House of Representatives

Replacement Explanatory Memorandum

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

Schedule 2 - Ceasing residential care subsidy for pre-entry leave

Summary

This measure ceases the payment of residential care subsidy for care recipients during a period of leave taken before entering a residential care service. It also makes consequential amendments to fee and leave provisions.

Background

Under the Aged Care Act, providers are paid the residential care subsidy for the care they provide to care recipients. The residential care subsidy is also paid when care recipients are on leave, usually at a reduced rate.

To facilitate the entry of care recipients into residential care, a care recipient may take leave for up to seven days before entry (subsection 42-3(3)). This is referred to as 'pre-entry leave'. During this period, the residential care service reserves the care recipient's place, but the care recipient does not receive care.

The Government will no longer pay the residential care subsidy or supplements during this period.

The amendments made by this Schedule commence on 1 July 2015.

Explanation of the changes

Amendments to the Aged Care Act

Item 1 adds new subsection (4) to section 42-1 to remove an approved provider's eligibility for residential care subsidy for a care recipient who is on pre-entry leave from the residential care service.

Item 2 inserts new subsection (3AA) to section 42-2 to ensure the 52-day cap on leave will not include any leave that was taken as pre-entry leave. This ensures any pre-entry leave taken by a care recipient does not negatively impact their ability to be on other leave from the residential care service.

Item 3 amends subsection 42-3(3) to clarify when a period of pre-entry leave ends. This amendment provides clearer alignment with existing paragraph 42-3(1)(b).

Item 4 adds new subsection (4) to section 52C-3 to place an express limit on the maximum daily amount of resident fees that can be charged to a care recipient who is on pre-entry leave. New subsection 52C-3(4) ensures that care recipients who are on pre-entry leave can only be charged the standard resident contribution (as defined in section 52C-4).

Amendments to the Aged Care (Transitional Provisions) Act 1997

The Aged Care (Transitional Provisions) Act 1997 sets out the fees and payments payable by care recipients who were in care before 1 July 2014.

Items 6 to 11 make the necessary changes to that Act to cease eligibility for residential care subsidy for continuing care recipients on pre-entry leave on or after 1 July 2015 and to limit fees payable while on pre-entry leave to the standard resident contribution for days on or after 1 July 2015.

Items 5 and 12 are application provisions that set out how the removal of eligibility for residential care subsidy for pre-entry leave will operate. The application provisions confirm that the amendments provided by this Schedule only apply to days that occur on or after 1 July 2015. That is, an approved provider will continue to be eligible for residential care subsidy for a care recipient for days they are on pre-entry leave that occur before 1 July 2015, even if the care recipient is still on pre-entry leave on or after 1 July 2015.

Subitems 5(3) and 12(3) also ensure the changes made to the fees an approved provider can charge are only in relation to days on or after 1 July 2015.