EXPLANATORY STATEMENT
Issued by the authority of the Minister for Ageing
Aged Care Act 1997
Residential Care Subsidy Amendment Principles 2009 (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 residential aged care services (approved providers) can be eligible to receive residential care subsidy payments in respect of the care they provide to approved care recipients.
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.
The Residential Care Subsidy Principles 1997 (the Principles) is one of the sets of Principles made under the Act.
The purpose of the Residential Care Subsidy Amendment Principles 2009 (No. 2)
(the Amending Principles) is detailed below. The Amending Principles is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Residential Care Subsidy Amendment Principles 2009 (No. 2)
The change to the Principles, detailed in the Attachment, implements the 2009-10 Budget Measures to Support Older Australians designed to rectify income testing arrangements in residential aged care. By removing the 28 day exemption to income testing arrangements for people entering a residential aged care service, this measure brings the income-tested fee into line with all other aged care fees, which are payable from the day a person commences being provided with residential care. As with all other fees, the income tested fee will, from 1 January 2010, be paid from the first day that a person commences receiving care in a residential service. A person on pre-entry leave is taken to have commenced receiving care.
Consultation
The Amending Principle implement a Budget Measure announced in May 2009. The policies reflected in the Amending Principles were the subject of consultation with the aged care sector through the Ageing Consultative Committee, which comprises peak industry, professional and consumer bodies.
Details of the amendments to the Principles are listed in the Attachment.
ATTACHMENT
NOTES ON CLAUSES
Clause 1 states that the name of the Amending Principles is the Residential Care Subsidy Amendment Principles 2009 (No. 2).
Clause 2 states that the Amending Principles commence on 1 January 2010.
Clause 3 states that Schedule 1 amends the Principles.
Clause 4 clarifies that the change made by Item 1 of Schedule 1 only applies to care recipients who commence being provided with residential care by a residential aged care service on or after 1 January 2010. By virtue of sections 42-2 and 44-5E of the Act, a person on pre-entry leave is taken to have commenced being provided with residential care. For example, a person who is on pre-entry leave from 28 December 2009 to 2 January 2010 would be taken to have commenced being provided with residential care on 28 December 2009. The amendment will not apply to that care recipient (because the person commenced receiving care prior to 1 January 2010). The amendment will apply in respect of care recipients who commence pre-entry leave on or after 1 January 2010 or otherwise commence receiving care on or after that date.
Schedule 1 Amendments
Item 1
Currently, new residents entering an aged care home are not subject to the income test for the first 28 days of care. Taxpayers pay the full cost of care – even for residents with the ability to contribute.
This 28 day exemption was originally introduced for residential aged care to allow for the income assessment to be completed. However, these details are now available on the day of entry for the vast majority of new entries into residential aged care.
This item removes the 28 day exemption period for new residents who have the means to pay, and brings the arrangement into line with all other aged care fees, which are payable from the day a person commences being provided with residential care.
This only affects residents who commence being provided with residential care on or after 1 January 2010. No existing residents will be affected and no individual will experience any change in their current circumstances.