Residential Care Subsidy Amendment Principles 2012 (No. 1)

Administered by Department of Health, Disability and Ageing

Legislation au F2012L01279 Not in force Legislative Instrument

Legislation content

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

 

Overview

The Residential Care Subsidy Amendment Principles 2012 (No. 1) were introduced to amend the Aged Care Act 1997, specifically targeting the Residential Care Subsidy Principles 1997, to implement the basic daily fee supplement as part of the Clean Energy Future Household Assistance package. Enacted by the Australian Parliament, these principles aim to assist low and middle-income households in managing the cost of living increases resulting from the introduction of a carbon price. This legislative instrument ensures that aged care residents who do not receive clean energy payments will not be disadvantaged by the increase in the maximum daily amount of resident fees permitted under the Act. By introducing the basic daily fee supplement, the Amending Principles provide an additional primary supplement, ensuring equitable treatment for all aged care residents. The Amending Principles also address the issue of clean energy payments not counting as income when determining a resident’s total assessable income under the Act for the purposes of the income test. This ensures that the financial assistance provided through the basic daily fee supplement does not adversely affect the eligibility of residents for other benefits. The principles were designed to be part of the broader Clean Energy Future Household Assistance Package, ensuring that the amendments were announced and implemented without requiring additional consultation specific to this instrument.

Scope and Application

The Residential Care Subsidy Amendment Principles 2012 (No. 1) are a legislative instrument made under the Aged Care Act 1997, which governs the funding of aged care services in Australia. These principles are specifically designed to implement the basic daily fee supplement as part of the Clean Energy Future Household Assistance Package. They apply to approved providers of residential aged care services who are eligible to receive residential care subsidy payments for the care they provide to approved care recipients. The principles are particularly relevant to care recipients who were in permanent residential care on 1 July 2012, were not eligible for an age pension or seniors supplement, and did not hold a Commonwealth Seniors Health Card on that date. The purpose of the supplement is to ensure that low and middle-income households do not face financial disadvantage due to increases in the cost of living from the introduction of a carbon price. The supplement is intended to be shared between the resident and the aged care provider, with the provider reducing the resident's fees by an equivalent amount. The Amending Principles also ensure that clean energy payments will not count as income for the purposes of the income test under the Aged Care Act. The principles have a national reach across Australia, as they are made under the Aged Care Act 1997, which is a Commonwealth Act. They commenced on 1 July 2012 and are subject to further determination by the Minister regarding the amount of the basic daily fee supplement. There are no specific exclusions mentioned in the principles themselves, but they do specify that the supplement will not apply to care recipients who are eligible for other clean energy payments. The Amending Principles do not specify any subordinate instruments to extend or restrict their application.

Key Provisions

The Residential Care Subsidy Amendment Principles 2012 (No. 1) amend the existing Residential Care Subsidy Principles under the Aged Care Act 1997, introducing a basic daily fee supplement aimed at supporting low and middle-income households with the increased cost of living due to the introduction of a carbon price. These amendments, effective from 1 July 2012, are part of the Clean Energy Future Household Assistance package. The basic daily fee supplement increases the maximum daily amount of resident fees permitted under the Act by 1% of the basic age pension amount, shared between the resident and the aged care provider. A notable aspect of these amendments is the provision for a basic daily fee supplement for a small number of aged care residents who do not qualify for clean energy payments, ensuring they are not disadvantaged by the fee increase. The supplement applies to eligible residents who were in permanent residential care on 1 July 2012, were not receiving an age pension, seniors supplement, or holding a Commonwealth Seniors Health Card on that date, and are charged no more than the maximum daily amount of resident fees minus the supplement amount. The Amending Principles impose several obligations on the parties involved. Approved providers of residential aged care services must ensure that they are eligible to receive the basic daily fee supplement by adhering to the criteria specified, including the requirement to charge no more than the maximum daily amount of resident fees minus the supplement amount. Additionally, approved providers are obligated to inform eligible care recipients or their representatives about the effect of the supplement on the amount of resident fees they can be required to pay. This obligation is stipulated under paragraph 56-1(m) of the Act and section 23.14A of the User Rights Principles. Furthermore, the amendments specify 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. Breaches of the provisions outlined in the Amending Principles do not explicitly state specific offences or penalties within the document. However, the general framework under the Aged Care Act 1997 and related legislation may impose penalties for non-compliance with care standards and financial regulations. Approved providers found to be in breach of the specified conditions for receiving the basic daily fee supplement could face sanctions, including financial penalties or the revocation of their approval to provide aged care services. These consequences align with the broader regulatory framework governing the provision of aged care services in Australia.

Legal classification tags

Area of Law
Aged Care Law
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Reporting & Disclosure Obligations
Regulatory Standards
Catchwords
Basic Daily Fee Supplement

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.