Residential Care Subsidy Amendment Principles 2009 (No. 2)

Overview

The Aged Care Act 1997, which provides for the funding of aged care services, includes provisions for residential care subsidy payments to approved providers for care given to approved care recipients. One of the sets of principles made under the Act is the Residential Care Subsidy Principles 1997. In 2009, the Residential Care Subsidy Amendment Principles 2009 (No. 2) were introduced to amend these principles, following consultation with the aged care sector through the Ageing Consultative Committee. The Amending Principles implement a budget measure announced in May 2009, which aimed to rectify the income testing arrangements in residential aged care. Specifically, the measure sought to bring the income-tested fee into line with all other aged care fees by removing the 28-day exemption to income testing arrangements for people entering a residential aged care service. This amendment was designed to ensure that the income-tested fee is payable from the first day that a person commences receiving care in a residential service, consistent with other fees. The policy objective of the Amending Principles is to ensure that the income testing for residential aged care fees is fair and consistent, aligning it with the practices for other aged care fees.

Scope and Application

The Residential Care Subsidy Amendment Principles 2009 (No. 2) applies to approved providers and care recipients under the Aged Care Act 1997, specifically concerning the payment of residential care subsidies. These principles are aimed at modifying the income testing arrangements for individuals entering residential aged care services. The amendment, which became effective on 1 January 2010, removes the previously existing 28-day exemption period during which new residents were not subject to income testing, aligning the residential care fee structure with other aged care fees that are payable from the commencement of care. This change ensures that the income-tested fee is paid from the first day of care, regardless of the individual's ability to contribute towards their care costs. The amendment applies to care recipients who commence receiving residential care on or after 1 January 2010, and does not affect existing residents. The changes were subject to consultation with relevant industry, professional, and consumer bodies through the Ageing Consultative Committee and were designed to implement a Budget Measure announced in May 2009.

Key Provisions

The Aged Care Act 1997 (the Act) facilitates the funding of aged care services, allowing approved providers to receive residential care subsidy payments for care provided to approved care recipients (section 96-1). The Residential Care Subsidy Amendment Principles 2009 (No. 2) (the Amending Principles) are designed to amend the existing Residential Care Subsidy Principles 1997 (the Principles) to address the income testing arrangements in residential aged care. The Amending Principles aim to ensure that the income-tested fee aligns with other aged care fees by requiring it to be payable from the first day of care, rather than after a 28-day exemption period. This change aligns the income-tested fee with the general requirement for fees to commence on the first day of care. The Amending Principles impose specific obligations on approved providers and care recipients. Approved providers must now charge the income-tested fee from the first day of care for new residents who have the means to pay, ensuring that all residential care fees commence on the first day of care. Care recipients who commence being provided with residential care on or after 1 January 2010 are subject to the income test from the outset, and any person on pre-entry leave is considered to have commenced receiving care. This means that for individuals who begin their pre-entry leave or care on or after this date, the income-tested fee will apply immediately. Breaches of the provisions set out in the Amending Principles may result in civil or criminal penalties. Although the specific penalties are not detailed in the Explanatory Statement, the Aged Care Act 1997 generally provides for penalties for non-compliance, including fines and, in some cases, imprisonment. The precise penalties depend on the nature and severity of the breach, and would be determined in accordance with the relevant sections of the Act. It is important for approved providers and care recipients to adhere to the requirements set out in the Amending Principles to avoid potential legal consequences.