EXPLANATORY STATEMENT

Issued by the authority of the Minister for Ageing

Aged Care Act 1997

Residential Care Subsidy Amendment Principles 2012 (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. 

Section 96-1 of the Act allows the Minister to make Principles providing for various matters required or permitted by a Part or section of the Act.  Among the Principles made under section 96-1 are the Residential Care Subsidy Principles 1997 (the Residential Care Subsidy Principles).

The purpose of the Residential Care Subsidy Amendment Principles 2012 (No.1) (the Amending Principles) is to implement the basic daily fee supplement as part of the Clean Energy Future Household Assistance package.

The aim of the Clean Energy Future Household Assistance Package is to ensure low and middle income households will get assistance to help manage increases in the cost of living from the introduction of a carbon price. 

The majority of residents in aged care homes, who receive a pension or a seniors supplement or who hold a Commonwealth Seniors Health Card, will receive the clean energy advance and the clean energy supplement (clean energy payments) under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986.  This assistance will be shared between the resident and the aged care provider through an increase, by 1% of the basic age pension amount, in the maximum daily amount of resident fees permitted under the Act.

A small number of aged care residents will not qualify for these clean energy payments as they do not receive an eligible pension or seniors supplement or hold a Commonwealth Seniors Health Card.  To ensure these aged care residents are not disadvantaged by the increase in the maximum daily amount of resident fees permitted under the Act, from
1 July 2012 the basic daily fee supplement will be payable to aged care providers with eligible residents who elect to receive the supplement on the residents’ behalf and reduce the residents’ fees by an equivalent amount.

The Amending Principles make changes to the Residential Care Subsidy Principles to provide for the basic daily fee supplement as an additional primary supplement and to specify the circumstances in which the supplement will apply to a care recipient in respect of a payment period. 

For the avoidance of doubt, the Amending Principles also insert a provision to ensure that clean energy payments will not count as income when determining a resident’s total assessable income under section 44-24 of the Act for the purposes of the income test. 

Consultation

As the amendments in the Amending Principles were announced as part of the Clean Energy Futures Household Assistance Package, no specific consultation was undertaken in relation to this instrument.

Regulation impact statement

The Office of Best Practice Regulation has advised that no Regulation Impact Statement is required (OBPR ID 12669).

Further details

Further details on the Amending Principles are attached.

The Amending Principles commence on 1 July 2012.

The Amending Principles are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

ATTACHMENT A

Details of the Residential Care Subsidy Amendment Principles 2012 (No. 1)
 

Clause 1 – Name of Principles

Clause 1 states that the name of the Amending Principles is the Residential Care Subsidy Amendment Principles 2012 (No. 1).
 

Clause 2 - Commencement

Clause 2 states that the Principles will commence on 1 July 2012.
 

Clause 3 – Amendment of Residential Care Subsidy Principles 1997

Clause 3 states that Schedule 1 amends the Residential Care Subsidy Principles 1997.
 

Schedule 1 Amendments

Item 1 Section 21.24
 

Item 1 amends the boxed note in section 21.24 to include a reference to the basic daily fee supplement.

Item 2 

Item 2 inserts a new Division 3A providing for the basic daily fee supplement as an additional primary supplement and specifying the circumstances in which the supplement will apply from 1 July 2012.  

Section 21.25F provides that an approved provider will be eligible to receive the basic daily fee supplement for providing care to a resident if:

• the resident was in permanent residential care on 1 July 2012;
• the resident was not eligible to receive an age pension or seniors supplement under the Social Security Act 1991 or a service pension or seniors supplement under the Veterans’ Entitlements Act 1986 on 1 July 2012;
• the resident did not hold a Commonwealth Seniors Health Card on 1 July 2012; and
• the approved provider charges the resident no more than the maximum daily amount of resident fees permitted under Division 58 of the Act minus an amount obtained by rounding down to the nearest cent an amount equal to 1 % of the basic age pension amount (worked out on a per day basis).

Under subsection 44-16(3) of the Act the Minister may determine, by legislative instrument, the amount of the basic daily fee supplement, or the way in which the amount of the supplement is to be worked out.  In parallel with the amendments made by these Amending Principles, the Minister has determined that the amount of the basic daily fee supplement is to be worked out by rounding down to the nearest cent an amount equal to 1% of the basic age pension amount (worked out on a per day basis).  This ensures that the amount of the basic daily fee supplement equals the reduction in the maximum daily amount of resident fees the approved provider may charge a resident for whom the approved provider receives the supplement.

The Note below section 21.25F states that an approved provider has a responsibility under paragraph 56-1(m) of the Act and section 23.14A of the User Rights Principles, to give an eligible care recipient, or his or her representative, information about the effect of section 21.25F on the amount of resident fees the eligible care recipient can be required to pay.

Item 3

Item 3 inserts a new section 21.32E specifying amounts taken to be excluded from determinations, under section 44-24 of the Act, of the ordinary incomes of care recipients receiving residential care.

The following amounts are specified:

• any amount of clean energy advance, clean energy supplement or quarterly clean energy supplement paid to the care recipient under the Social Security Act 1991;
• any amount of clean energy advance, clean energy supplement or quarterly clean energy supplement paid to the care recipient under the Veterans’ Entitlements Act 1986.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Residential Care Subsidy Amendment Principles 2012 (No.1)

This Legislative Instrument is compatible with the human rights and freedoms recognised
or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The purpose of the Residential Care Subsidy Amendment Principles 2012 (No.1) (the Amending Principles) is to provide for the basic daily fee Supplement and to specify the circumstances in which the supplement will apply.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

Mark Butler

Minister for Mental Health and Ageing