EXPLANATORY STATEMENT
Issued by the authority of the Minister for Mental Health and Ageing
Aged Care Act 1997
Residential Care Grant Amendment (Various Measures) Principle 2013
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 payments in respect of the care they provide to approved care recipients.
Section 96-1 of the Act allows for the Minister to make Principles providing for various matters required or permitted by a Part or section of the Act. Among the Principles made under section 96-1 are the Residential Care Grant Principles 1997 (the Principles).
Persons who are approved under the Act to provide aged care services can be eligible to receive residential care grants under Part 5.1 of the Act to contribute towards the cost of the capital works associated with some projects undertaken to establish residential care services or to enhance their capacity to provide residential care.
The Principles set out a number of matters that relate to the allocation and amounts of residential care grants. At present, they deal with the following matters:
- criteria for allocation of a residential care grant;
- meeting the needs of people with special needs; and
- the amount of residential care grants.
On 20 April 2012, the Government announced the Living Longer Living Better aged care reform package. The announcement included the Government’s intention to refocus the capital grants program to support the needs of providers in regional, rural and remote areas and those caring for special needs groups. The reform required amendments to be made to Part 5.1 of the Act. The amendments included the removal of a level of detail (regarding criteria for allocation of grants and conditions of grants) from the Act that is more appropriately set out in the Principles and grant agreements.
The purpose of the Residential Care Grant Amendment (Various Measures) Principle 2013 (the Amending Principle) is to insert the relevant information into the Principles that was previously in Part 5.1 of the Act. These amendments will improve consistency with other grants under the Act and increase flexibility in administration. In particular, the Principles can be amended in future to allow for the criteria for allocation of grants to change as the needs and priorities of the community change. Details of the amendments are set out in the Attachment.
The Amending Principle is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
A number of the proposed amendments described in this Amending Principle rely on amendments described in the Aged Care (Living Longer Living Better) Act 2013 which commence on 1 August 2013. This Amending Principle is being made in advance of this commencement date. This is possible in accordance with section 4 of the Acts Interpretation Act 1901, which allows for the exercise of powers between enactment and commencement of an Act including, for example, the power to make changes to delegated legislation which flow from changes made to the primary legislation (in this case, changes to the Aged Care Act 1997).
Consultation
The Living Longer Living Better aged care reform package was developed in close consultation with the aged care sector, including consumers, industry and professional bodies.
As part of the reform, the Act required amendment. The changes to the Principles flow from the amendments to the Act.
Consultation on the proposed changes to the Act, and to delegated legislation, commenced in November 2012, with the public release of a paper providing an overview of the proposed legislative changes.
A video presentation detailing the changes was also made available through the Living Longer Living Better website, to assist with public understanding of the proposed changes.
During November and December 2012, the Department of Health and Ageing (the Department) also held briefing sessions in Melbourne, Sydney and Canberra on the proposed changes.
Stakeholders and the general community were able to provide written comments during a four-week period (21 November – 21 December 2012). The comments were made publicly available on the Living Longer Living Better website, unless the author requested otherwise. The Department received 54 submissions from members of the public, peak bodies and approved providers in response to the published overview of legislative amendments. Submissions received via the consultation on the overview of the proposed legislative changes were used to inform drafting of the amending bills and the delegated legislation.
In March and April 2013, the Department held industry briefing sessions across Australia to provide information and to explain, in detail, the proposed legislative changes included in the package of Bills introduced into Parliament on 13 March 2013. The briefing sessions also outlined changes to delegated legislation. For those who were unable to attend the briefings a copy of the presentation, supporting handouts, a detailed Questions and Answers document and an information video were made available on the Living Longer Living Better website.
An exposure draft of the Amending Principle was made available on the Living Longer Living Better website in May 2013.
Regulation Impact Statement
The Office of Best Practice Regulation has advised that no Regulatory Impact Statement is required (OBPR ID 14985).
Commencement
This Amending Principle commences on 1 August 2013.
ATTACHMENT
Details of the Residential Care Grant Amendment (Various Measures) Principle 2013
Clause 1 states that the name of the Amending Principle is the Residential Care Grant Amendment (Various Measures) Principle 2013.
Clause 2 states that the Amending Principle commences on 1 August 2013.
Clause 3 provides that the Amending Principle is made under the Aged Care Act 1997.
Clause 4 provides that each instrument that is specified in a Schedule to the instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to the instrument has effect according to its terms.
Schedule 1 – Amendments
Item 1 - Section 20.3 (definition of major city)
Item 1 substitutes the definition of ‘major city’ to reflect the latest Census materials.
The definition refers to the Australian Standard Geographical Classification (ASGC): Volume 5 – Remoteness Structure, July 2011, produced by the Australian Bureau of Statistics (ABS). It provides an objective way of comparing the remoteness of a location with other locations by classifying areas as major cities, inner regional, outer regional, remote and very remote.
In January 2013 the ABS replaced the previous 2006 Remoteness Structure with the 2011 Remoteness Structure to incorporate 2011 Census information.
A criterion for allocation of a residential care grant under the Principles is that the majority of the care recipients (who currently or will in the future) receive care to which the grant relates, must be, amongst other things, people of a kind specified in the Principles. One of these kinds of people is ‘people who do not live in a major city’.
Item 2 - Section 20.3 (note)
Consistent with current drafting practices, item 2 repeals the note in section 20.3 and substitutes a new note which advises that a number of expressions used in the Principles are defined in the Act.
Item 3 - Parts 2 and 3
Item 3 repeals Part 2 and Part 3 and substitutes a new Part 2.
Part 2 and 3 formerly provided for the criteria for allocations of a residential care grant and rules relating to meeting the needs of people with special needs.
New Part 2 consolidates the rules relating to criteria for allocations and identifies the matters the Secretary must consider in determining the priority between applications for residential care grants.
Part 2 – Criteria for allocations
Section 20.4 - Purpose of Part (Act, ss72-1(2))
New section 20.4 explains the purpose of Part 2 of the Principles. In particular, this section explains that Part 2 sets out the criteria for allocation of grants to approved providers with respect to capital works projects relating to the provision of residential care.
Section 20.5 - Application
New section 20.5 explains the application of Part 2 of the Principles. Part 2 applies to an allocation of a residential care grant made on or after 1 August 2013 (the date that the relevant Living Longer Living Better amendments commence operation), provided that the application for the allocation was made on 1 August 2013 or later.
Item 9 of the Amending Principle explains the rules where an application for the allocation of a grant was made before 1 August 2013.
Section 20.6 - General criteria
New section 20.6 sets out the general criteria for the allocation of a residential care grant.
In particular, subsection 20.6(1) details the type of care recipients who will receive care to which the grant relates. In particular, a majority of the care recipients must be one or more of the following:
- supported residents, concessional residents or assisted residents;
- people with special needs (as defined in the Act);
- people who live in a location where there is a demonstrated need for additional residential care services;
- people who do not live in a major city.
Subsection 20.6(2) specifies other criteria that the Secretary must consider, including that the applicant:
- has demonstrated that:
- it is financially and organisationally viable on an ongoing basis;
- it does not have the capacity to fund all or part of the project in question without a residential care grant;
- is not a State or Territory or an authority of a State or Territory.
In addition, if the applicant is or has been a provider of aged care, the applicant must either have a very good record of, or a demonstrated commitment to improvement, in respect to:
- its conduct as a provider;
- its compliance with responsibilities as a provider; and
- meeting its obligations arising from the receipt of payment from the Commonwealth for the provision of aged care.
Finally, new subsection 20.6(3) provides that the applicant must not have entered into any contracts for the construction of premises to be used to provide the residential care to which the project relates and that no work has started on the construction of such premises.
These general criteria are a consolidation of criteria in the Act as well as the Principles prior to amendments to the Act.
Section 20.7 - Criteria for determining priority between applications
New section 20.7 brings together criteria formerly included in section 72-3 of the Act (which is being repealed with effect on 1 August 2013) and criteria in the Residential Care Grant Principles 1997 prior to this amendment.
This new section explains how the Secretary determines the priority between applicants for the allocation of grants.
In particular, new subsection 20.7(1) states that the Secretary will consider the following factors in determining the priority to be given to applications for the allocation of a grant:
- the proportion of relevant care recipients who are, or will be supported residents, concessional residents or assisted residents; or people with special needs;
- the location of the residential care service (in particular whether it is not in a major city);
- the availability of other aged care services in the area;
- the need for the grant to assist in establishing or upgrading the relevant residential care service;
- whether there is an urgent need for the grant due to unforeseen circumstances;
- the extent to which the project will meet the needs of care recipients living with dementia;
- whether the project will provide high quality accommodation for care recipients;
- whether the project will provide significantly improved operational efficiency; and
- the adequacy of any arrangements proposed for the care of care recipients and other residents while the project is being completed.
Under subsection 20.7(2), the Secretary must also give priority to projects that:
- meet an urgent need for:
- building;
- rebuilding;
- renovation; or
- restoration work
in order to improve or maintain access to residential care. This would include ensuring the capacity to meet changing care needs arising from the increased frailty of care recipients or the increased prevalence of dementia; and
- offer the Commonwealth best value for money.
Item 4 - Part 4
Item 4 renumbers Part 4 (Amount of a residential care grant) as Part 3.
Item 5 - Subsection 20.9(3)
This amendment clarifies that the meaning of ‘capital works costs’ for the purposes of section 20.9 relates to a project for which a residential care grant is payable.
Item 6 - Paragraph 20.9(3)(a)
The purpose of this amendment is to clarify that the meaning of ‘service’ in this paragraph means a ‘residential care service to which the grant relates’.
Item 7 - At the end of subsection 20.9(3) (before the note)
Section 20.9 of the Principles currently provides a formula for working out the amount of a residential care grant and specifies the things that may be taken into account in doing so. In particular, the capital work costs must be determined and then considered against the total amount spent or available to spend by the approved provider towards the project.
Item 7 amends subsection 20.9(3) to make it clear that the following are things that are not to be included in calculating the capital works costs:
- normal overhead and operating costs;
- any tax payable by the residential care service to which the grant relates, including any tax payable as a result of receiving the grant;
- costs associated with obtaining finance for the project; and
- the cost of interest related to any finance obtained for the project.
Item 8 - Subsection 20.9(3) (note)
Item 8 repeals the note after subsection 20.9(3) and substitutes a new note that explains that capital works costs include the cost of acquiring land and furniture, fittings or equipment, but do not include costs referred to in subsection 70-3(2) of the Act.
Subsection 70-3(2) of the Act refers to costs that the Secretary is satisfied are attributable to a part of larger premises where another part of the premises is not, or will not be, connected with the provision of residential care. These costs are taken not to be capital works costs relating to the residential care in question.
Item 9 - At the end of the Principles
This item inserts a new Part 4.
Part 4 - Transitional provisions
Item 9 adds a new Part 4 that deals with transitional arrangements to apply to allocations of residential care grants where the approved provider applied for the grant before the amendments in the Aged Care (Living Longer Living Better) Act 2013 took effect but the allocation had not been made at that time.
Section 20.10 – Application for residential care grants made before 1 August 2013
Subsection 20.10(1) states that section 20.10 applies in circumstances where the approved provider applied for the allocation of the grant before 1 August 2013, but the allocation of the grant was not actually made until after that date.
According to section 20.10(2), the criteria for the allocation of the grant are those that would have applied prior to the amendments in Schedule 1 of the Aged Care (Living Longer Living Better) Act 2013 and this Amending Principle taking effect.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Residential Care Grant Amendment (Various Measures) Principle 2013
This Legislative Instrument 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 the Legislative Instrument
The Residential Care Grant Amendment (Various Measures) Principle 2013 (the Legislative Instrument) forms part of the package of Living Longer Living Better aged care reforms. The amendments are necessary as a consequence of changes made by the Aged Care (Living Longer Living Better) Act 2013 that amends the Aged Care Act 1997 (the Act).
As part of the Living Longer Living Better reform package, amendments have been made to the provisions relating to the allocation and payment of grants under Chapter 5 of the Act.
The amendments to Chapter 5 of the Act involve the removal of a level of detail (regarding criteria for allocation of grants and conditions of grants) from the Act. The Legislative Instrument amends the Residential Care Grant Principles 1997 (the Principles) to insert the relevant information deleted from Part 5.1 of the Act, which relates to residential care grants, into the Principles. By moving a level of detail from the Act to the Principles, the amendments increase the flexibility and responsiveness of the residential care grants program by enabling the criteria for the allocation of residential care grants to be changed more readily when this is necessary to meet the changing needs and priorities of the community.
Human Rights Implications
The Legislative Instrument is compatible with the right to an adequate standard of living and the right to enjoyment of the highest possible 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.
The Legislative Instrument engages the right to health and to an adequate standard of living in that it facilitates the provision of residential aged care to people who might otherwise have difficulty in accessing the care and services they need. The Secretary may allocate residential care grants in accordance with the criteria set out in the instrument to meet the capital works costs associated with projects that might not otherwise be undertaken by approved providers of aged care. These projects might require Commonwealth support in the form of a residential care grant because of the special needs of the target group of care recipients, their limited ability to contribute towards the cost of their accommodation and care, or the additional construction costs associated with the location of the project.
While the amendments identify target groups that must be considered in allocating the residential care grants, the legislative instrument does not limit the rights of people who do not fall within these target groups.
Conclusion
This Legislative Instrument is compatible with human rights as it promotes the human right to health and the right to an adequate standard of living.
Senator the Hon Jacinta Collins
Minister for Mental Health and Ageing