House of Representatives

Replacement Explanatory Memorandum

(Circulated by the authority of the Minister for Social Services, the Hon Scott Morrison MP)

Outline

Streamlined income management

Schedule 1 to the Bill will amend the social security law to streamline the current income management programme under a two-year continuation.

Income management and the BasicsCard will continue for two additional years to maintain support for existing income management participants. The streamlining amendments made by this Bill will enable more effective operation of the income management programme.

In particular, the Bill provides for the abolition of certain incentive payments relating to income management, amends the operation of the vulnerable measure of income management, and makes minor streamlining amendments to remove ambiguities and improve the programme's effectiveness.

Aged care measures

Schedules 2 and 3 to the Bill make amendments to reflect two measures relating to aged care, which were included in the 2014-15 Mid-Year Economic and Fiscal Outlook announcement.

The first measure is to cease payment, from 1 July 2015, of the residential care subsidy to residential aged care providers for holding a place for up to seven days prior to a care recipient entering care. This will ensure the subsidy is appropriately targeted to those actually receiving care. This subsidy is currently paid to providers at a reduced rate of 30 per cent of the full residential care subsidy that will be payable once the care recipient enters care. The provider will not be able to recoup any lost residential care subsidy from the care recipient, but will still be able to charge the care recipient the standard resident contribution for the pre-entry period.

The second measure is to abolish the Aged Care Planning Advisory Committees as part of the Smaller Government initiative. The Smaller Government reforms are reducing the size and complexity of government by eliminating duplication and waste, streamlining services and reducing the cost of government administration. The Aged Care Planning Advisory Committees' role was to provide advice in relation to the distribution of aged care places. However, the last of these committees expired in September 2014. These amendments repeal the now-redundant relevant provisions in the Aged Care Act 1997.

Financial impact statement

Statements of compatibility with human rights

The statements of compatibility with human rights appear at the end of this explanatory memorandum.