EXPLANATORY STATEMENT

Issued by the Authority of the Minister for Ageing

Aged Care Act 1997

Residential Care Subsidy Amendment Principles 2005 (No. 2)

The Aged Care Act 1997 (“the Act”) provides for the funding of aged care services.  Persons who are approved under the Act to provide flexible aged care services can be eligible to receive flexible care subsidy payments in respect of the care they provide to approved care recipients.

The purpose of the Residential Care Subsidy Amendment Principles 2005 (No. 2) is to amend the Residential Care Subsidy Principles 1997 (‘the Residential Care Subsidy Principles’) to

 ensure that suitable leave arrangements are available so as to allow existing recipients of residential care to receive transition care following an acute or sub-acute hospital episode. 

Principles made under the Aged Care Act 1997

Subsection 96-1(1) of the Act allows the Minister to make Principles providing for various matters required or permitted by a Part or section of the Act.

Subsection 96-1(2) of the Act provides that any Principles made under subsection 96-1(1) of the Act are disallowable instruments.

The Residential Care Subsidy Principles is one of the sets of Principles made under the Act.

Context of the Residential Care Subsidy Amendment Principles 2005 (No. 2)

This amendment gives effect to the commitment by the Government in the 2004-05 Budget to provide up to 2,000 transition care places over three years to help older people make the transition from hospital care, under a new cost-shared model of care with the states and territories.

In this context, transition care refers to a kind of flexible care that is provided to a care recipient at the conclusion of an in-patient hospital episode (after the provision of any necessary acute and subacute care) and in the form of services that are goal-oriented, time-limited and therapy focussed.  The services provided will be those necessary to complete the care recipient’s restorative process, optimise the care recipient’s functional capacity and assist the care recipient, family and carer to make appropriate long-term care arrangements.  It can be provided in either a residential or community setting, and must be in a non-hospital, more home like environment.

The effect of section 42-2 of the Act, relating to leave from residential care services, is to allow existing recipients of residential aged care to take leave from their normal care arrangements.  Unlimited leave is available for a recipient to attend a hospital for the purpose of receiving hospital treatment, and 52 days is available in any financial year for other types of leave.  These arrangements ensure, within limits, that a care recipient’s normal residential care arrangements remain available following one of these periods of leave.  During these periods, the Australian Government continues to provide subsidies for residential care to the approved providers of these services, despite the absence of the care recipient.  (However, under section 44-4 of the Act, if the care recipient is on extended hospital leave from residential care, and the care recipient is not on the lowest classification level for residential care, the subsidy is reduced.) 

Experience with a number of Innovative Care Rehabilitation Service (ICRS) pilots, which were funded under the Innovative Care provisions of the Flexible Care Subsidy Principles, has suggested that the average length of time required for Transition Care will be in the order of eight weeks.  In consultation with the State and Territory officials, it has been agreed that the initial maximum period for Transition Care should be 12 weeks, with the possibility of an approved extension of up to 6 weeks.

Because hospital leave requires that the care recipient attends a hospital for hospital treatment, this unlimited form of leave is not available for an existing residential aged care recipient temporarily in Transition Care.  The 52 days available (prior to this amendment) for other types of leave would not be sufficient for transition care and, if taken for transition care, would be using a leave entitlement intended for other purposes (such as holiday time spent with the recipient’s family).  In addition, if transition care exceeded 52 days, an existing residential care recipient would risk being asked to leave their residential place after a further seven days (see paragraph 23.5(3)(d) of the User Rights Principles 1997 made under the Act). 

To establish a suitable leave entitlement for existing recipients of residential care to attend transition care, an amendment was included in the Aged Care Amendment (Transition Care and Assets Testing) Act 2005 to amend section 42-2 of the Act in such a way that a care recipient is on leave from a residential care service on a day if flexible care subsidy is payable in respect of the care recipient on that day, and the requirements specified in the Residential Care Subsidy Principles are met (paragraph 42-2(3A)(b) of the Act). 

The current amendment makes it a requirement, under the Residential Care Subsidy Principles that, for flexible care subsidy to be payable to an approved provider under paragraph 42-2(3A)(b) of the Act, the approved provider must be providing flexible care in the form of transition care to an approved care recipient.

Consultation

The parameters of transition care, as reflected in this instrument, have been developed through a consultation process with State and Territory Government representatives.  All States and Territories were included in a Transition Care Task Group, along with appropriate clinical representatives. 

Regulation impact statement

The Office of Regulation Review (ORR) assessed the proposed amendments and determined that the preparation of a Regulation Impact Statement was not required (ORR ID number 7225).

ATTACHMENT

NOTES ON CLAUSES

Clause 1 provides that the amending Principles are to be cited as the Residential Care Subsidy Amendment Principles 2005 (No. 2).

Clause 2 provides that the Principles commence on the day that they are registered.

Clause 3 amends the Residential Care Subsidy Principles 1997 as set out in the Schedule.

Schedule 1: Amendments

Item 1 amends section 21.3 to include the definition of transition care as set out under section 15.28 of the Flexible Care Subsidy Principles (as inserted by the Flexible Care Amendment Principles 2005 (No. 1)).

Item 2 inserts a new Part (Part 1AA), comprising the following new sections.

New section 21.3AA provides that new Part 1AA specifies the requirements for the purposes of paragraph 42-2(3A)(b) of the Act. 

Subsection 42-2(3A) of the Act provides that a care recipient is on leave from residential care (under Section 42-2) if flexible care is payable for the care provided and on a day that it is provided, if any requirements specified in the Residential Care Subsidy Principles are met.

Such a requirement is specified in new section 21.3AB, which provides that the kind of care provided on the day on which subsidy is payable should be flexible care in the form of transition care.