EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Ageing
Aged Care Act 1997
Residential Care Subsidy Amendment Principles 2010 (No. 1)
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.
One set of Principles made under the Act is the Residential Care Subsidy Principles 1997 (the Residential Care Subsidy Principles).
The purpose of the Residential Care Subsidy Amendment Principles 2010 (No. 1) (the Amending Principles) is to reduce regulatory burden on Commonwealth funded aged care providers by implementing changes to reporting requirements for the Conditional Adjustment Payment (CAP), as agreed by the Government response to the Productivity Commission’s Annual Review of Regulatory Burdens on Business: Social and Economic Infrastructure Service.
The CAP was introduced in 2004-05 following a recommendation from the Hogan
Review (2004) to provide an incentive to residential aged care providers to improve their efficiency and productivity by improving corporate governance and financial management practices.
CAP funding is voluntary and conditional on approved providers complying with
the requirements set out in the Residential Care Subsidy Principles. Currently, to receive
the subsidy the participating approved provider must:
- encourage and offer opportunities for staff training
- prepare, and make available, audited General Purpose Financial Reports (GPFRs) each year to residents, potential residents, their representatives and any person or agency authorised by the Secretary of the Department
- participate in periodic Departmental workforce surveys
- provide a separate written notice to the Secretary to notify compliance with requirements.
The Amending Principles remove the requirement on aged care providers to lodge a separate written notice with the Secretary to demonstrate compliance with the financial reporting and workforce survey requirements.
Further details of these Amending Principles are attached.
The Amending Principles are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Consultation
The Department consulted with the aged care industry through the Ageing Consultative Committee in relation to the Productivity Commission’s recommendation.
The Ageing Consultative Committee comprises peak industry, professional and consumer bodies. Sector feedback was considered in the implementation and fine tuning of the recommendations.
ATTACHMENT
NOTES ON CLAUSES
Part 1 – Preliminary
Clause 1 states that the title of the Amending Principles is the Residential Care Subsidy Amendment Principles 2010 (No. 1).
Clause 2 states that the Amending Principles commence on 1 July 2010.
Clause 3 states that Schedule 1 amends the Residential Care Subsidy Principles 1997.
Schedule 1 – Amendments
Item 1
Section 21.26B (1) provides the definition of financial period for the purposes of the Conditional Adjustment Payment (CAP). Item 1 updates the definition to align the term of the financial period with the existing timeframe for lodging audited financial reports. This will ensure that approved providers will not have to make changes to their existing business processes.
Item 2
This item makes a consequential change flowing from the amendment detailed at Item 6. As approved providers will no longer need to provide a written notice to the Secretary confirming the approved provider’s compliance with section 21.26F, there is no longer any need to detail the form that the notice should take. This item therefore removes the reference (in section 21.36C) to section 21.26F (2) (b).
Item 3
Item 3 is consequential to the change in definition of financial period (described at Item 1) and ensures that providers will continue to receive CAP throughout November 2010.
Items 4, 5 and 6
Under current arrangements, approved providers give the Secretary a copy of their audited financial report and a notice in writing including a statement to the effect that the approved provider has complied with CAP requirements. Item 6 removes the requirement on aged care providers to lodge a separate written notice with the Secretary to demonstrate compliance with CAP financial reporting and formalises the audited financial report as the means of demonstrating compliance.
Items 4 and 5 are consequential to the changes described in Item 6. As a consequence to the change to paragraph 21.26F (2) (b), sub-subparagraph 21.26F (2) (a) (iv) (D) (which requires the approved provider to provide a copy to a person or agency authorised by the Secretary if requested) is no longer necessary and can be removed.
Item 7
This provision currently removes any doubt that if an approved provider complies with CAP reporting requirements in relation to a payment period (as defined under 43-2 of the Aged Care Act 1997) it is considered to comply for each payment period for the relevant financial year.
Amendments to 21.26F (2A) maintain this arrangement, but remove the reference to approved providers giving the Secretary a separate written notice of compliance.
Item 8
Item 8 amends paragraph 21.26F (3) (f) to reflect recent changes to the accounting standards and ensure that, for the purposes of aged care, all approved providers comply with segment reporting requirements set out in the standards.
Items 9 and 10
These items make consequential changes to ensure that, where an approved provider takes responsibility for a residential care service part way through (or at the end of) a relevant financial year, they are taken to have complied with requirements associated with the preparation and provision of audited financial reports for the relevant financial year.
Items 11 and 12
These items remove the requirement on aged care providers to lodge a separate written notice with the Secretary to demonstrate compliance with CAP reporting in relation to aged care workforce census.