about the increase in the amount of the subsidies and supplements payable to approved providers from 1 July 2015 will be disseminated via electronic media to approved providers.

No specific consultation was undertaken with respect to the amendments contained in Schedules 2 and 3 which give effect to the MYEFO announcement.

Regulation Impact Statement

The Office of Best Practice Regulation (OBPR) has advised that no Regulation Impact Statement is required to set routine indexation (OBPR ID 17541) or to make changes in line with the Amending Bill (OBPR 18406).

ATTACHMENT

Details of the Aged Care (Transitional Provisions) (Subsidy and Other Measures) Amendment (Indexation, Pre-Entry Leave and Other Measures) Determination 2015

Clause 1 states that the name of the determination is the Aged Care (Transitional Provisions) (Subsidy and Other Measures) Amendment (Indexation, Pre-Entry Leave and Other Measures) Determination 2015.

Clause 2 sets out the commencement dates for the Amending Determination.

Clause 3 provides that the authority for the making of the determination is the Aged Care (Transitional Provisions) Act 1997.

The authority for making specific determinations is set out in the following table:

Clause 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 – Indexation and Other Measures

Part 1 – Indexation

Aged Care (Transitional Provisions) (Subsidy and Other Measures) Determination 2014

Item 1 – Amendment of listed provisions – indexation of amounts of supplements

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

• the oxygen supplement;
• the enteral feeding supplement;
• the adjusted subsidy reduction; and
• the top-up supplement;

Item 2 – Subsection 8(3) (table)

This item provides for the indexation of amounts in relation to the RCS amounts by repealing the table to subsection 10(3) and substituting a table with the indexed amounts.

Item 3 – Subsection 10(3) (table)

This item provides for the indexation of amounts in relation to the RCS amounts by repealing the table to subsection 10(3) and substituting a table with the indexed amounts.

Item 4 – Section 83 (table)

This item provides for the indexation of amounts in relation to the basic subsidy amount for home care by repealing the table to section 83 and substituting a table with the indexed amounts.

Item 5 – Section 85 (table)

This item provides for the indexation of amounts in relation to the amount of viability subsidy for home care by repealing the table to section 85 and substituting a table with the indexed amounts.

Part 2 – Other Measures

Aged Care (Transitional Provisions) (Subsidy and Other Measures) Determination 2014

Item 6 – Division 7 of Part 2 of Chapter 2

This item repeals the Division as payroll tax supplement ceased from 1 January 2015.

Item 7 – Subsection 76(1)

This item updates the reference to the power to make determinations from section 61 of the Transitional Provisions Principles to subsection 44-27(3) of the Transitional Provisions Act, as a result of the Aged Care and Other Legislation Amendment Act 2014.

Item 8 – Section 77

This item provides for the determination of the amount of veteran’s supplement under subsection 44-27(3) of the Transitional Provisions Act. 

Item 9 – Subsection 78(1)

This item updates the reference to the power to make determinations from section 64 of the Transitional Provisions Principles to subsection 44-27(3) of the Transitional Provisions Act, as a result of the Aged Care and Other Legislation Amendment Act 2014.

Item 10 – Section 79

This item provides for the determination of the amount of homeless supplement under subsection 44-27(3) of the Transitional Provisions Act. 

Schedule 2 – Residential Care Subsidy for Pre-Entry Leave

Aged Care (Transitional Provisions) (Subsidy and Other Measures) Determination 2014

Item 1 – Section 12

This item reduces the basic subsidy amount for care recipients on pre-entry leave from 30 per cent of the amount for the day for the care recipient to nil.

Schedule 3 – Residential Care Subsidy for Pre-Entry Leave after amendments to Aged Care (Transitional Provisions) Act 1997

Aged Care (Transitional Provisions) (Subsidy and Other Measures) Determination 2014

Items 1 – 10, 12 – Sections 12, 18, 23, 27, 53(2), 55(2), 57(2) and 75

These items remove provisions that refer to subsidy or supplements during pre-entry leave. When Schedule 2 of the Amending Bill commences provisions reducing subsidy and supplements during pre-entry leave will be redundant.

Item 11– Paragraph 74(a)

This item updates a section reference in light of the changes to be made by Schedule 2 of the Amending Bill.

Statement of Compatibility with Human Rights

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

Aged Care (Transitional Provisions) (Subsidy and Other Measures) Amendment (Indexation, Pre-Entry Leave and Other Measures) Determination 2015

The Aged Care (Transitional Provisions) (Subsidy and Other Measures) Amendment (Indexation, Pre-Entry Leave and Other Measures) Determination 2015 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 2011.

Overview of Legislative Instrument

This legislative instrument amends the Aged Care (Transitional Provisions) (Subsidy and Other Measures) Determination 2014 and increases the amount of particular subsidies and supplements payable to approved providers of aged care services in line with changes to consumer price index (CPI).

The legislative instrument also reflects measures announced in the 2014-15 Mid-Year Economic and Fiscal Outlook (MYEFO). The MYEFO announced that from 1 July 2015, the payment of residential care subsidy to residential aged care providers would be ceased for the holding of a place for up to seven days prior to a care recipient entering care.  Specifically, the legislative instrument operates to reduce the amount of subsidy paid during pre-entry leave to nil in the event the Social Services Legislation Amendment (No. 2) Bill 2015 does not commence by 1 July 2015.  It will also remove unnecessary provisions from the Aged Care (Transitional Provisions) (Subsidy and Other Measures) Amendment (Indexation, Pre-entry Leave and Other Measures) Determination 2015 upon commencement of the Social Services Legislation Amendment (No. 2) Bill 2015.

Human Rights Implications

This legislative instrument is compatible with the right to an adequate standard of living and the right to 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 increases the amount of residential care 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.  These increases are designed to ensure the payments and contributions keep pace with increases in the consumer price index.

This legislative instrument also prevents residential care providers from receiving subsidy while a resident is on pre-entry leave.  To the extent that the legislative instrument limits any rights by ceasing the payment of residential care subsidy payable to an approved provider while the care recipient is on pre-entry leave, the limitation is reasonable.  The limitation is mitigated by the fact that the legislative instrument does not remove a care recipient’s ability to access pre-entry leave for up to seven days prior to entering a residential care service, and does not allow an aged care provider to recoup any lost residential care subsidy for the pre-entry leave period from the care recipient.

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.

Senator the Hon Mitch Fifield

Assistant Minister for Social Services