EXPLANATORY STATEMENT
Issued by the authority of the Minister for Ageing
Aged Care Act 1997
Residential Care Subsidy Amendment Principles 2008 (No. 3)
The Minister for Ageing makes this amendment to the Residential Care Subsidy Principles 1997 under subsection 96-1(1) of the Aged Care Act 1997 (the Act). The name of this amendment is the Residential Care Subsidy Amendment Principles 2008 (No. 3).
Background
The Conditional Adjustment Payment (CAP) is an additional primary supplement under the Aged Care Act 1997, payable to Approved Providers of residential aged care. When the CAP was introduced in the 2004-05 Budget, there was an intention to review the CAP program and funding during the 2007-08 financial year. As a consequence the Residential Care Subsidy Principles 1997 included an application period clause for the CAP to go to 30 June 2008.
The 2008-09 Budget announced a 1.75 per cent increase in the level of the CAP payment for the 2008‑09 financial year, and a review to be completed by the end of October 2008. The CAP review will examine the extent to which CAP has been effective in achieving financial, management and governance improvements. It will also examine the need for and level of any further medium term financial assistance to encourage providers to become more efficient through improved management practices.
To enable CAP to be paid in 2008-09 and beyond, the amending instrument removes the reference to 1 July 2008 as the end date of operation.
Consultation
This amendment provides for a continuation of the CAP which was being widely asked for in the Budget context. It benefits the Aged Care sector and has no adverse impact. As a consequence, no separate consultation was undertaken on the amendment.
NOTES ON CLAUSES
Section 1 states that the name of the Instrument is the Residential Care Subsidy Amendment Principles 2008 (No. 3).
Section 2 states that the Instrument is to commence on 1 July 2008.
Section 3 states that the Instrument amends the Residential Care Subsidy Principles 1997 in accordance with the Schedule.
Schedule 1 Amendments
Item 1
This item omits ‘This Division applies in respect of a payment period that begins before
1 July 2008.’ from subsection 26.26A of the Residential Care Subsidy Principles 1997 and inserts ‘This Division applies in respect of a payment period that begins on or after 1 April 2005.’ into subsection 26.26A of the Residential Care Subsidy Principles 1997. This enables the CAP to be paid in respect of a payment period that begins on a date on or after 1 July 2008.
Overview
The Residential Care Subsidy Amendment Principles 2008 (No. 3) was enacted to address the issue of the impending expiration of the Conditional Adjustment Payment (CAP) program under the Aged Care Act 1997. This amendment was introduced by the Minister for Ageing, made pursuant to subsection 96-1(1) of the Aged Care Act 1997, and its primary objective is to ensure the continuation of the CAP beyond its originally scheduled end date of 1 July 2008. The policy objective behind this amendment is to provide ongoing financial assistance to Approved Providers of residential aged care, thereby encouraging improvements in financial, management, and governance practices within the sector. The amendment was designed to respond to the demand for the continuation of CAP, as expressed in the Budget context, and it has been implemented without the need for separate consultation due to its positive impact on the Aged Care sector.
Scope and Application
The Residential Care Subsidy Amendment Principles 2008 (No. 3) pertains to the amendment of the Residential Care Subsidy Principles 1997 under the Aged Care Act 1997. This amendment is aimed at extending the application period for the Conditional Adjustment Payment (CAP) which is an additional primary supplement payable to Approved Providers of residential aged care. The amendment is applicable to entities such as Approved Providers who are engaged in residential aged care services and is designed to ensure the continued payment of CAP beyond the initially set end date of 1 July 2008. The amendment applies nationally across Australia, as it is a federal legislative instrument. The amendment does not specify any exclusions, exemptions, or thresholds, and its application is direct without the need for further extension through subordinate instruments. The purpose of this amendment is to facilitate the ongoing financial support to residential aged care providers as part of the government's commitment to maintaining the quality and efficiency of aged care services within the sector.
Key Provisions
The main operative sections of the Residential Care Subsidy Amendment Principles 2008 (No. 3) pertain to the extension and continuation of the Conditional Adjustment Payment (CAP) program, which is an additional primary supplement under the Aged Care Act 1997. This amendment was introduced to ensure the CAP could be paid beyond its initially set end date of 1 July 2008, thus extending its application to payment periods starting on or after 1 April 2005 (subsection 26.26A of the Residential Care Subsidy Principles 1997). This change was necessary to allow for the continuation of the CAP, as highlighted in the 2008-09 Budget, which included a 1.75 per cent increase in CAP payments and a commitment to review the program's effectiveness by the end of October 2008.
The Act imposes several obligations on the parties it governs, primarily focusing on the Approved Providers of residential aged care who are eligible to receive the CAP. These providers must meet certain criteria and demonstrate their commitment to achieving financial, management, and governance improvements as part of the CAP program. The amendment ensures that the CAP remains available for these providers, thereby supporting their efforts to enhance the quality of aged care services they offer. Additionally, the Act mandates that the CAP review, which is scheduled to be completed by the end of October 2008, will examine the program's effectiveness and the need for further financial assistance to encourage more efficient management practices within the sector.
Any breaches of the provisions outlined in the Residential Care Subsidy Amendment Principles 2008 (No. 3) may have significant legal consequences. While the specific offences, penalties, or consequences are not detailed within the Explanatory Statement, it is implied that non-compliance with the requirements for receiving the CAP or failure to meet the stipulated improvements could result in penalties under the Aged Care Act 1997. These penalties could include fines or other civil or criminal sanctions, although the exact penalties would depend on the nature and severity of the breach. It is essential for Approved Providers to adhere strictly to the conditions set forth in the Act to avoid any adverse legal outcomes.