EXPLANATORY STATEMENT
Issued by the authority of the Minister for Ageing
Aged Care Act 1997
User Rights Amendment Principles 2008 (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 of the sets of Principles made under the Act is the User Rights Principles 1997 (User Rights Principles).
The purpose of the User Rights Amendment Principles 2008 (No.1) (the Amending Principles) is detailed below. The Amending Principles are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
User Rights Amendment Principles 2008 (No. 1)
The Aged Care Amendment (2008 Measures No. 1) Act 2008 amended the Act and related legislation to simplify, and make fairer, the fees and charges paid by residents of aged care facilities as well as the subsidies paid by the Commonwealth Government for residents who cannot fully meet their own care and accommodation costs.
One of the changes made to the Act (in order to give effect to the new system of fees and charges) was the creation of a new class of residents for which residential care subsidy is payable under Chapter 3 of the Act.
The new class of ‘supported residents’ joins the existing classes of residents known as ‘assisted residents’ and ‘concessional residents’.
As the result of the creation of this new class, consequential changes are required throughout the Act and are also required throughout the Aged Care Principles. The purpose of Items 1 to 4 of Schedule 1 to these Amending Principles is to amend references in the User Rights Principles to refer to this new class.
As part of simplifying and making fairer the fees and charges paid by residents, the Aged Care Amendment (2008 Measures No. 1) Act 2008 also made changes to the maximum daily accrual amount of the accommodation change. Items 5 to 7 of Schedule 1 to these Amending Principles make consequential changes to the maximum daily amount of accommodation charge payable by certain care recipients of residential aged care.
A minor change to the legislation to remove a redundant provision is made by Item 8 of Schedule 1 to these Amending Principles.
Consultation
The Department of Health and Ageing undertook extensive consultation on the policy that is implemented through the Aged Care Amendment (2008 Measures No. 1) Act 2008 which amends the Act. These Amending Principles flow from these amendments.
Details of the amendments to the Principles are listed at Attachment A.
ATTACHMENT A
NOTES ON CLAUSES
Clause 1 states that the name of the Amending Principles is the User Rights Amendment Principles 2008 (No. 1).
Clause 2 states that the Principles commence on 20 March 2008.
Clause 3 states that Schedule 1 amends the User Rights Principles 1997.
Schedule 1 Amendments
Items 1 and 2
These are consequential amendments that result from the creation of a new class of residents (supported residents) for which residential care subsidy is payable under Chapter 3 of the Act.
Section 23.28 (Information about accommodation bonds) requires the approved provider to tell the care recipient whether the residential care service or flexible care service charges an accommodation bond if the person is not a concessional resident.
There is no requirement for the approved provider to provide information about accommodation bonds to concessional residents. Concessional residents are ineligible to pay a bond as their assets are less than the minimum permissible asset value (see section 57-12 of the Act). This avoids the difficulty of the approved provider having to provide information about accommodation bonds to residents who will not pay an accommodation bond and avoids potential distress for these residents if they mistakenly believe, as a result of such information, that they are required to pay an accommodation bond.
As with concessional residents, supported residents whose assets are less than the minimum permissible asset value will not be required to pay an accommodation bond for entry into low care. There is also no need for the approved provider to provide information about accommodation bonds to these supported residents.
However, supported residents whose assets are greater than the minimum permissible asset value may be asked to pay an accommodation bond. It is important that these supported residents with higher assets are given information about accommodation bonds, as assisted residents are currently.
In summary, whether or not the approved provider should provide information about accommodation bonds in accordance with section 23.28 will depend on the individual circumstances of the care recipient. If a resident is ineligible to pay an accommodation bond, they will not need this information. By contrast, residents who may pay a bond should be provided with this information.
This amendment recognises the difficulty of clearly defining these groups of people and simply provides that the information should be provided to all residents ‘eligible to pay an accommodation bond’.
Items 3 and 4
These are consequential amendments that result from the creation of a new class of residents (supported residents) for which residential care subsidy is payable under Chapter 3 of the Act.
Section 23.81C (Information about accommodation charges) requires the approved provider to tell the care recipient whether the residential care service or flexible care service charges an accommodation charge if the person is not a concessional resident or a charge exempt resident.
For the reasons listed for Items 1 and 2, these amendments provide that information about accommodation charges should be provided to all residents ‘eligible to pay an accommodation charge’.
Items 5, 6 and 7
These are consequential amendments that result from the creation of a new class of residents (supported residents) for which residential care subsidy is payable under Chapter 3 of the Act, the introduction of sections 44-5C and 44-5D into the Act, and from the changes to the maximum daily accrual amount of the accommodation change.
Section 23.81P of the User Rights Principles specifies amounts for the maximum daily accommodation charge. In essence, this section places a cap on the maximum daily accommodation charge payable by certain groups of residents.
The amendments in these items place a cap on the maximum daily accommodation charge payable by groups of residents based on the date they first entered care, whether they entered or re-entered care on a later date, whether they are in receipt of an income support payment and whether the service through which they are receiving care meets the building requirements mentioned in section 21.11B of the Residential Care Subsidy Principles 1997.
The amendments in items 5 and 6 ensure that the current caps continue to apply to residents in care before 20 March 2008.
For residents who enter care after 20 March 2008, new arrangements are described.
Item 7 places caps on the maximum daily accommodation charge for post-2008 reform residents (as defined under section 44-5C of the Act) who entered or re‑entered care (following a break in service of more than 28 days) after 19 March 2008 but before 19 September 2008.
Subsection (5) places a cap on the maximum daily accommodation charge payable by residents who first entered care before 1 July 2004 but re-entered during the period from 20 March 2008 to 19 September 2008.
Subsections (6), (7) and (8) place caps on the maximum daily accommodation charge payable by these residents who first entered care after 30 June 2004.
Subsection (6) provides the cap on the maximum daily accommodation charge if that person receives an income support payment.
Subsections (7) and (8) provide caps on the maximum daily accommodation charge for people who do not receive an income support payment. The amount of the cap for a person will depend on whether the service that the person is receiving care through meets the building requirements mentioned in section 21.11B of the Residential Care Subsidy Principles 1997. If the service meets those building requirements (which relate to fire safety, privacy and space), the cap will be specified under subsection (7), and is a higher amount than the cap specified under subsection (8).
Item 8
This item removes a redundant section of the User Rights Principles, section 23.84A (Capped bond – amount to be taken into account). Currently, this section sets out amounts to be paid by certain residents. However, the effect of the section is that it commences applying pre-1999 and only applies for a maximum of 5 years from that time. As 5 years will have expired for all people to whom this section applied, the section is no longer needed.