EXPLANATORY STATEMENT
Issued by the authority of the Minister for Health and Aged Care
Aged Care Act 1997
Subsidy Amendment (Viability Supplement) Principles 2016
Authority
The authority for the Subsidy Amendment (Viability Supplement) Principles 2016 (the Amending Principles) is section 96-1 of the Aged Care Act 1997 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901.
Purpose
The purpose of the Amending Principles is to amend the Subsidy Principles 2014 (Subsidy Principles) to give effect to the ‘Aged care provider funding – improving the targeting of the viability supplement for regional aged care facilities’ measure that was announced as part of Budget 2016-17.
Background
The viability supplement is a payment made under the Subsidy Principles to improve the capacity of small, rural aged care services to offer quality care to care recipients.
The Australian Government’s 2016-17 Budget provided for an extra $102.3 million over four years from 2016-17 to target the viability supplement more effectively to areas of greatest need by replacing the current out-dated remoteness classification system with the more up to date Modified Monash Model (MMM), with effect from 1 January 2017.
Details
The Amending Principles will amend the Subsidy Principles so that MMM will replace the Accessibility/ Remoteness Index of Australia (ARIA) and Rural, Remote and Metropolitan Areas (RRMA) in the viability supplement points calculator to determine eligibility for residential care subsidy and the eligibility requirements for the viability supplement in home care subsidy.
The MMM takes into account the size and isolation of a town based on 2011 Census data, in comparison to ARIA classification which relies on road distances from service centres and does not incorporate demographic factors of individual towns into its classification model. MMM was developed by the Department of Health to improve upon targeting in workforce shortages programmes such as the GP Rural Incentives Programme. The Review of Australian Government Health Workforce Programs April 2013 found that the strength of the MMM was that it provides an extra layer of discrimination between large and small inner and outer regional towns.
Documents Incorporated by Reference
This instrument incorporates documents by reference. In new section 4 (Note 1), subsection 66A(2)(b) (Note 1) and subsection (3) (Note): http://www.doctorconnect.gov.au is referenced as the website to access the MMM classification for a street address. This website hosts the Modified Monash Model locator which provides functionality for a street address to be typed into the locator, resulting in a MMM classification. For the purposes of the viability supplement points calculator in subsection 66A(3), this MMM classification will correlate with points listed in the 2017 scheme services – street addresses table. MMM classification is based on street address for residential care services in recognition that the care and services are undertaken at the premises of the residential care service. In section 4 (Note 2), http://www.health.gov.au is referenced as the website to access the MMM classification for home care subsidy. This website hosts the document Modified Monash Model Suburb and Locality Classification – Home Care Subsidy.
Differences in how the MMM methodology operates in residential care and home care takes into account that the meaning of home care in section 45-3 of the Act is “care consisting of a package of personal care services and other personal assistance provided to a person who is not being provided with residential care”. The distinction between residential care and home care based in the Act is that residential care is the provision of nursing care to a person in a residential facility in which the person is also provided with accommodation. On this basis, the MMM classification is in respect of the street address of the residential facility. As home care is not provided in a residential facility – there is flexibility in service provision, for example subsection 13(3) of the Quality of Care Principles 2014 allow for the use of telehealth and digital technology, such as remote monitoring. On this basis, the viability supplement in home care will be based on the classification of suburb and locality – where a care recipient receives home care - which is based on an average MMM score, representing the classification with the largest population within the suburb, based on 2011 Census population data. This approach accords with the current business practice of a home care provider supplying location details for a care recipient through the Part Two to Part Four of the Claim for Commonwealth Subsidy for Care Recipients receiving Home Care Packages authorised under Section 47-1 of the Aged Care Act 1997 form.
Consultation
Consultation occurred through the Aged Care Financing Authority’s report Financial Issues Affecting Rural and Remote Provider, which identified greater cost pressures in rural and remote areas and noted that the geographical classification system of the viability supplement in aged care was out-dated and may not be best targeting funding. There were a total of 36 submissions received. Submissions were received from a mix of providers, including not-for-profit, government organisations, regional alliances and peak representative groups.
To support the Budget announcement a fact sheet ‘Changes to the Viability Supplement’ was published on 4 May 2016 providing detail on the Budget measure. Provider peak bodies such as Aged and Community Services Australia, Catholic Health Australia and Leading Age Services Australia made public statements that the changes were welcome.
This Instrument commences on 1 January 2017. The Principles are a legislative instrument for the purposes of the Legislation Act 2003.
Regulation Impact Statement
The Office of Best Practice Regulation (OBPR) has advised that the amendment does not appear to have regulatory impacts on business, community organisations or individuals (OBPR 20306).
ATTACHMENT
Details of the Subsidy Amendment (Viability Supplement) Principles 2016
1 Name
Section 1 states that the name of the amending Instrument is Subsidy Amendment (Viability Supplement) Principles 2016.
2 Commencement
Section 2 states that these amendments commence on 1 January 2017.
3 Authority
This section provides the authority for making this instrument. This instrument is made under the Aged Care Act 1997.
4 Schedules
This section provides that each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other items in a Schedule to this instrument has effect according to its terms.
Schedule 1 Amendments
Item 1 - Section 4
This item inserts definitions for 2017 scheme service, domain, domain category, and Modified Monash Model classification and Modified Monash Model classification system.
2017 scheme service: is defined in section 66A.
domain: is defined in the Classification Principles 2014.
domain category: is defined as above.
Modified Monash Model classification:
(a) for a street address the classification is in accordance with the Modified Monash Model locator published on http://www.doctorconnect.gov.au
(b) for a suburb or locality the classification is in accordance with the document Modified Monash Model Suburb and Locality Classification – Home Care Subsidy to be published on http://www.health.gov.au by 1 January 2017 and available in the interim via email subsidiesandsupplements@health.gov.au.
Modified Monash Model classification system: means the Modified Monash Model geographical classification system developed by the Department of Health.
Item 2 - Subparagraph 63(b)(iii)
This item allows for a new paragraph to be created.
Item 3 - At the end of paragraph 63(b)
This item provides that the 2017 scheme service is eligible for the viability supplement.
Item 4 - Paragraph 64(1)(b)
This item amends paragraph 64(1)(b) to qualify that a 1997 scheme service will default to the 2017 scheme if it meets the requirements of the 2017 scheme.
Item 5 - Paragraph 65(1)(b)
This item amends paragraph 65(1)(b) to qualify that a 2001 scheme service will default to the 2017 scheme if it meets the requirements of the 2017 scheme.
Item 6 - Subsection 66(1)
This item substitutes a new subsection 66(1). New subsection 66(1) qualifies that a 2005 scheme service will default to the 2017 scheme if it meets the requirements of the 2017 scheme.
Item 7 - Subsection 66(2) (method statement, steps 2 and 3)
This item amends steps 2 and 3 of the 2005 scheme service points calculator in subsection 66(2). Specifically, it refers to the viability expansion component introduced in 2012, which increased the number of points attributable to a residential care service if the service catered to more than 50 per cent of care recipients (other than care recipients receiving respite care) classified at a classification level that denoted the care recipient had lower level care needs. This substitution to the subsection is a technical amendment and aligns the categorisation of classification to paragraph 7(6)(a)(i)-(iv) of the Quality of Care Principles 2014; and is being amended to give consistency of the classification for lower level care needs across the Aged Care Principles.
Item 8 - Subsection 66(2) (method statement, step 5)
This item amends step 5 of the 2005 scheme service points calculator in subsection 66(2). The intention of this amendment is to clarify that the number of points applicable to the service is in respect of its number of places that are occupied; in line with longstanding business practice.
Item 9 - Subsection 66(4)
This item amends subsection 66(4) to make a technical correction to clarify the operation of the viability supplement points calculator in relation to the viability expansion component introduced in 2012. This amendment will operate to clarify the number of points attributable to a residential care service that catered to more than 50 per cent of care recipients (other than care recipients receiving respite care) demonstrating complex behavioural needs and social disadvantage associated with their background as homeless persons or persons from an Aboriginal and Torres Strait Islander community.
Item 10 - 9 Subsection 66(5)
This item amends subsection 66(5) to clarify that the number of points applicable to the service is in respect of its number of places that are occupied.
Item 11 - Subsection 66(5) (table, headings)
This item also amends the table in subsection 66(5) to clarify that the number of points applicable to the service is in respect of its number of places that are occupied
Item 12 - At the end of Subdivision C of Division 5 of Part 3
This item inserts new section 66A. New section 66A will sets out what is necessary for a service to qualify under the 2017 scheme. Subsection (1) defines when a service meets the criteria to be a 2017 scheme. This will be when it meets the criteria of new subsections (2), (6), (7) or (8). New subsections (2)(a), (6) and (7) specify that a service that was a 1997 scheme service, 2001 scheme service or 2005 scheme service will qualify for the 2017 scheme if the amount of viability supplement payable is the same or greater than the amount payable under the earlier schemes.
Subsection 2 sets out the 2017 scheme service points calculator. The new scheme is similar to the 2005 scheme, but with some modifications. The fundamental difference relates to Step 1 of the points calculator which attributes points based on the MMM score applicable to the service in respect of its street address. The new table in subsection (2)(a) sets out the 2017 scheme service points calculator, which lists the criterion for a residential care service to qualify as a 2017 scheme service:
- Step 1 sets out points for MMM score which are listed in subsection (3).
- Step 2 sets out the method for adding points for service that cater to care recipients with lower care needs consistent with the criteria in subsection 66(2) Step 2 of the 2005 scheme service points calculator.
- Step 3 adds additional points for services that cater to homeless/Aboriginal and Torres Strait Islander care recipients with complex behavioural needs consistent with the criteria in subsection 66(4) of the 2005 scheme service points calculator.
- Step 4 sets out that the total of Step 1, Step 2 and Step 3 if more than 65 points is reduced to a total of 65 points consistent with subsection 66(2) Step 4 of the 2005 scheme service points calculator.
- Step 5 set out the number of points per occupied place with reference to subsection (3), consistent with Item 10 and 11 of this explanatory statement.
- Step 6 sets out the number of points for services catering to people with special needs consistent with 66(2) Step 6 of the 2005 scheme service points calculator.
Item 13 - Paragraph 70(a)
This item amends paragraph 70(a) to clarify that a residential care service can only meet the requirements for eligibility if more the 50 per cent of its care recipients meet the criteria listed in that paragraph.
Item 14 – Sections 98 and 99
This item inserts new section 98 and section 99. New section 98 connects the viability supplement to the empowering provision under paragraph 49-9(1)(b) of the Act. The numbering of this subsection takes into consideration changes to be made to this section through Item 44 of the Aged Care Legislation Amendment (Increasing Consumer Choice) Principles 2016 (Increasing Choice Amendment) on 27 February 2017. Item 43 of the Increasing Choice Amendment, which set out to make an administrative amendment to the numbering of this paragraph, will be made redundant.
New section 99 amends the eligibility requirements for viability supplement in home care. The value of the supplement payable will continue to be determined based on the remoteness of the location of the care recipient receiving home care. This item stipulates that the remoteness of the suburb or locality will be based on the MMM score. The terms suburb or locality are referred to explicitly to align with the longstanding business practice of calculating viability supplement payable, on the basis of a home care provider submitting location details (suburb and postcode) to the Department of Human Services through Part Two to Part Four of the Claim for Commonwealth Subsidy for Care Recipients receiving Home Care Packages authorised under Section 47-1 of the Aged Care Act 1997 form. The MMM classification for suburb and locality will be published on the Department of Health’s website.
New subsection 99(2) indicates that a home care service will continue to meet the eligibility requirements for viability supplement for those care recipients, eligible or ineligible under MMM arrangements, who were previously eligible for viability supplement on the basis that the location where the care recipient received home care attracted an ARIA value of 3.52 or greater. This ensures that a care recipient is at no disadvantage; and the grandparented rate will continue to be payable even if the care recipient transfers to a new home care service. However, subsection 99(3) will operate so that if a care recipient relocates resulting in a change to either the suburb or postcode where they receive home care, grandparenting provisions will no longer apply.
Matters relating to the payable rate of viability supplement is dealt with by the Aged Care (Subsidy, Fees and Payments) Amendment (Viability Supplement) Determination 2016.
Item 15 Schedule 2 (note to heading)
This item replaces the note under the heading to Schedule 2. The new note relates to the viability expansion component introduced in 2012, and links the 2017 scheme viability supplement points calculator for residential care subsidy to the Appraisal procedures for targeting care for homeless people or people from Aboriginal and Torres Strait Islander communities.
Item 16 Subclauses 1(5) and (6) of Schedule 2
This item amends subclauses 1(5) and (6) of Schedule 2. The amendments link the 2017 scheme viability supplement points calculator for residential care subsidy to the Appraisal procedures for targeting care for homeless people or people from Aboriginal and Torres Strait Islander communities.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2012
The Subsidy Amendment (Viability Supplement) Principles 2016 are 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 legislative instrument reflects the 2016–17 Budget measure to improve funding for aged care services in rural and remote areas by using a more modern methodology (the MMM) incorporating more up to date Census data for classifying providers in regional, rural and remote areas. The viability supplement rate will also increase for most remote residential care services.
The Subsidy Amendment (Viability Supplement) Principles 2016 amend the Subsidy Principles to replace the ARIA and RRMA geographical classification methodologies in the viability supplement points calculator to determine eligibility for residential care subsidy and the eligibility requirements for the viability supplement in home care subsidy.
Human rights implications
This legislative instrument is compatible with the right to an adequate standard of living and the right to the enjoyment of the highest attainable standard of physical and mental health as contained in article 11(1) and article 12(1) of the International Covenant on Economic, Social and Cultural Rights, and article 25 and article 28 of the Convention on the Rights of Persons with Disabilities.
This legislative instrument concerns the amount of subsidy payable to approved providers for the provision of care and services to people with a condition of frailty or disability who require assistance to achieve and maintain the highest attainable standard of physical and mental health. This legislative instrument will result in an increase to the viability supplement payable to some residential care and home care services.
Conclusion
This legislative instrument is compatible with the right to an adequate standard of living and the right to the enjoyment of the highest attainable standard of physical and mental health as contained in article 11(1) and article 12(1) of the International Covenant on Economic, Social and Cultural Rights, and article 25 and article 28 of the Convention on the Rights of Persons with Disabilities.
The Hon Sussan Ley
Minister for Aged Care