EXPLANATORY STATEMENT
Issued by the authority of the Minister for Social Services
Aged Care Act 1997
User Rights Amendment (September Indexation Measures) Principle 2013
The Aged Care Act 1997 (the Act) provides for the regulation and 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 User Rights Principles 1997 (the User Rights Principles).
The purpose of the User Rights Amendment (September Indexation Measures) Principle 2013 ‘the Amending Principle’ is to specify for the purposes of paragraph 57A-6 (1)(c) of the Act the maximum daily accrual amount of accommodation charge for specified types of post-2008 reform residents. The accommodation charge has been increased in accordance with previously announced Australian Government policy.
The maximum amount of accommodation charge is capped based on when a care recipient enters residential aged care. Until 2010, the maximum accommodation charge was different for residents receiving an income support payment and self-funded retirees. The maximum amount of accommodation charge for pensioners and self-funded retirees entering care from 20 March 2010 onwards, became the same in most cases.
The exceptions to this general rule are people who first entered care before 1 July 2004 (whose maximum accommodation charge is lower) and people who are receiving care through a service that does not meets certain building requirements (whose maximum accommodation charge is also lower). While the maximum amount of accommodation charge payable by existing residents remains the same while they are in care, the maximum accommodation charge for new residents is adjusted twice per year (on 20 March and 20 September) in accordance with Australian Government policy.
The purpose of the amendments to subsections 23.81P(5) – (8) is to increase the maximum amount of accommodation charge for residents entering care on or after 20 September 2013, in accordance with previously announced Australian Government policy.
Consultation
Routine indexation of the accommodation charge uses a well-established formula based on the consumer price index (CPI) as a measure of the movements in the non-labour costs of providers. As this is in accordance with policy upon which extensive consultation was undertaken, no specific consultation was undertaken with respect to this indexation.
Information about the increase in the amounts of accommodation charge will be disseminated via electronic media to approved providers.
The Amending Principle commences on 20 September 2013.
The Amending Principle is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Overview
The User Rights Amendment (September Indexation Measures) Principle 2013, issued under the Aged Care Act 1997, was enacted to adjust the maximum daily accrual amount of accommodation charge for specified types of post-2008 reform residents in alignment with previously announced Australian Government policy. This principle is intended to ensure that the accommodation charge for new residents entering care on or after 20 September 2013 is increased in accordance with routine indexation measures based on the consumer price index (CPI). The principle applies to residential aged care services provided by approved providers and aims to maintain the financial sustainability of the aged care system while ensuring that the accommodation charges reflect the current economic conditions. This legislative instrument, issued by the Minister for Social Services, serves to provide clarity and predictability in the funding and regulation of aged care services within Australia.
Scope and Application
The User Rights Amendment (September Indexation Measures) Principle 2013 applies to approved providers of residential aged care services under the Aged Care Act 1997, who are eligible to receive residential care subsidy payments for the care they provide to approved care recipients. This principle is specifically designed to address the maximum daily accrual amount of accommodation charges for specified types of post-2008 reform residents. The accommodation charge is adjusted in accordance with Australian Government policy and is indexed routinely using the consumer price index (CPI) to reflect changes in non-labour costs of providers. Notably, the maximum amount of accommodation charge varies based on the date of entry into residential aged care, with distinctions made for residents entering care before 1 July 2004 and those in services that do not meet certain building requirements. The principle also specifies the cap on the maximum accommodation charge for new residents, which is adjusted twice per year in line with policy announcements. This legislative instrument is a part of the broader regulatory framework established by the Aged Care Act 1997 and is effective from 20 September 2013.
Key Provisions
The main operative sections of the User Rights Amendment (September Indexation Measures) Principle 2013 (the Amending Principle) include the provisions under section 96-1 of the Aged Care Act 1997, which allow the Minister to make Principles to specify various matters required or permitted by the Act. The Amending Principle specifically addresses the maximum daily accrual amount of accommodation charge for specified types of post-2008 reform residents, aligning with the Australian Government’s policy on indexation. This principle modifies the amounts of the accommodation charge for new residents entering care on or after 20 September 2013, as outlined in subsections 23.81P(5) – (8) of the Act. The accommodation charge, which is a component of the cost borne by residents for their residential aged care, is adjusted twice annually—on 20 March and 20 September—to reflect changes in the consumer price index (CPI).
The Amending Principle imposes specific obligations on the parties involved. Approved providers of residential aged care services must ensure they are aware of and comply with the updated maximum accommodation charge amounts as specified by the Principle. They are required to inform their residents of these updated charges and ensure they are charged accordingly. The Principle also obligates the Minister for Social Services to disseminate information about these changes to the approved providers through electronic media. The principle is designed to ensure transparency and consistency in the application of accommodation charges, thereby maintaining fairness and predictability for both providers and residents.
Breach of the provisions set out in the Amending Principle may result in various consequences. While the explanatory statement does not detail specific offences or penalties associated with non-compliance, it is reasonable to infer that failure to adhere to the updated accommodation charge amounts could lead to regulatory scrutiny or enforcement actions by the relevant authorities. Non-compliance may potentially lead to financial penalties or other corrective measures aimed at ensuring adherence to the legislated requirements. However, the precise nature and extent of such consequences would depend on the specific provisions of the Aged Care Act 1997 and any related regulations or guidelines.