EXPLANATORY STATEMENT
Issued by the authority of the Minister for Ageing
Aged Care Act 1997
User Rights Amendment Principles 2009 (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 (the User Rights Principles).
Some care recipients can agree to pay an accommodation charge, which accrues daily and is paid or payable to an approved provider, for the care recipient’s entry to a residential care service. Section 57A-6 of the Act allows for the maximum daily amount at which an accommodation charge may accrue to be an amount that is specified in, or worked out in accordance with, the User Rights Principles.
Section 23.81P of the User Rights Principles specifies 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.
User Rights Amendment Principles 2009 (No. 1)
The User Rights Amendment Principles 2009 (No.1) (the Amending Principles) amend section 23.81P of the User Rights Principles by replacing the previous subsections (5) to (8) with new subsections (5) to (8).
The new subsections (5) to (8) retain the caps on the maximum daily accommodation charge for care recipients who entered or re-entered care during the period from 20 March 2008 to 19 March 2009. In addition, the new subsections (5) to (8) specify the caps for care recipients who entered or re-entered care during the period from 20 March 2009 to 19 September 2009.
The new subsections (5), (6) and (8) specify different amounts for the maximum daily accommodation charge payable by certain care recipients for entry on or after 20 March 2009, compared to entry before 20 March 2009. The difference in the amounts specified is in accordance with normal indexation procedures and the policy agreed for the package of changes that commenced on 20 March 2008.
The daily amounts listed in new subsections 23.81P (5) and (8) are indexed in the normal way for the next six months by using the 6-month consumer price index inflator to December 2008.
The daily amount listed in subsection 23.81P (6) for the post-2008 pensioner is increased by a greater amount set by Government policy so that it will eventually catch up to the amount set for non-pensioners in subsection 23.81P (7), which has also been set by Government policy.
The Amending Principles are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Consultation
The Department of Health and Ageing (the Department) undertook extensive consultation on the policy, which included policy on increases in the maximum daily accommodation charge, that was implemented through the Aged Care Amendment (2008 Measures No. 1) Act 2008 and related amendments to the Principles and other instruments made under the Act.
Further consultation was undertaken by the Department on aged care funding arrangements as part of the Review of the Conditional Adjustment Payment and there is ongoing consultation with the aged care industry on funding arrangements.
As the indexation of the maximum daily amount of accommodation charge uses a well established formula based on the consumer price index published by the Australian Statistician, and the amounts specified are in accordance with policy upon which extensive consultation was undertaken, no specific consultation was undertaken with respect to the Amending Principles.
Information about the increase in the amount of the maximum daily accommodation charge will be sent to all approved providers by facsimile and will be available to the public on the Department’s website.
Overview
The User Rights Amendment Principles 2009 (No. 1) amends the Aged Care Act 1997, which provides for the funding of aged care services. The Act allows for the establishment of principles governing various aspects of the aged care system, including the accommodation charges that care recipients may pay to approved providers. The User Rights Principles 1997, made under the Act, specify these charges, including a cap on the maximum daily amount. The 2009 amendment updates these caps to reflect changes in policy and indexation, ensuring they remain aligned with the economic environment and government objectives. The amendment was enacted by the Minister for Ageing and follows extensive consultation with stakeholders, including the aged care industry, to ensure that the changes are fair and in line with broader policy goals. This legislative instrument is designed to maintain the integrity and sustainability of the aged care system by adjusting charges in a manner consistent with inflation and government policy.
Scope and Application
The Aged Care Act 1997 governs the funding of aged care services in Australia, applying to approved providers who offer residential aged care services and the care recipients they serve. The Act operates on a national level, with its provisions extending to all states and territories, ensuring a consistent framework for aged care funding and services across the country. The User Rights Amendment Principles 2009 (No. 1) amends the User Rights Principles 1997 by adjusting the caps on the maximum daily accommodation charge that care recipients may pay for their entry into residential care services, reflecting policy decisions and indexation procedures. These amendments apply specifically to care recipients who entered or re-entered care between 20 March 2008 and 19 September 2009, with the changes intended to align with broader government policies on aged care funding. The application of these Principles is facilitated through subordinate instruments under the Legislative Instruments Act 2003, ensuring that the legislative changes are implemented in a structured and transparent manner.
Key Provisions
The main operative sections of the User Rights Amendment Principles 2009 (No. 1) (the Amending Principles) pertain to the amendment of section 23.81P of the User Rights Principles 1997 (the User Rights Principles). Specifically, the Amending Principles replace subsections (5) to (8) of section 23.81P with new subsections (5) to (8). These changes apply to the maximum daily accommodation charge payable by care recipients who entered or re-entered care from 20 March 2009 to 19 September 2009. The new subsections specify different amounts for the maximum daily accommodation charge based on the date of entry into care, whether the care recipient is a pensioner, and whether the service meets certain building requirements. These amendments aim to reflect normal indexation procedures and policy changes that have been extensively consulted on.
The Amending Principles impose specific obligations on approved providers of residential aged care services. These obligations include adhering to the new caps on the maximum daily accommodation charge as specified in the amended section 23.81P. Approved providers must ensure that the charges they impose on care recipients comply with these new caps, particularly for those who entered or re-entered care during the specified periods. Furthermore, providers must update their billing systems to reflect the changes in accommodation charges as per the new subsections. These obligations are crucial for maintaining compliance with the Aged Care Act 1997 and the User Rights Principles.
The Aged Care Act 1997 imposes various civil and administrative penalties for breaches of its provisions, including the User Rights Principles. Approved providers who fail to comply with the new caps on the maximum daily accommodation charge may face consequences such as fines or other administrative sanctions. The specific penalties are not detailed in the explanatory statement but generally align with the regulatory framework established by the Aged Care Act 1997. Non-compliance could also lead to reputational damage and potential loss of eligibility to receive residential care subsidy payments. These consequences underscore the importance of adhering to the legislative requirements set out by the Amending Principles.