EXPLANATORY STATEMENT

Issued by the Authority of the Minister for Ageing

Aged Care Act 1997

Residential Care Subsidy Amendment Principles 2007 (No. 1)

The Aged Care Act 1997 (‘the Act’) regulates the Australian Government’s role in supporting quality aged care in Australia.  One function of the Act is to determine the rules under which parties that provide aged care (‘approved providers’)  may operate.  There are also rules that set out how approved providers must deal with persons receiving residential care (‘care recipients’), or approved to receive residential care (‘prospective care recipients’).  One of the areas covered by the Act relates to the payment of residential care subsidies to approved providers in respect of the care they supply to care recipients. 

The Residential Care Subsidy Principles 1997 (‘the Principles’) deals with eligibility for the Residential Care Subsidy (a payment by the Australian Government to approved providers for providing residential care to care recipients).  The Principles detail the eligibility requirements for the subsidy including how it is paid and what amount is paid.

The Conditional Adjustment Payment (CAP) is a component of the Residential Care Subsidy.  The eligibility requirements that approved providers must satisfy for CAP are detailed under Part 10, Division 4 of the Principles.  CAP is payable to an approved provider as a percentage (7% for the 2007-08 financial year) of the Base Subsidy received by an approved provider.

In summary, the Principles require approved providers to:

(a)   encourage staff training and provide a notice each year to the Department of Health and Ageing (the Department) confirming they have encouraged staff training at their residential care services;

(b)   prepare a financial report that complies with the requirements set out in the Principles and have that report audited each year.  In general, if requested, an approved provider must provide a copy of its most recent audited financial report to a:

• recipient of its service (or their representative);
• person approved as a recipient of residential care (or their representative) who is considering receiving care through its service; and/or
• person or agency authorised by the Secretary of the Department. 

Approved providers must also provide a written notice each year to the Department confirming that they met the reporting requirements for the previous financial year; and

(c)   participate in any aged care workforce census conducted by or on behalf of the Department.

The Residential Care Subsidy Amendment Principles 2007 (No. 1) remove access to exemptions from one or more applicable accounting standards and the requirement to treat residential aged care as a reportable segment.

Authority to make Principles

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.

Consultation

As part of finalising the conditions for CAP (in 2004-05), there was consultation with industry that exemptions would be removed from the Principles.

Legislative Instrument

The Residential Care Subsidy Amendment Principles 2007 (No. 1) is a legislative instrument for the purposes of the Legislative Instruments Act 2003.  Schedule 1 of the Residential Care Subsidy Amendment Principles 2007 (No. 1) is taken to commence on the day after it is registered. 

On the advice of the Office of Best Practice Regulation, the Department has undertaken a self assessment of the regulatory impact of the Residential Care Subsidy Amendment Principles 2007 (No. 1).  This assessment has identified low to no impact on industry and as such no further regulatory impact analysis has been conducted.

Details of the amendments to the Principles are listed at Attachment A.

ATTACHMENT A

NOTES ON CLAUSES

Section 1 states that the name of the amendments to the Principles is the Residential Care Subsidy Amendment Principles 2007 (No. 1).

Section 2 states that Schedule 1 commences on the day after the amendments to the Principles are registered.

Section 3 states that Schedules 1 amends the Principles.

Schedule 1

Item 1 & 2

These items remove references to applications for an exemption from section 21.26C of the Principles.

Item 3

This item removes references to applications for an exemption from subsection 21.26F(3)(c) of the Principles.

Item 4

This item replaces paragraphs 21.26F(3)(e)(i) and (ii) with two new subsections, namely 21.26F(3)(e) and (f).

Item 5

This item removes the explanation contained in subsection 21.26F(3A) that a financial report prepared with exemptions is deemed to still be a compliant financial report.

Item 6

This item removes references to exempted accounting standards.

Item 7

This item completely removes section 21.26FA, which was the section that provided the mechanism to request and be granted exemptions.

Item 8

This item removes exemptions as a reviewable decision under the Principles.