AGED CARE AMENDMENT (2008 MEASURES NO. 1) BILL 2008 Explanatory Memorandum

Commonwealth of Australia Explanatory Memoranda

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AGED CARE AMENDMENT (2008 MEASURES NO. 1) BILL 2008

2008 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES AGED CARE AMENDMENT (2008 MEASURES NO. 1) BILL 2008 EXPLANATORY MEMORANDUM (Circulated by authority of the Hon Justine Elliot, MP, Minister for Ageing)

AGED CARE AMENDMENT BILL (2008 MEASURES NO. 1) BILL 2008 OUTLINE The purpose of the Aged Care Amendment (2008 Measures No. 1) Bill 2008 (the Bill) is to amend the Aged Care Act 1997 (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. Fees and charges - the new arrangements better target both the assets test (that determines the level of accommodation fees required from residents) and the aged care income test. For example, currently, self-funded retirees pay higher income-tested fees than pensioners with the same total income. This is because nearly all of the income of self-funded retirees is counted under the income test, while pension income is not. This disadvantages self- funded retirees. The new income test treats all people in the same way, and all income the same, irrespective of whether it is a pension or private income. Supplements - the new arrangements will combine, and better target, the current concessional resident supplement and pensioner supplement into a single asset-tested accommodation supplement. The maximum level of the new accommodation supplement will also be increased (through delegated legislation). Self-funded retiree residents with few assets will become eligible for accommodation assistance from the Commonwealth Government. · broaden eligibility for community care grants for providers of Community Aged Care Packages, and extend eligibility to providers of the flexible care types Extended Aged Care at Home and Extended Aged Care at Home - Dementia. · extend the application of aged care legislation to include the Territory of Christmas Island and the Territory or Cocos (Keeling) Islands. · improve consistency and clarity, address unintended consequences of the operation of the legislation, and streamline the administration of the legislation. These minor, technical changes complement the changes described above. It is proposed that the new arrangements will take effect from 20 March 2008. In addition to the amendments required to the Act, amendments will also be made to the Aged Care Principles and determinations under the Act (both delegated legislation). 1

FINANCIAL IMPACT STATEMENT The financial impact to the Commonwealth Government is detailed in the following table: 2006-07 2007-08 2008-09 2009-10 2010-11 Total ($'000) ($'000) ($'000) ($'000) ($'000) ($'000) Grants 0 353 731 693 906 2,683 Capital Funding 103 25,727 98,966 132,410 136,936 394,142 Income-tested Fees 132 10,552 26,181 26,530 26,377 89,772 By way of further explanation: · the grants measure includes broadening eligibility for community care grants for providers of Community Aged Care Packages, and extending eligibility to providers of the flexible care types Extended Aged Care at Home and Extended Aged Care at Home - Dementia. This Bill implements changes to enable grants to be paid to providers of flexible care services. The financial impact described in the above table represents the additional funding allocated to the community care grants program; · the capital funding measure relates to certain new and increased accommodation subsidies. The key policy rationale for increasing the accommodation subsidies (and fees in high care) is ensuring adequate revenue to the sector to support continued growth in investment in capital, particularly in high care facilities; and · the income-tested fees measure relates to the changes to income-tested care fees and shows the impact of these changes on government outlays. 2

AGED CARE AMENDMENT BILL (2008 MEASURES NO. 1) BILL 2008 NOTES ON CLAUSES Clause 1 Short title This clause provides that this Act may be cited as the Aged Care Amendment (2008 Measures No. 1) Act 2008. Clause 2 Commencement This clause provides that each provision of the Act specified in column 1 of the table, commences in accordance with column 2 of the table. Clauses 1 to 3 of this Bill commence on Royal Assent. The amendments to the Aged Care Act 1997 (as described in Schedule 1) generally commence on 20 March 2008. The only exception to this is the amendment in item 13 of Schedule 1. As this item amends a provision of the Act that has itself been recently amended, this item takes effect at the same time as the amended provision takes effect, that is, the day that item 16 of Schedule 1 to the Aged Care Amendment (Residential Care) Act 2007 commences, which is on Proclamation or within 12 months of Royal Assent (28 June 2007). The amendments to the Aged Care (Bond Security) Act 2006 (as described in Schedule 2) and the amendments to the Aged Care (Bond Security) Levy Act 2006 (described in Schedule 3) take effect on 20 March 2008. Clause 3 Schedule(s) This clause provides that each Act that is specified in a Schedule to this Act is amended or repealed as set out in the relevant Schedule. Any other item operates according to its terms. SCHEDULE 1--AGED CARE ACT 1997 Part 1--Amendments Item 1 Currently, section 3-6 of the Act is a diagram that sets out the basic structure of the Act. This item adds a reference in the diagram to a new Part being inserted as a result of amendments in this Bill. This new Part is `Part 5.2A Flexible care grants' under Chapter 5 - Grants. Items 2 and 3 Subsection 4-1(1) declares that the Act applies in all States and Territories, while subsection 4-1(2) adds that it does not apply in any external Territory. Item 2 alters the latter subsection to ensure that the Act applies in the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands. Item 3 inserts a new subsection (3) stating that, despite subsection (1), Parts 2.2 (Allocation of places), 2.5 (Extra service places) and 3.1 (Residential care subsidies) of the Act apply in relation to the Territory of Christmas Island and the Territory of 3

Cocos (Keeling) Islands as if those Territories were part of Western Australia and were not Territories. This has the effect that references in Parts 2.2, 2.5 and 3.1 to a Territory do not apply to the Territory of Christmas Island or the Territory of Cocos (Keeling) Islands, and that references in those Parts to a State will be relevant to Western Australia as if it included those Territories. Item 4 This item adds to the second note in section 5-2 that allocation of funding for flexible care grants is dealt with in the new Part 5.2A, and not in this Chapter. This is a consequential amendment that results from the inclusion of a new Part in the Act dealing with flexible care grants. Item 5 Subsection 12-5(1) currently lists the groups of people for which the Secretary may determine (in relation to the allocation of places in respect of each subsidy type) the proportion of care that must be provided. Paragraph (b) refers to concessional residents and assisted residents - this item adds `supported residents' to that paragraph. This change is a consequential change that results from the creation of a new class of residents (supported residents) for which residential care subsidy is payable under Chapter 3 of the Act. More information about the new concept of `supported residents' is included at item 26 in relation to the new sections 44-5A and 44-5B. Item 6 The current subparagraph 12-5(3)(d)(ii) provides that the proportion of people receiving aged care who are likely to be concessional residents or assisted residents is an example of the matters with which the criteria specified in the Allocation Principles may deal. This item adds a third class of resident, supported residents, to this group. This is a consequential change that results from the creation of a new class of residents (supported residents) for which residential care subsidy is payable under Chapter 3 of the Act (refer item 26). Item 7 Currently, subsection 12-6(1) allows the Secretary to determine, in respect of each type of subsidy, the regions within each State and Territory. This item adds a new subsection (1A), ensuring that if the Secretary determines the regions within Western Australia, he or she must determine that one of those regions consists of the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands. Item 8 Under the existing section 13-2, if places have been distributed to a region, the Secretary may invite applications for allocations of those places. Subparagraph 13-2(3)(e)(ii) states that the invitation must specify the proportion of care, in respect of the places, that must be provided to concessional residents and assisted residents. This item adds a third class of resident, supported residents, to this group. 4

This is a consequential change that results from the creation of a new class of residents (supported residents) for which residential care subsidy is payable under Chapter 3 of the Act (refer item 26). Item 9 This item amends subparagraph 14-5(4)(a)(ii) to insert a reference to the new class of `supported residents'. The effect of this change is minor. It simply means that examples of the matters with which conditions of allocations may deal include the proportion of care to be provided to concessional residents, assisted residents and supported residents. This is a consequential change that results from the creation of a new class of residents (supported residents) for which residential care subsidy is payable under Chapter 3 of the Act (refer item 26). Item 10 Section 15-4 of the Act provides for the variation or revocation of provisional allocations. The current subsection 15-4(4) provides that the Secretary must consider any submissions when deciding whether to vary or revoke the provisional allocation. This item amends the subsection to also require the Secretary to consider any matters specified in the Allocation Principles. This brings the section into line with other sections of the Act that enable the Secretary to consider additional matters detailed in the Allocation Principles. Item 11 Section 15-5 enables the variation of provisional allocations on application by an approved provider. This item amends this section to insert a new subsection (subsection 15-5(7)). The new subsection provides that, in deciding whether to vary the provisional allocation, the Secretary must have regard to any matters specified in the Allocation Principles. This brings the section into line with other sections of the Act that enable the Secretary to consider additional matters detailed in the Allocation Principles. Item 12 Currently, if the Secretary approves a transfer of places, he/she must notify the transferor and the transferee, and the notice must specify the proportion of care, in respect of the places to be transferred, to be provided to concessional residents and assisted residents. This item adds a third class of resident, supported residents, to this group. This is a consequential change that results from the creation of a new class of residents (supported residents) for which residential care subsidy is payable under Chapter 3 of the Act (refer item 26). Item 13 Most sections of the Act that allow the Secretary to extend the time for people to give further information specify a period of 28 days. 5

Those few sections that specify 14 days are being changed to 28 days for consistency. Subsections 25-4D(1) and (2) previously allowed 14 days for the provision of further information to the Secretary with regard to applications for lifting the suspension of an approved provider from making appraisals. This item extends this period to 28 days. Section 25-4D has been inserted in the Act through the Aged Care Amendment (Residential Care) Act 2007. This new section (and the amendment detailed in this item) will not take effect until the Aged Care Amendment (Residential Care) Act 2007 commences, which will be on Proclamation or 12 months after Royal Assent (28 June 2007). Item 14 Subsections 32-3(3) and (4) previously allowed 14 days for applicants to give information in response to a request from the Secretary in relation to an application for extra service status. This item extends this period to 28 days. This improves consistency within the Act. Item 15 Section 32-4 provides that the Secretary must not grant an application for extra service status unless certain criteria are met. One of these criteria is that granting the extra service status sought would not unreasonably reduce access to residential care by people who are concessional residents living in the State, Territory or region concerned. This item amends this section so that the Secretary must not only consider the impact on access by concessional residents, but also on residents who are supported or assisted residents. This is a consequential amendment associated with the inclusion of the new category of `supported residents' (refer item 26). The opportunity has also been taken to address a shortcoming in the provision whereby `assisted' residents were previously not mentioned. Item 16 Section 37-1 describes Part 2.6 - Certification of residential care services. This item amends the section to provide that an approved provider can only receive accommodation supplements if the residential care service has been certified under this Part. This is a consequential change that results from the creation of the new accommodation supplement, which is explained in more detail in new section 44-5A (refer item 26). The accommodation supplement will only be payable in respect of residential care services that are certified. This is consistent with the current approach to the payment of concessional supplements. 6

Item 17 Paragraph 38-5(1)(b) currently allows 14 days for applicants to provide further information to the Secretary in relation to applications for certification of a residential care service. This item amends the provision to allow 28 days. This improves consistency within the Act. Items 18 to 20, 23, 24, 27, 32, 34, 35, 41 to 45, 47 to 50, 52, 54 to 57, 66, 78, 79, 81, 82, 84 to 86, 88 to 91, 93, 94, 96, 98 to 101, 103 and 158 - Amendments to the Act relating to legislative instruments Since the commencement of the Legislative Instruments Act 2003, legislation has been drafted so as to clearly state whether an instrument (for example, a determination or a written notice) is a legislative instrument. Legislative instruments are subject to disallowance by both Houses of Parliament and are registered on the Federal Register of Legislative Instruments. As existing Acts are amended, the opportunity is being taken to align the existing legislation with the requirements of the Legislative Instruments Act 2003, and to state whether various instruments are legislative or not. The Aged Care Act 1997 contains a very wide range of instruments including, for example, Principles, determinations made by the Minister or the Secretary, and various written notices. This Bill contains a number of amendments to Chapter 3 of the Act which itself contains numerous references to determinations and written instruments. The opportunity is being taken to amend all relevant sections in this Chapter to clarify whether the instruments are legislative or not. While it would be desirable to amend all references to such instruments to clarify whether they are legislative or not, this is a significant drafting task given the hundreds of references to such instruments in the Act. At this time, the focus is therefore on Chapter 3. It is however intended that other sections will be amended as various Chapters of the Act are amended over time. In order to distinguish between those instruments in Chapter 3 that are and are not legislative instruments, the following general rules have been applied: · those instruments that are expressed to apply generally, or to a class of people, are legislative instruments. An example is a determination made by the Minister regarding the amount or value of a particular supplement; and · those instruments that are in relation to specified care recipients or approved providers are not legislative. An example is a determination as to whether an individual's circumstances warrant payment of a hardship supplement. In this case a note is included in the Act to assist readers and to clarify that the instrument is not legislative in accordance with the Legislative Instruments Act 2003. 7

In some sections of Chapter 3, references are made to written notices or agreements and no statement has been included as to whether the instrument is legislative or not. In these cases, no statement is required because of the operation of the Legislative Instruments Act 2003 and its Regulations. In particular, an express statement as to the nature of the instrument is not required for those instruments detailed in Schedule 1 to the Legislative Instruments Regulations 2004. Such instruments are not legislative instruments and no statement to this effect is required in the Act. Relevant categories of such instruments (in the context of the Aged Care Act 1997) include, for example: · instruments of delegation; · an instrument of authorisation (that is, an instrument the effect of which is to authorise a specified individual to take a particular action or act in a particular way) or an application for such an instrument; · an instrument prescribing or approving a form; · an instrument requesting or requiring a person to give information; · a notice of a decision or proposed decision, a notice of reasons for a decision or proposed decision, a notice of rights of review; or · an agreement, contract or undertaking authorised to be made or given under legislation, or an instrument made under such an agreement, contract or undertaking. Each of the amendments relating to legislative instruments has been considered by officials within relevant areas of the Attorney-General's Department who have confirmed the characterisation of the instruments. Each of the items that amend the Act to clarify whether an instrument is legislative is explained in sequence below. Item 18 Section 42-5 allows the Secretary, in exceptional circumstances, to determine that a residential care service is taken to meet its accreditation requirement. This item adds a subsection (4A) stating that this determination is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. Items 19 and 20 Section 42-8 requires the Secretary to notify an approved provider in writing if that provider has claimed, in respect of a person, residential care subsidy for which the provider is not eligible. These items add a subsection (2) stating that this notice is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. 8

Item 21 This item inserts a new section (section 43-4A). Section 43-4A Variations of claims for residential care subsidy This section enables an approved provider to vary a claim made in respect of a payment period within 2 years after the end of the payment period, or such longer period as is determined by the Secretary. In determining a longer period, the Secretary must be satisfied that a variation is required due to an administrative error made by the Commonwealth or an agent of the Commonwealth, or because the care recipient's circumstances are different from those on the basis of which the subsidy was claimed. The determination of the period is reviewable under Part 6.1 of the Act. It is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. It is important to note that while this provision limits the capacity for approved providers to vary a claim for subsidy beyond 2 years (except in the limited circumstances described), it does not prevent the Commonwealth from recovering an overpayment (under Part 6.5) or adjusting a determination to enable the variation of a payment in relation to a care recipient. Item 22 Paragraph 43-8(1)(a) currently states that non-compliance deductions may apply if conditions relating to the proportion of care to be provided to concessional residents and assisted residents have not been met. This item adds a third class of resident, supported residents, to this group. This is a consequential amendment that results from the creation of the new class of supported residents (see item 26). Item 23 Subsection 43-8(3) requires the Secretary to notify an approved provider if, in respect of a payment period, non-compliance deductions apply. This item adds a new subsection (3A) stating that such a notice is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. Item 24 Currently, subsection 44-3(2) states that the basic subsidy amount for a day is the amount determined by the Minister in writing. This item amends the subsection to make it clear that such a determination by the Minister is a legislative instrument for the purposes of the Legislative Instruments Act 2003. Item 25 The existing section 44-5 lists the primary supplements payable in relation to care recipients. This item adds the accommodation supplement (see new section 44-5A). 9

Item 26 This item inserts the following new sections. Section 44-5A The accommodation supplement From 20 March 2008 providers will receive up to $26.88 per day in accommodation payments for all new residents entering high care (excluding extra service places), either as a Commonwealth Government payment or a resident contribution, or a mixture of the two on a sliding scale, depending on the value of the new resident's assets. The maximum accommodation payment from the Commonwealth Government for those new residents least able to pay for themselves will increase to $26.88 per day on 20 March 2008. The new maximum payment applies to all new residents entering high or low care (except those in extra service) who have less than $34,500 (estimated) in assets. The payment will be reduced for those with more assets, with no accommodation supplement being payable for those with more than $90,411 (estimated) in assets. This will replace a number of existing accommodation supplements paid for pensioners, including those currently paid for people with low assets. This section describes the new accommodation supplement and the circumstances in which it is payable. In summary, an accommodation supplement will be paid to approved providers (in respect of care recipients) provided that: · the care recipient was provided with residential care (other than respite care) through the residential care service in question for each day for which a supplement is claimed; and · the care recipient was eligible for an accommodation supplement. A care recipient is eligible if: the care recipient's classification level is not the lowest applicable classification level; the care recipient is a supported resident (this concept is defined in new section 44-5A); the residential care service is certified; and the residential care provided to the care recipient is not provided on an extra service basis. The accommodation supplement for a particular day is the amount determined by the Minister by legislative instrument, or worked out in accordance with a method determined by the Minister by legislative instrument. The Minister may determine different amounts (including nil amounts) or methods based on the value of assets held by a care recipient (or other matters specified in the Residential Care Subsidy Principles). Arrangements for existing residents, that is residents who fall within the definition of pre-2008 reform residents, will be preserved. The concessional resident supplement, assisted resident supplement and pensioner supplement will continue to be payable in 10

respect of pre-2008 reform residents. There will be no change to the eligibility criteria for the charge exempt resident supplement. Section 44-5B Meaning of supported resident Section 44-5B defines a new class of residents, supported residents, who will be eligible for the new accommodation supplement provided that they meet all of the eligibility criteria described in new section 44-5A (above). A person is a supported resident if: · the person is being provided with residential care (other than respite care) through a residential care service; · the person is a post-2008 reform resident (this concept is described in new section 44-5C); and · the person's assets are below a certain level. A threshold amount will be determined by the Secretary by legislative instrument. On 20 March 2008 this threshold will be set at $90,411 (estimated). If this amount is equal to or more than the value of the person's assets at the time the person entered the residential care service (or such other time specified in the Residential Care Subsidy Principles) then the person will meet the assets test. Hence the person will be eligible for the Commonwealth Government support through the accommodation supplement (provided that the person also meets the other criteria detailed above and in the new section 44-5A). The effect of this is that the new accommodation supplement will not be restricted to pensioners, unlike the current supplements. It will also be paid for new self-funded retiree residents with few assets at the same rate as for new pensioner residents with the same assets. A person will also be a supported resident if they are suffering hardship and a determination is in force under section 57-14 or 57A-9 in respect of the person (and they are also a post-2008 reform resident). Some supported residents may be required to pay an accommodation bond (section 57-12) or an accommodation charge (section 57A-6). This will depend on the level of assets of the care recipient. People with assets below a minimum asset threshold will not be required to pay an accommodation bond or charge. Section 44-5C Meaning of post-2008 reform resident This section provides that a person is a post-2008 reform resident if the person is being provided with residential care through a residential care service and the person is not a pre-2008 reform resident. A `pre-2008 reform resident' is defined in new section 44-5D. In general, pre-2008 reform residents are people who have entered an aged care service before 20 March 2008. Some of these will be concessional and assisted residents. Such people will continue to be concessional and assisted residents after 20 March 2008 and will therefore continue to be eligible for existing supplements. By contrast, residents who enter care on or after 20 March 2008 (or are otherwise defined as post-2008 reform residents) will be `supported residents' provided they 11

meet the criteria (including the assets test). Supported residents will be eligible for the new accommodation supplement rather than the current concessional resident supplement. Section 44-5D Meaning of pre-2008 reform resident This section defines `pre-2008 reform resident'. In essence, a person will be a pre-2008 reform resident (and therefore will potentially be eligible for existing supplements rather than the new accommodation supplement) if: · the person entered a residential care service before 20 March 2008 or was on pre-entry leave immediately before 20 March 2008; and · the person has not had a break in residential care of more than 28 days ending on or after 20 March 2008. For the purposes of this section, residential care does not include respite care. A `break in residential care' for a person is the period: · beginning on the day on which a person ceases to be provided with residential care through a residential care service (other than because the person is on leave from the residential care service); and · ending on the day on which the person enters, or begins pre-entry leave, with the next residential care service through which residential care is provided, or taken to be provided, to the person. Section 44-5E Meaning of pre-entry leave This section provides that a care recipient is on pre-entry leave from a residential care service if the care recipient is on leave under section 42-2 because of subsection 42-3(3). In summary, subsection 42-3(3) provides that a care recipient can be on leave for up to 7 days before they actually enter the residential care service but after the care recipient has been notified that there is a vacancy in the care service (or after the care recipient has accepted such a place). Item 27 Currently, subsection 44-6(4) states that the concessional resident supplement for a particular day is the amount determined by the Minister in writing. This item amends the subsection to make it clear that a determination by the Minister is a legislative instrument for the purposes of the Legislative Instruments Act 2003. Item 28 This item repeals subsection 44-7(1A) and replaces it with a new subsection that provides that a person is a concessional resident if: · the person is being provided with residential care (other than respite care) through a residential care service; and · the applicable time under subsection (2) is on or after 1 July 2005; and · the person is a pre-2008 reform resident; and · there is in force a determination covered by subsection (1B) or (1C). The effect of this change is to limit concessional residents to pre-2008 reform residents. This is because those residents who enter care on or after 20 March 2008 (or otherwise meet the definition of post-2008 reform resident), and have few assets, will be supported residents (and entitled to the new accommodation supplement) 12

rather than concessional residents (entitled to the concessional resident supplement under the existing system). Item 29 Currently, subsection 44-7(3) provides that, if there is financial hardship, a person is also a concessional resident if a determination is in force under section 57-14 or section 57A-9 in respect of that person. This item limits the operation of this provision to pre-2008 reform residents. Anyone who is a post-2008 reform resident who is suffering hardship will be classified as a supported resident (refer new section 44-5B). Item 30 Currently, subsection 44-8(1A) provides that a person is an assisted resident if: · the person is being provided with residential care (other than respite care) through a residential care service; · the applicable time under subsection (2) is on or after 1 July 2005; and · a determination covered by subsection (1B) or (1C) is in force. This item adds another requirement to this list - that the person is a pre-2008 reform resident. The general effect of this is that people who enter care on or after 20 March 2008 will not be able to become assisted residents but will instead be supported residents. In general, those who entered care before 20 March 2008 (and who have not had a break in care of more than 28 days ending on or after 20 March 2008) will continue to be assisted residents. Item 31 Subsections 44-7(1A) and 44-8(1A) provide that a person is a concessional or assisted resident if, among other things, there is a determination in force under section 44-8AA. A section 44-8AA determination is one that enables the Secretary to determine the resident status of a person (i.e. assisted, concessional or, in the future, supported). Currently subsection 44-8AA(4) requires that, if the determination is made after the person enters the relevant residential care service, the date that the determination comes into effect must not be before the date that the determination is made, unless the Secretary is satisfied of exceptional circumstances. Item 31 repeals this subsection. This refects the reality that many determinations are made after a person enters care yet take effect from the time they enter care. Given how often this occurs, it is no longer considered that exceptional circumstances should be required to be made out to enable this to occur. This limitation is therefore being removed. Item 32 Subsection 44-8AA(1) enables the Secretary to make a resident status determination. Item 32 adds a new subsection 44-8AA(8) stating that this determination is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. 13

Items 33 and 34 Subsection 44-8AB(1) requires the Secretary to determine the value of a person's assets. To the note that follows, item 33 adds that this determination may affect whether the person is a supported resident under section 44-5B. Item 34 inserts a new subsection 44-8AB(6) stating that the determination is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. Item 35 Currently, subsection 44-8A(3) states that the charge exempt resident supplement for a particular day is $12.17 or such other amount as determined by the Minister in writing. This item amends the subsection to make it clear that such a determination by the Minister is a legislative instrument for the purposes of the Legislative Instruments Act 2003. Items 36 and 37 The existing subsection 44-8A(4) lists the matters on which the Minister may base his or her determination of the charge exempt resident supplement. These items add two new matters: · the maximum rate of accommodation supplement; and · if the care recipient is a supported resident - the amount of the accommodation supplement that is payable in respect of the care recipient on a particular day. These amendments are consequential to the inclusion in the Act of the new accommodation supplement and the concept of supported resident. Items 38 and 39 Section 44-9 currently states that a person is not to be taken to be a concessional resident or an assisted resident if sufficient asset information has not been provided to the Secretary to enable an assets determination to be made. These items add that neither should the person be taken to be a supported resident in such circumstances. These amendments are consequential to the inclusion in the Act of the new accommodation supplement and the concept of supported resident. Item 40 Section 44-10 describes how to work out the value of a person's assets for the purposes of deciding whether they are an assisted or a concessional resident. The amendments made by this item also enable section 44-10 to be used to decide whether the person is a supported resident and the amount (or method for determining the amount) of the accommodation supplement. Subsection (1) is altered to ensure that, subject to section 44-10, the value of a person's assets for the purposes of section 44-5A (The accommodation supplement) and 44-5B (Meaning of supported resident) is to be worked out in accordance with the Residential Care Subsidy Principles. 14

The heading to section 44-11 is also altered by inserting `supported residents,' before `concessional residents'. Item 41 Section 44-10 describes how to work out the value of a person's assets. Subsections (1A), (1B) and (1C) allow the Secretary to make certain determinations when working out this value. This item inserts a new subsection (5) that states that these determinations are not legislative instruments. This provision is included to assist readers, as the instruments are not legislative instruments within the meaning of section 5 of the Legislative Instruments Act 2003. Item 42 Currently, subsection 44-12(3) states that the respite supplement for a particular day is the amount determined by the Minister in writing. This item amends the subsection to make it clear that such a determination by the Minister is a legislative instrument for the purposes of the Legislative Instruments Act 2003. Item 43 Subsection 44-13(2) allows the Secretary to determine that a care recipient is eligible for an oxygen supplement. This item inserts a new subsection (2A) that states that such a determination is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. Items 44 and 45 Subsection 44-13(6) currently quantifies the oxygen supplement for a particular day in terms of an amount, or a method used to calculate an amount, as determined by the Minister in writing. These items amend the subsection to make it clear that such determinations by the Minister are legislative instruments for the purposes of the Legislative Instruments Act 2003. Items 46 and 47 Subsection 44-13(6) currently quantifies the oxygen supplement for a particular day in terms of an amount, or a method used to calculate an amount, as determined by the Minister. Item 46 clarifies that subsection 44-13(7) allows the Minister to determine different methods, as well as amounts, based on any matters determined by the Minister. Currently, these matters have to be determined by the Minister in writing. Item 47 replaces `in writing' with `by legislative instrument' to make it clear that such determinations are legislative instruments for the purposes of the Legislative Instruments Act 2003. 15

Item 48 Subsection 44-14(2) allows the Secretary to determine that a care recipient is eligible for an enteral feeding supplement. This item inserts a new subsection (2A) that states that such a determination is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. Items 49 and 50 Subsection 44-14(6) currently quantifies the enteral feeding supplement for a particular day in terms of an amount, or a method used to calculate an amount, as determined by the Minister in writing. These items amend the subsection to make it clear that such determinations by the Minister are legislative instruments for the purposes of the Legislative Instruments Act 2003. Items 51 and 52 Subsection 44-14(6) currently quantifies the enteral feeding supplement for a particular day in terms of an amount, or a method used to calculate an amount, as determined by the Minister. Item 51 clarifies that subsection 44-14(7) allows the Minister to determine different methods, as well as amounts, based on any matters determined by the Minister. Currently, these matters have to be determined by the Minister in writing. Item 52 replaces `in writing' with `by legislative instrument'. This ensures that the determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003. Item 53 Paragraph 44-15(1)(b) currently allows 14 days for further information to be provided to the Secretary with regard to applications for the eligibility of a care recipient for an oxygen supplement or an enteral feeding supplement. As most sections of the Act that describe the timeframe for provision of further information to the Secretary specify a period of 28 days, those sections that specify 14 days are being changed to 28 days for consistency. This item therefore amends the provision to extend the period for provision of information from 14 to 28 days. Item 54 Currently, subsection 44-16(3) states that the Minister may determine in writing, in respect of any additional primary supplement, the amount of the supplement, or the way in which the amount of the supplement is to be worked out. This item amends the subsection to provide that such a determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003. Item 55 Paragraph 44-19(1)(b) provides that, in order to be subject to the adjusted subsidy reduction, the residential care service through which the care is provided must be determined by the Minister in writing to be an adjusted subsidy residential care service. 16

This item adds a new subsection 44-19(1A) stating that the above determination is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. Item 56 Currently, subsection 44-19(2) states that the adjusted subsidy reduction for a particular day is the amount determined by the Minister in writing. Subsection (3) states that the Minister may determine different amounts based on any matters determined by the Minister in writing. This item amends both subsections to clarify that such written determinations by the Minister are legislative instruments for the purposes of the Legislative Instruments Act 2003. Item 57 Section 44-20 concerns the calculation of the compensation payment reduction. In order to work out if a particular day is covered by a compensation entitlement, it is required to determine the part of compensation that relates, or is treated under subsections (5) and (6) as relating, to future costs of providing residential care. This item inserts a new subsection (7A) that states that a determination under subsection (5) or (6) is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. Items 58 to 74 - Amendments to Subdivision 44-E Under current arrangements, care recipients may pay a residential aged care service a standard resident contribution, an accommodation payment and an income-tested care fee. Subdivision 44-E concerns the aged care income test which determines the amount by which the Commonwealth Government's residential care subsidy is reduced, based on the amount of the care recipient's income-tested fee. The current income-tested fee paid by a care recipient is 25 per cent of the care recipient's ordinary income in excess of the care recipient's ordinary income free area (currently $132 per fortnight for a single person). The combination of the income-tested fee plus the standard resident contribution is capped at an amount equal to 3 times the standard resident contribution for a pensioner. In practice this means that the maximum income-tested fee for self-funded retirees is 150 per cent of the basic age pension. The amount of the care recipient's income-tested fee, and therefore the reduction in the Commonwealth Government payment, is capped by the value of the basic subsidy and primary supplements payable in respect of their care. The current aged care income test treats income derived from a Commonwealth Government income support payment (`pension income') differently to all other income (`ordinary income'). The amendments to this subdivision change the income test to treat all income (pension income and ordinary income) equally. It applies to 17

the total assessable income of a care recipient (the sum of pension and ordinary income). The new income test removes the complexity and potential inequity inherent in the current arrangements by determining the level of the income-tested fee for all care recipients by the formula that currently implicitly applies to pensioners. Under the new arrangements, the amount of the income-tested fee (and hence the subsidy reduction) for a care recipient will be equal to 5/12 of the care recipient's `total assessable income' above the `total assessable income free area'. The total assessable income free area is equal to the maximum total income for a full pensioner, currently $675 per fortnight (indexed). For a pensioner, this has exactly the same result as calculating 25 per cent of the pensioner's ordinary income in excess of the ordinary income free area. The maximum income-tested fee, which currently differs for means tested pensioners, non-means tested (blind) pensioners and self-funded retirees, is simplified to a single cap of 150 per cent of the single basic age pension (which equates to the current cap for self-funded retirees). A care recipient's income-tested fee will still be capped by the value of the Commonwealth Government basic subsidy and primary supplements payable in respect of their care. Items 58-74 amend relevant provisions of the Act to achieve this outcome. Each of the items is explained in more detail below. Items 58 to 63 In line with the change in the income test from ordinary income to total assessable income, these items replace all references to `ordinary income' with `total assessable income', and all references to `ordinary income free area' with `total assessable income free area' within section 44-21. Item 64 Item 64 replaces the figure of 25 per cent with 5/12 within step 4 of the income-tested reduction calculator in subsection 44-21(3). This change is necessitated by the move from ordinary income to total assessable income. For a care recipient whose level of income support payment is determined by the pension income test, 5/12 of the care recipient's total assessable income in excess of the total assessable income free area will always be equal to 25 per cent of the care recipient's ordinary income in excess of the ordinary income free area. That is, the two calculations will always yield the same result. For a care recipient whose level of income support payment is determined by the pension assets test, 5/12 of the care recipient's total assessable income in excess of the total assessable income free area will always be no greater than 25 per cent of the care recipient's ordinary income in excess of the ordinary income free area. That is the income-tested fee (and therefore the Government subsidy reduction) for such a care recipient under the new arrangements will always be no greater, and will often be 18

lower, than the income-tested fee for that care recipient under the current arrangements. For a care recipient who is not in receipt of an income support payment and whose income is less than or equal to the maximum income for a part-pensioner, 5/12 of the care recipient's total assessable income in excess of the total assessable income free area will always be no greater than 25 per cent of the care recipient's ordinary income in excess of the ordinary income free area. That is, the income-tested fee (and the Government subsidy reduction) for such a care recipient under the new arrangements will always be no greater, and will often be lower, than the income-tested fee for that care recipient under the current arrangements. For a care recipient who is not in receipt of an income support payment and whose income is greater than the maximum income for a part-pensioner, 5/12 of the care recipient's total assessable income in excess of the total assessable income free area will always be higher than 25 per cent of the care recipient's ordinary income in excess of the ordinary income free area. That is, the income-tested fee (and therefore the Government subsidy reduction) for such a care recipient under the new arrangements may be greater than the income-tested fee for that care recipient under the current arrangements. However, the income-tested fee will not always be greater as it will still be subject to the cap detailed below in item 65, or by the value of the Government basic subsidy and primary supplements payable in respect of their care. This provision in new subsection 44-24(5) (refer item 72) will allow the income-tested fee for the small number of existing care recipients who would be required to pay a higher fee under the new arrangements to be calculated under the existing arrangements. This ensures that no existing residents will pay more under the new arrangements. Item 65 This item caps the income-tested reduction for a care recipient to 150 per cent of the basic age pension. This is equivalent to the current cap on the income-tested fee for residents who are not in receipt of an income support payment. It is theoretically a lower cap for care recipients who are in receipt of an income support payment. However, care recipients in receipt of a means tested income support payment would not have enough income to reach this cap. Item 66 Subsection 44-22(2) currently allows the Secretary to determine that the daily income-tested reduction in respect of a care recipient is to be taken as zero. This item inserts a new subsection (7) stating that this determination is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. Items 67 to 70 Section 44-23 sets out the effect on the daily income-tested reduction of a failure to give the Secretary requested information. Items 68 to 70 replace all references to 19

`ordinary income' with `total assessable income', in line with the change in the income test from ordinary income to total assessable income. In addition, section 44-24 on ordinary income is being replaced by a similar section on total assessable income (see item 72). In so doing, the subsection numbers are changing. Hence item 67 replaces a reference to subsection 44-24(5) on requested information with the new subsection 44-24(8). Item 71 Section 44-23 sets out the effect on the daily income-tested reduction of a failure to give the Secretary requested information. Currently subsection 44-23(4) defines the daily income-tested reduction in respect of a care recipient as the lesser of: · the amount worked out by subtracting the care recipient's standard resident contribution from an amount equal to 3 times the standard pensioner contribution; and · the amount worked out in respect of the payment period using steps 1, 2 and 3 of the residential care subsidy calculator in section 44-2 (worked out on a per day basis). This item replaces the first amount with the amount equal to 150 per cent of the basic age pension amount for that day (worked out on a per day basis). Item 72 This item repeals section 44-24 and replaces it with new section 44-24, in line with the change in the income test from ordinary income to total assessable income. 44-24 The care recipient's total assessable income If the care recipient is not entitled to an income support payment, his or her total assessable income is the amount the Secretary determines to be the amount that would be worked out as the care recipient's ordinary income for the purpose of applying Module E of Pension Rate Calculator A at the end of section 1064 of the Social Security Act 1991. If the care recipient is entitled to a service pension, his or her total assessable income is the sum of: · the amount of the care recipient's service pension; and · the amount the Secretary determines to be the amount that would be worked out as the care recipient's ordinary/adjusted income for the purpose of applying Module E of the Rate Calculator in Schedule 6 to the Veterans' Entitlements Act 1986. If the care recipient is entitled to an income support supplement, his or her total assessable income is the sum of: · the amount of the care recipient's income support supplement; and · the amount the Secretary determines to be the amount that would be worked out as the care recipient's ordinary income for the purpose of applying Module E of the Rate Calculator in Schedule 6 to the Veterans' Entitlements Act 1986. 20

If the care recipient is entitled to an income support payment (other than an income support supplement or a service pension), his or her total assessable income is the sum of: · the amount of the care recipient's income support payment; and · the amount the Secretary determines to be the amount that would be worked out as the care recipient's ordinary/adjusted income for the purpose of applying Module E of Pension Rate Calculator A at the end of section 1064 of the Social Security Act 1991. With regard to all four of the above determinations: · they are not legislative instruments (this provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003); · they take effect on the day specified by the Secretary, which may be earlier than the day on which the determination is made; and · the Secretary must notify, in writing, the care recipient of any determination. The notice must include such matters as are specified in the Residential Care Subsidy Principles. The Secretary can also delegate functions related to the above determinations to the Secretary of the Department administered by the Minister who administers the Social Security Act 1991 and to the Repatriation Committee (see subsection 96-2(3)). The Secretary may, by notice in writing, request one or more of the following to give, within the time specified in the notice, such information as is specified in the notice for the purposes of making the determination: · the care recipient; · a person acting for or on behalf of the care recipient; · any other person whom the Secretary believes has information that would assist the Secretary in making the determination. A person is not obliged to provide the information. The Residential Care Subsidy Principles may specify amounts that are to be taken, in relation to specified kinds of care recipients, to be excluded from the determinations (see subsection 44-24(5)). This provision will allow the income-tested fee for the small number of existing care recipients who would be required to pay a higher fee under the new arrangements to be calculated under the existing arrangements. This ensures that no existing residents will pay more under the new arrangements. The provision also ensures that income such as foreign pensions and periodic compensation payments are included in the calculation of `total assessable income'. It does this by providing that the provisions in the social security and veterans' entitlements legislation, which exclude these types of income from the calculation of ordinary/adjusted income, should not apply for the purposes of the aged care legislation. For example, the effect of paragraph 8(8)(zc) and section 1176 of the Social Security Act 1991 is to exclude foreign pensions and periodic compensation payments from the calculation. Similarly, under the Veterans' Entitlements Act 1986, section 59X excludes periodic compensation payments (there is no equivalent provision relating to foreign pensions). 21

By providing that these provisions will not apply, the effect is to ensure that all relevant income is included in `total assessable income' for the purposes of the aged care legislation. Flexibility has been provided by allowing the Residential Care Subsidy Principles to specify other provisions of those Acts which should not apply. These Principles are legislative instruments and subject to Parliamentary scrutiny. Item 73 This item repeals section 44-25, which sets out the reduction to ordinary income in the case of war widows and widowers. This section is no longer necessary as the income test now applies to a care recipient's total assessable income rather than their ordinary income. Item 74 In line with the change in the income test from ordinary income, this item repeals section 44-26, which sets out the calculation for the care recipient's ordinary income free area, and replaces it with a new section 44-26 which sets out the calculation for the care recipient's total assessable income free area. The provision, which refers back to rate calculators in the Social Security Act 1991, essentially means that the total assessable income free area for the care recipient is the sum of: · the maximum amount of the basic age pension; · the maximum amount of the pension supplement; · the maximum amount of the pharmaceutical allowance; and · the ordinary income free area. Note that this amount is equal to the maximum income that a means tested pensioner can receive and still be in receipt of a full pension. Item 75 This item repeals subsection 44-28(2) and replaces it with a new subsection that provides that, subject to subsections (3), (5) and (6), a care recipient is eligible for a pensioner supplement on a particular day if: · the care recipient is a pre-2008 reform resident; and · if the day falls before 20 March 2008--on that particular day any of the following apply to the care recipient: the care recipient was receiving an income support payment; the care recipient had a dependent child; the care recipient was provided with respite care; the care recipient was included in a class of people specified in the Residential Care Subsidy Principles; and · if the day falls on or after 20 March 2008--on that particular day any of the following apply to the care recipient: the care recipient was receiving an income support payment; the care recipient had a dependent child; the care recipient was included in a class of people specified in the Residential Care Subsidy Principles. 22

This differs from the current subsection in two ways: · it will only apply to pre-2008 reform residents; and · on or after 20 March 2008 it will not apply to respite care. From 20 March 2008 the pensioner supplement is rolled into the accommodation payment (a combination of the accommodation charge, if any, and the accommodation supplement) for new permanent residents. For respite residents, the pensioner supplement is rolled into an increased respite supplement. Items 76 and 77 Currently, in order to calculate a care recipient's ordinary income under section 44-24, the Secretary may request information. Subsections 44-28(5) and (6) set out the days that the care recipient is not eligible for a pensioner supplement if the care recipient fails to, or elects not to, give that information. For both of these subsections these items replace references to `ordinary income' with `total assessable income'. Item 78 Currently, subsection 44-28(7) provides that the pensioner supplement for a particular day is the amount determined by the Minister in writing. Subsection 44-28(8) provides that the Minister may determine different amounts based on any matters determined by the Minister in writing. This item replaces `in writing' with `by legislative instrument' in both subsections. This clarifies that the determinations under this subsection are legislative instruments for the purposes of the Legislative Instruments Act 2003. Item 79 Subsection 44-29(2) allows the Secretary to make a determination in respect of a residential care service with regard to viability supplements. This item inserts a provision which states that the determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003. Item 80 Paragraph 44-29(5)(b) currently allows 14 days for further information to be provided to the Secretary (on request of the Secretary) with regard to applications for the viability supplement for a residential care service. As most sections of the Act that allow the Secretary to extend the time for people to give further information specify a period of 28 days, this section is being amended by this item to also allow 28 days. Items 81 and 82 Subsection 44-29(8) currently quantifies the viability supplement for a particular day in terms of an amount, or a method used to calculate an amount, as determined by the Minister in writing. These items replace `in writing' with `by legislative instrument'. This means that the determinations will be legislative instruments for the purposes of the Legislative Instruments Act 2003. Items 83 and 84 Section 44-29 quantifies the viability supplement in terms of an amount, or a method used to calculate an amount, as determined by the Minister in writing. Item 83 clarifies that subsection 44-29(9) allows the Minister to determine different methods, as well as amounts, based on any matters determined by the Minister in writing. 23

Paragraph 44-29(9)(e) currently allows the Minister to determine different amounts based upon any other matters determined by the Minister in writing. Item 84 amends the provision to provide that the determinations by the Minister are legislative instruments for the purposes of the Legislative Instruments Act 2003. Items 85 and 86 Subsection 44-30(5) currently quantifies the hardship supplement for a particular day in terms of an amount, or a method used to calculate an amount, as determined by the Minister in writing. These items amend the subsection to provide that such a determination by the Minister is a legislative instrument for the purposes of the Legislative Instruments Act 2003. Items 87 and 88 Section 44-30 quantifies the hardship supplement in terms of an amount, or a method used to calculate an amount, as determined by the Minister in writing. Item 87 clarifies that subsection 44-30(6) allows the Minister to determine different methods, as well as amounts, based on any matters determined by the Minister. Currently, the matters determined by the Minister in subsection 44-30(6) must be in writing. Item 88 amends the subsection to provide that such a determination by the Minister is a legislative instrument for the purposes of the Legislative Instruments Act 2003. Item 89 Subsection 44-31(1) allows the Secretary to determine that the care recipient is eligible for a hardship supplement. This item inserts a new subsection (9) stating that this determination is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. Items 90 and 91 Section 46-4 requires the Secretary to write to the approved provider where the provider has claimed, in respect of a person, community care subsidy for which they are not eligible. These items insert a new subsection (2) stating that this notice is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. Item 92 This item inserts a new section 47-4A. 24

Section 47-4A Variations of claims for community care subsidy This section enables an approved provider to vary a claim made in respect of a payment period within 2 years after the end of that payment period or such longer period as is determined by the Secretary. In determining a longer period, the Secretary must be satisfied that a variation is required due to an administrative error made by the Commonwealth or an agent of the Commonwealth, or because the circumstances of a care recipient are different from those on the basis of which subsidy was claimed. Determinations of longer periods are reviewable under Part 6.1 of the Act, but are not legislative instruments. The reference to the instrument not being a legislative instrument has been included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. While this provision limits the capacity for approved providers to vary a claim for subsidy beyond 2 years (except in the limited circumstances described), it does not prevent the Commonwealth from recovering an overpayment (under Part 6.5) or adjusting a determination to enable the variation of a payment in relation to a care recipient. Items 93 and 94 Currently, subsection 48-1(3) provides that the amount of community care subsidy that is payable in respect of a day is the amount determined by the Minister in writing, or worked out in accordance with a method determined by the Minister in writing. These items replace both instances of `in writing' with `by legislative instrument'. The effect is to ensure that both types of determinations are legislative instruments for the purposes of the Legislative Instruments Act 2003. Items 95 and 96 Section 48-1 quantifies the community care subsidy in terms of an amount, or a method used to calculate an amount, as determined by the Minister in writing. These items clarify that subsection 48-1(4) allows the Minister to determine different methods, as well as amounts, based on any matters determined by the Minister by legislative instrument. Item 97 Section 50-2 states that the Flexible Care Subsidy Principles may specify kinds of care for which the subsidy is payable. The note lists examples of the kinds of care that might be specified, one of which is the care provided in small or rural communities. This item adds remote communities to this example. This is consistent with the changes to the legislation which extend its operation to Christmas Island and Cocos (Keeling) Islands. Items 98 and 99 Section 50-4 requires the Secretary to write to the approved provider where the provider has claimed, in respect of a person, flexible care subsidy for which they are not eligible. 25

These items insert a new subsection (2) stating that this notice is not a legislative instrument. This provision is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. Items 100 to 103 Section 52-1 quantifies the flexible care subsidy in terms of an amount, or a method used to calculate an amount, as determined by the Minister in writing. Items 100 and 101 replace both instances of `in writing' with `by legislative instrument'. Item 102 clarifies that subsection 52-1(2) allows the Minister to determine different methods, as well as amounts, based on any matters determined by the Minister. Currently, this subsection requires the matters determined by the Minister to be in writing. Item 103 replaces this requirement with a requirement that the determination be made by legislative instrument. Item 104 This item repeals the note at paragraph 57-2(1)(aa), and replaces it with a note which provides that if a care recipient's assets at the time of the care recipient's entry to the residential care service or flexible care service are less than the care recipient's minimum permissible asset value (as defined in subsection 57-12(3)), the care recipient cannot be required to pay an accommodation bond. This is as the result of the operation of section 57-12. The current wording refers only to care recipients who are concessional residents. This note has therefore been amended to reflect the changes to the legislation relating to supported residents, and so that the note is applicable not just to concessional residents but to any resident who has assets that are less than the care recipient's minimum permissible asset value. Item 105 With regard to the maximum amount for an accommodation bond, subsection 57-12(4) currently works out the value of a care recipient's assets in the same way as section 44-10, for the purposes of section 44-7 (Meaning of concessional resident) or 44-8 (Meaning of assisted resident) of the Act. To this list of sections, this item adds the new section 44-5B (Meaning of supported resident). Item 106 Currently, the note at paragraph 57A-2(1)(a) states that concessional residents cannot be required to pay an accommodation charge. This item replaces it with a note that provides that if a care recipient's assets at the time of the care recipient's entry to the residential care service are less than the care recipient's minimum permissible asset value (as defined in subsection 57-12(3)), the care recipient cannot be required to pay an accommodation charge - see section 57A-6. The change in the note reflects the changes to the legislation relating to supported residents. The new note makes it clear that if a care recipient's assets are less than the minimum permissible asset value then they cannot be required to pay an 26

accommodation charge regardless of whether they are concessional or supported residents. Item 107 Section 57A-6 sets out the maximum daily accrual amount of the accommodation charge. This item amends the section such that the maximum daily amount at which an accommodation charge accrues is subject to the new section 57A-8A (refer item 111), as well as the current subsection 57A-6(2). Item 108 This item clarifies that, when calculating the maximum daily amount at which an accommodation charge accrues, the amount referred to in paragraph 57A-6(1)(b) is rounded down to the nearest cent. Item 109 When calculating the maximum daily amount at which an accommodation charge accrues, currently the amount calculated in subparagraph 57A-6(1)(b)(i) is divided by 1,825. This item changes the figure to 2,080. This is due to a policy change which lowers the accommodation charge for residents with lower levels of assets by reducing the proportion of a resident's assets on which an accommodation charge is calculated from 20 per cent to 17.5 per cent. Item 110 In calculating the maximum daily amount of the accommodation charge under subsection 57A-6(3), the value of a care recipient's assets is worked out in the same way as in section 44-10, for the purposes of section 44-7 (Meaning of concessional resident) or 44-8 (Meaning of assisted resident). To this list of sections, this item adds the new section 44-5B (Meaning of supported resident). Item 111 This item inserts a new section 57A-8A. Section 57A-8A Maximum amount of accommodation charge if care recipient moves between aged care services This section provides that, on or after 20 March 2008, if a care recipient moves between services (within 28 days), the maximum accommodation charge will not change. The maximum accommodation charge payable by the care recipient at the new aged care service will be the charge that was paid at the previous aged care service. Section 57A-8A describes in detail the circumstances in which the maximum charge will be capped in this way. In summary, the section applies if: · an accommodation charge has been paid (or is payable) by a care recipient for entry to a residential aged care service; and · the care recipient ceases being provided with residential care through that service (other than because the care recipient is on leave) on or after 20 March 2008; and 27

· the care recipient enters another residential aged care service within 28 days of leaving the previous service. If these circumstances exist, the maximum daily amount at which the accommodation charge accrues for the entry of the care recipient to the second service is the maximum daily amount of accommodation charge that accrued under section 57A-6 for entry of the care recipient to the prior service. Items 112 to 118 - Amendments in relation to standard resident contributions As is currently the case, from 20 March 2008, aged care providers will be able to ask all residents to pay a basic daily fee (referred to in the legislation as a standard resident contribution). This is a contribution towards accommodation costs and living expenses, such as meals, cleaning, laundry, heating and cooling. The level of a resident's standard resident contribution is negotiated between the resident and/or their representative, and the aged care provider. However, the Government sets the maximum level of the standard resident contribution. The proposed amendments simplify the arrangements for post-2008 reform residents and ensure that all such residents are subject to the same maximum standard resident contribution. The maximum standard resident contribution for all permanent residents who are post-2008 reform residents (essentially those people who enter a residential care service on or after 20 March 2008) will be 85 per cent of the annual single basic age pension. It is estimated that this maximum will be $32.08 per day in March 2008. This is simpler than the current arrangements whereby the maximum standard resident contribution for a resident also depends on whether or not they are a pensioner and, in some cases, on other factors. Pre-2008 reform residents (i.e. permanent residents in a residential aged care service on 19 March 2008 (including residents on leave)) will continue to be subject to the current rules governing the standard resident contribution. The method of determining the maximum standard resident contribution for existing residents will stay the same. It is proposed that the maximum levels of the standard resident contribution will be indexed on 20 March and 20 September each year in line with movements in the basic age pension. This will be achieved through delegated legislation. As is currently the case, providers will be able to increase the standard resident contribution paid by a resident during their episode of care as the maximum levels of the standard resident contribution increase. Each of the amendments to the Act that achieve the result described above is detailed below. 28

Item 112 Section 58-2 sets out a `resident fee calculator'. Step 1 calls for the standard resident contribution for the care recipient to be worked out using section 58-3 or 58-4 (whichever is applicable). Section 58-3 (as amended) applies to pre-2008 reform residents who are not receiving income support payments, and section 58-4 applies to pre-2008 reform residents who are receiving income support payments. To this list of sections, this item adds the new section 58-4A, which describes the standard resident contribution for post-2008 reform residents. This means that the same calculator (in section 58-2) can be used for both pre- and post-2008 reform residents. Items 113 and 114 Currently, section 58-3 sets out the standard resident contribution for care recipients who are not receiving income support payments. These items limit the class of care recipients to which this section applies to pre-2008 reform residents. Care recipients who are post-2008 reform residents are considered under the new section 58-4A. Items 115 to 117 Currently section 58-4 sets out the standard resident contribution for care recipients who are receiving income support payments. Items 115 and 116 limit the class of care recipients to which this section applies to pre-2008 reform residents. Care recipients who are post-2008 reform residents are considered under the new section 58-4A. Subsection 58-4(3) refers to paragraph (2)(a). Due to the changes made to subsection (2) by the above items, item 117 appropriately alters this reference to the new paragraph (2)(d). Item 118 This item inserts a new section setting out the standard resident contribution for post-2008 reform residents. Section 58-4A Standard resident contribution--post-2008 reform residents This section provides that the standard resident contribution for a care recipient who is a post-2008 reform resident is the amount obtained by rounding down to the nearest cent an amount equal to 85 per cent of the basic age pension amount (worked out on a per day basis). This item ensures that all post-2008 reform residents will be subject to the same maximum standard resident contribution (also known as the basic daily care fee). This is simpler than the current arrangements whereby the maximum for a resident also depends on whether or not they are a pensioner and, in some cases, on other factors. Item 119 This item inserts a new section 63-1B. 29

Section 63-1B Responsibility relating to recording entry of new residents Currently, approved providers lodge `Resident Entry Records' with the Department of Health and Ageing in relation to care recipients. These records tell the Department important information about care recipients who have entered residential care services, and the records also assist in the proper payment of supplements to approved providers. This section makes this current practice mandatory, and also enables the Secretary to specify a time period within which such records must be provided. The section provides that it is the responsibility of an approved provider to notify the Secretary of each care recipient who enters (other than for respite care), on or after 20 March 2008, a residential care service operated by the approved provider. The notification must be made in the form approved by the Secretary and within the period specified in the Accountability Principles. Item 120 Subsections 68-5(1) and (2) currently allow 14 days for the provision of further information to the Secretary with regard to applications for the lifting of a sanction imposed on an approved provider. This item extends the time period to 28 days. This ensures consistency across like provisions in the Act. Item 121 Section 69-1 lists the grants that the Commonwealth makes to contribute to costs associated with the establishment or enhancement of aged care services. This item adds flexible care grants made under the new Part 5.2A to this list (refer item 130). Item 122 Subsections 71-3(1) and (2) currently allow 14 days for the provision of further information to the Secretary with regard to applications for the allocation of residential care grants. This item extends this period to 28 days. This ensures consistency across like provisions in the Act. Item 123 This item adds an asterisk to the term `places' in paragraph 72-1(4)(b) to indicate that this term is defined in the dictionary in Schedule 1 of the Act. Item 124 This item repeals section 72-2 and replaces it with a new section 72-2. Section 72-2 Criteria for allocations This section provides that the criteria for the allocation of a residential care grant are: · that a majority of the care recipients who receive, or who will receive, the care to which the grant relates are either or both of the following: supported residents, concessional residents or assisted residents; people with special needs or people of a kind specified in the Residential Care Grant Principles; and · such other criteria as are specified in the Residential Care Grant Principles. 30

This change includes the class of supported residents, and also broadens the criteria by providing that a majority of the residents must be supported residents, concessional residents or assisted residents and/or people with special needs or people of a kind specified in the Residential Care Grant Principles. Currently, the Act requires that there must be a majority of residents who are assisted or concessional and a majority of residents who have special needs (or are a type of resident as specified in the Residential Care Grant Principles). Item 125 In deciding the allocation of residential care grants, paragraph 72-3(1)(a) currently requires the Secretary to consider the proportion of grantees who are concessional residents or assisted residents. To this list, this item adds supported residents. Item 126 As an example of matters with which the conditions of a residential care grant may deal, paragraph 73-2(b) refers to the number of concessional residents and assisted residents who are to be provided with care when the project is completed. This item adds the number of supported residents to this example. Items 127 and 128 Subsection 76-1(1) currently allows the Secretary to allocate community care grants to approved providers in respect of the cost of projects for: · establishing new community care services; or · extending existing community care services to cover additional areas. Item 127 relaxes the second option by omitting `to cover additional areas'. This will allow providers to apply for grants when expanding the size of their community care service within existing areas. Item 128 adds a third option, namely those kinds of projects as described in the Community Care Grant Principles. Item 129 Paragraph 76-3(2)(b) currently allows 14 days for the provision of further information to the Secretary in relation to applications for the allocation of a community care grant. This item extends the time period to 28 days. This ensures consistency across like provisions in the Act. Item 130 This item inserts a new Part which enables the payment of grants to providers of Extended Aged Care at Home and Extended Aged Care at Home - Dementia (types of flexible care service). Currently, the Act enables the payment of grants for community care, but not for flexible care. This new Part mirrors the provisions enabling payment of community care grants and applies them to providers of flexible care services. 31

Part 5.2A--Flexible care grants Division 78A--Introduction Section 78A-1 What this Part is about This section describes the purpose of the Part. It provides that the Commonwealth may make flexible care grants to contribute towards the costs associated with some projects undertaken by approved providers to establish flexible care services or to enhance their capacity to provide flexible care. The Part describes the arrangements relating to flexible care grants. The section describes the divisions in the Part, namely, 78A (Introduction), 78B (How are flexible care grants allocated?), 78C (On what basis are flexible care grants paid?) and 78D (How much is a flexible care grant?). Section 78A-2 The Flexible Care Grant Principles This section notes that flexible care grants are also dealt with in the Flexible Care Grant Principles. The provisions in this Part indicate when a particular matter is, or may be, dealt with in these Principles. The Flexible Care Grant Principles are made by the Minister under section 96-1. Division 78B--How are flexible care grants allocated? Section 78B-1 Allocation of flexible care grants This section provides that a person may apply for an allocation of a flexible care grant and the Secretary may allocate such grants to approved providers in respect of the costs of projects for: · establishing new flexible care services; or · extending existing flexible care services; or · such other kinds of projects as are described in the Flexible Care Grant Principles. The allocation must meet the criteria for allocations (see section 78B-2). A flexible care grant can only be allocated to an approved provider: · whose approval under Part 2.1 includes flexible care; and · who holds an allocation of places for flexible care subsidy under Part 2.2 (whether or not it is a provisional allocation), being places that are, or are to be, included in the flexible care service in respect of which the grant is payable. An applicant who is not an approved provider must become an approved provider for a flexible care grant to be allocated. Section 78B-2 Criteria for allocations This section provides that the criteria for allocation of a flexible care grant are as follows: · whether there is a need for the flexible care service, or proposed flexible care service, to which the grant would relate; · whether the grant would assist people in rural or remote areas or Aboriginal and Torres Strait Islander communities; and · such other criteria as are specified in the Flexible Care Grant Principles. 32

Section 78B-3 Applications for flexible care grants This section provides that an application for the allocation of a flexible care grant must be in a form approved by the Secretary. If the Secretary needs further information to determine the application, the Secretary may give the applicant a notice requesting the further information within the period specified in the notice. If no period is specified in the notice, the information must be provided within 28 days of the request being made. The period for giving the further information can, however, be extended (as provided for in section 96-7). The section further provides that an application is taken to be withdrawn if the applicant does not give the further information within the required period. The notice given to the applicant must contain a statement setting out this consequence of non- compliance with the request. Section 78B-4 Notification of allocation This section provides that the Secretary must notify, in writing, each applicant to whom a flexible care grant has been allocated. The notice must be given within 14 days after the Secretary's decision under section 78B-1 is made. The notice must specify: · the amount of the grant; · the project to which the grant relates; · when the grant, or the instalments of the grant, will be paid; · if the grant is to be paid in more than one instalment--the amounts of the instalments or how they will be worked out; and · the conditions on which the grant is payable. Section 78B-5 Notice to unsuccessful applicants This section provides that the Secretary must notify, in writing, each applicant to whom a flexible care grant has not been allocated. The notice must be given within 14 days after the Secretary's decision under section 78B-1 is made. The notice must set out the reasons for the applicant not being allocated a grant. Division 78C--On what basis are flexible care grants paid? Section 78C-1 Basis on which flexible care grants are paid A flexible care grant is payable to an approved provider at the time determined by the Secretary in writing. The payment may be made in full or in the instalments determined by the Secretary in writing. The grant is subject to such conditions (if any) as the Secretary determines in writing (see section 78C-2). The grant is not payable unless the approved provider enters into an agreement with the Commonwealth under which the approved provider agrees to comply with the conditions to which the grant is subject. 33

Section 78C-2 Conditions of flexible care grants The following are examples of matters with which the conditions of a flexible care grant may deal: · the kinds of people who are to be provided with care when the project, in respect of which the grant is payable, is completed; · the period within which one or more conditions must be complied with by the approved provider; · the period within which the flexible care service in respect of which the grant is payable is to be operational; · the amount of money to be provided by the approved provider for the project; · information to be given to the Commonwealth by the approved provider; · the approved provider's compliance with any responsibilities of the approved provider under Chapter 4 and conditions imposed in respect of other payments made under this Chapter to the approved provider; and · the circumstances in which the grant must be repaid. Section 78C-3 Grants payable only if certain conditions met This section provides that the Secretary may specify which of the conditions of a flexible care grant must be met before the grant is payable. The grant is not payable unless the approved provider complies with those conditions. However, payment of the grant to the approved provider does not affect the approved provider's obligation to comply with any other conditions to which the grant is subject. Section 78C-4 Variation or revocation of allocations The Secretary may vary or revoke an allocation of a flexible care grant if the Secretary is satisfied that a condition to which the allocation is subject has not been met. (Variations or revocations of allocations are reviewable under Part 6.1 of the Act.) A variation of the allocation may be a reduction of the amount of the grant or a variation of any of the conditions to which the allocation is subject (or both). Before deciding to vary or revoke the allocation, the Secretary must notify the approved provider that it is being considered. The notice must be in writing, and it must invite the approved provider to make submissions, in writing, to the Secretary within 28 days after receiving the notice. The notice must also inform the approved provider that, if no submissions are made within that period, the variation or revocation takes effect on the day after the last day for making submissions. In making the decision whether to vary or revoke the allocation, the Secretary must consider any submissions made within that period. The Secretary must notify, in writing, the approved provider of the decision. The notice must be given to the approved provider within 28 days after the end of the period for making submissions. If the notice is not given within that period, the Secretary is taken to have decided not to vary or revoke the allocation, as the case requires. 34

A variation or revocation has effect: · if no submissions were made within the 28 day period--on the day after the last day for making submissions; or · if submissions were made within that period--on the day after the approved provider receives a notice. Section 78C-5 Variation of allocations on application of approved provider An approved provider may at any time apply to the Secretary for a variation of an allocation of a flexible care grant to the approved provider. A variation of the allocation may be a reduction of the amount of the grant or a variation of any of the conditions to which the allocation is subject (or both). The application must be in the form approved by the Secretary and the Secretary must, within 28 days after receiving the application, make a variation or reject the application. The Secretary must also notify the approved provider of the decision within that period. Variations of allocations and rejections of applications are reviewable under Part 6.1 of the Act. Section 78C-6 Agreement taken to be varied This section provides that, under sections 78C-4 or 78C-5, if the Secretary varies one or more of the conditions of an allocation, the agreement entered into under subsection 78C-1(3) is taken to be varied accordingly. Section 78C-7 Appropriation This section clarifies that payments by the Commonwealth under this Part (i.e. flexible care grants) are to be made out of money appropriated by the Parliament for that purpose. Division 78D--How much is a flexible care grant? Section 78D-1 The amount of a flexible care grant The amount of a flexible care grant is the amount specified in, or worked out in accordance with, the Flexible Care Grant Principles. The following are examples of matters with which the Flexible Care Grant Principles may deal in relation to the amounts of flexible care grants: · the circumstances of approved providers to which the grants are payable; · the purposes for which the grants are payable; · the locations of the flexible care services to which the grants relate; · the kinds of people who will be provided with flexible care through the services; · limits on the amounts of the grants. 35

Items 131 to 134 The table in section 85-1 lists reviewable decisions. These items add the decisions made under the following new provisions: · sections 43-4A and 47-4A in relation to a decision to extend (or refuse to extend) the period within which a variation of a claim for a residential or community care subsidy can be made; · subsection 44-24(1) or paragraph 44-24(2)(b), (3)(b) or (4)(b) in relation to a determination for the purposes of working out a care recipient's total assessable income; · subsection 78C-4(1) in relation to the decision to vary or revoke an allocation of a flexible care grant; · subsection 78C-5(4) in relation to a decision to vary an allocation of a flexible care grant; and · subsection 78C-5(4) in relation to a decision to reject an application to vary an allocation of a flexible care grant. Item 135 Section 85-4 allows the Secretary to reconsider a reviewable decision. Subsection (2) states that, under certain circumstances, this does not apply to determinations of a care recipient's ordinary income. This item changes the reference to `ordinary income' to `total assessable income' in line with the changes to the income test provisions (refer items 58 to 74). Item 136 References in the Act to particular government departments will date if the name of the department changes. This item amends paragraphs 85-4(2)(a) and (b) by replacing `Secretary to the Department of Social Security' with `Secretary of the Department administered by the Minister who administers the Social Security Act 1991'. Item 137 Section 85-5 allows a person whose interests are affected by a reviewable decision to request that the Secretary reconsider the decision. Subsection (2) states that, under certain circumstances, this does not apply to determinations of a care recipient's ordinary income. This item changes the reference to `ordinary income' to `total assessable income'. Item 138 References in the Act to particular government departments will date if the name of the department changes. This item amends paragraphs 85-5(2)(a) and (b) by replacing `Secretary to the Department of Social Security' with `Secretary of the Department administered by the Minister who administers the Social Security Act 1991'. Item 139 Section 85-5 allows a person whose interests are affected by a reviewable decision to request that the Secretary reconsider the decision. Subsection (3) requires that this written request be given to the Secretary within 28 days, or 90 days in the case of a decision under section 44-24 determining ordinary income. (The Secretary may allow longer periods). 36

Item 72 replaces section 44-24. This item clarifies the reference above to the new section by explicitly listing the four relevant areas: subsection 44-24(1) and paragraphs 44-24(2)(b), (3)(b) and (4)(b). Items 140 to 146 These items make consequential amendments to sections 85-6 and 85-7 (that deal with the date of effect of certain decisions made under the Social Security Act 1991) to change references from `ordinary income' to `total assessable income' and change the cross-referencing of 44-24(7) to 44-24(10) (to reflect the changes made to that section). Item 147 References in the Act to particular government departments will date if the name of the department changes. This item clarifies paragraph 86-3(cb) by referring to the Secretary of the Department administered by the Minister who administers the Social Security Act 1991. Item 148 References in the Act to particular government departments will date if the name of the department changes. This item amends section 86-7 by replacing `Department of Social Security' with `Department administered by the Minister who administers the Social Security Act 1991'. Item 149 References in the Act to particular government departments will date if the name of the department changes. This item amends section 86-7 by replacing `Department of Veterans' Affairs' with `Department administered by the Minister who administers the Veterans' Entitlements Act 1986'. The heading to section 86-7 is also altered by omitting `Departments of Social Security and Veterans' Affairs' and substituting `certain Departments'. Item 150 Section 96-1 lists the Principles that the Minister may make. This item adds a new set - the Flexible Care Grant Principles. This amendment relates to the inclusion of the new Part 5.2A enabling the allocation of grants to flexible care services. Items 151 and 152 References in the Act to particular government departments will date if the name of the department changes. Item 151 clarifies paragraph 96-2(2A)(b) by referring to the `Department administered by the Minister who administers the Veterans' Entitlements Act 1986'. Item 152 clarifies paragraph 96-2(3)(a) by referring to the `Secretary of the Department administered by the Minister who administers the Social Security Act 1991'. Items 153 and 154 Subsection 96-2(3) allows the Secretary to delegate powers relating to making a determination of a care recipient's ordinary income under section 44-24. These items replace references to `ordinary income' with `total assessable income'. 37

Items 155 and 156 References in the Act to particular government departments will date if the name of the department changes. These items clarify paragraph 96-2(3A)(b) and subsection 96-2(6B) by referring to the `Department administered by the Minister who administers the Veterans' Entitlements Act 1986'. Item 157 References in the Act to particular government departments will date if the name of the department changes. This item amends subsection 96-2(7) by replacing `the Secretary to the Department of Social Security' with `Secretary of the Department administered by the Minister who administers the Social Security Act 1991'. Item 158 The existing section 96-12 provides that the Minister must cause a copy of any determination made by the Minister under Chapter 3 of the Act to be laid before each House of the Parliament within 15 of the respective House's sitting days after that determination was made. This item repeals this section. This is because all of the references to determinations within Chapter 3 have now been amended to clarify whether the determinations are legislative instruments or not. This is consistent with the requirements of the Legislative Instruments Act 2003. The determinations made by the Minister that are legislative instruments will be required to be tabled as a result of the operation of the Legislative Instruments Act 2003 and will be subject to disallowance by both Houses of Parliament. There is therefore no longer any need to expressly provide for this in the Aged Care Act 1997. Items 159 to 170 These items insert the following definitions into Clause 1 of Schedule 1 of the Act, or amend or repeal existing definitions: · flexible care grant - This is a new term that results from the inclusion of the new Part relating to the allocation of grants to flexible care services. The definition states that the term `flexible care grant' means a grant payable under new Part 5.2A (refer item 159). · income support payment - This term is currently defined in the Act to mean an income support payment, or an income support supplement, or a payment of farm household support, or a drought relief payment. Item 160 removes income support supplement from the definition. This is because an income support supplement is a type of income support payment and is therefore captured by this aspect of the definition. · ordinary income - Item 161 repeals the definition of `ordinary income' as this term is no longer used in the Act (other than by references to Social Security legislation and Veterans' Affairs legislation where the term is used). The term is replaced by `total assessable income' which has the meaning given in new section 44-24 (refer item 169). · ordinary income free area - Item 162 repeals the definition of `ordinary income free area' as this term is no longer used in the Act. It is replaced with the term 38

`total assessable income free area' which has the meaning given in section 44-26 (refer item 170). · post-2008 reform resident - Item 163 provides that this has the meaning given in section 44-5C. · pre-2008 reform resident - Item 164 provides that this has the meaning given in the new section 44-5D. · pre-entry leave - Item 165 provides that this has the meaning given in section 44-5E. · Secretary - `Secretary' is currently defined as `Secretary to the Department of Health and Family Services'. As the name of the department may change from time to time, this item replaces the definition with `Secretary of the Department' (refer item 166). The word `Department' does not need to be defined because section 19A of the Acts Interpretation Act 1901 provides, in summary, that if an Act refers to a Department, without specifying which Department is referred to, the expression means the Department of State of the Commonwealth that deals with the matters to which the provision relates and is administered by the Minister administering the provision. · standard resident contribution - Item 167 amends the definition of this term so that it refers to sections 58-3, 58-4 and the new 58-4A. The first two sections pertain to pre-2008 reform residents not receiving income support payments (58-3), or receiving such payments (58-4). Section 58-4A pertains to people who are post-2008 reform residents. · supported resident - Item 168 provides that this has the meaning given in the new section 44-5B. · total assessable income - Item 169 provides that this has the meaning given in section 44-24. · total assessable income free area - Item 170 provides that this has the meaning given in section 44-26. Part 2--Application and transitional provisions Item 171 Application of item 10 Item 10 amends section 15-4 of the Act to expand the matters that the Secretary must consider when deciding whether to vary or revoke a provisional allocation. The effect of this application provision is that the amendments in item 10 will only apply to provisional allocations that have been notified to the approved provider (under subsection 15-4(3)) on or after 20 March 2008. This ensures that the old considerations continue until that time, thus preventing the amendment having any retrospective effect. 39

Item 172 Application of item 11 Item 11 amends section 15-5 of the Act to provide that, when the Secretary is deciding whether to vary a provisional allocation, he or she must have regard to any matters specified in the Allocation Principles. The effect of this application provision is that this amendment will only apply to applications for variations of provisional allocations made on or after 20 March 2008. This ensures that the old considerations continue until that time, thus preventing the amendment having any retrospective effect. Item 173 Application of items 14, 17, 53, 80, 120, 122 and 129 These items all increase the standard period for the provision of further information to the Secretary from 14 days to 28 days. This ensures consistency across like provisions of the Act. The effect of this application provision is that these amendments will only apply to requests for further information made on or after 20 March 2008. Item 174 Application of item 31 Item 31 concerns resident status determination by the Secretary. Currently, subsection 44-8AA(4) requires that, if the determination is made after the person enters the relevant residential care service, the date stated must not be before the date that the determination is made, unless the Secretary is satisfied of exceptional circumstances. Item 31 repeals this subsection. The effect of this application provision is that this amendment will only apply to resident status determinations made under subsection 44-8AA(1) on or after 20 March 2008. This ensures that the old considerations continue until that time, thus preventing the amendment having any retrospective effect. Item 175 Application of items 58 to 65 and 72 to 74 Items 58 to 65 pertain to the calculation of the daily income-tested reduction. Items 72 to 74 define `total assessable income' and `total assessable income free area'. The effect of this application provision is that these amendments will only apply to the calculation of the daily income-tested reduction under section 44-21 for a day that falls on or after 20 March 2008. It is important to note that the existing calculator and related sections (that pertain to the calculation of the daily income-tested reduction) will continue to apply to all days that fall before 20 March 2008. This is the case even where the calculator is actually applied on or after 20 March 2008 or where determinations on which the calculator depends have been made on or after 20 March 2008 (but relate to days that fell before 20 March 2008). 40

Item 176 Application of items 67 to 70 Section 44-23 sets out the effect on the daily income-tested reduction of a failure to give the Secretary requested information. Items 68 to 70 replace all references to `ordinary income' with `total assessable income'. The effect of this application provision is that these amendments will only apply in relation to requests made for the purposes of determining a matter under section 44-24 for the purposes of calculating the daily income-tested reduction for a day that falls on or after 20 March 2008. Item 177 Application of item 71 Item 71 introduces the amount equal to 150 per cent of the basic age pension amount into the calculation of the daily income-tested reduction. The effect of this application provision is that this amendment will only apply in relation to the calculation of the daily income-tested reduction under subsection 44-23(4) for a day that falls on or after 20 March 2008. It is important to note that the existing reference to `the amount worked out by subtracting the care recipient's standard resident contribution from an amount equal to 3 times the standard pensioner contribution' will continue to apply in relation to all days that fall before 20 March 2008. This is the case even where the calculation is actually performed on or after 20 March 2008. Items 178 and 179 Application of items 76 and 77 Currently, in order to calculate a care recipient's ordinary income under section 44-24, the Secretary may request information. Subsections 44-28(5) and (6) set out the days that the care recipient is not eligible for a pensioner supplement if the care recipient fails to, or elects not to, give that information. For both of these subsections, items 76 and 77 replace references to `ordinary income' with `total assessable income'. The effect of these application provisions is that these amendments will only apply in relation to requests and elections made for the purposes of determining a matter under section 44-24 for the purposes of calculating the daily income-tested reduction for a day that falls on or after 20 March 2008. The existing provision will continue to apply for the purposes of calculating the daily income-tested reduction for a day that falls before 20 March 2008 (even if this calculation is performed on or after 20 March 2008). Item 180 Application of items 108 and 109 Item 108 clarifies that, when calculating the maximum daily amount at which an accommodation charge accrues, the amount referred to in paragraph 57A-6(1)(b) is rounded down to the nearest cent. When calculating the maximum daily amount at which an accommodation charge accrues, currently the amount calculated in subparagraph 57A-6(1)(b)(i) is divided by 1,825. Item 109 changes this figure to 2,080. 41

The effect of these application provisions is that these amendments will only apply in relation to a calculation of the maximum daily amount at which an accommodation charge accrues for a care recipient if: · the care recipient enters a residential care service for the first time on or after 20 March 2008; or · the care recipient enters a residential care service for the first time before 20 March 2008, but there is a break in residential care of more than 28 days between: the last residential care service through which residential care was provided, or taken to be provided, to the care recipient before 20 March 2008 and the next residential care service through which residential care is provided, or taken to be provided, to the care recipient; and any residential care service through which residential care is provided, or taken to be provided, to the care recipient on or after 20 March 2008 and the next residential care service through which residential care is provided, or taken to be provided, to the care recipient. Item 181 Application of item 124 Item 124 alters the criteria for the allocation of a residential care grant, in particular by including the class of supported residents. The effect of this application provision is that this amendment will only apply in relation to residential care grants allocated on or after 20 March 2008. This ensures that the old considerations continue until that time, thus preventing the amendment having any retrospective effect. Item 182 Application of items 127 and 128 Subsection 76-1(1) currently allows the Secretary to allocate community care grants to approved providers in respect of the cost of projects for: · establishing new community care services; or · extending existing community care services to cover additional areas. Item 127 relaxes the second option by omitting `to cover additional areas'. Item 128 adds a third option, namely those kinds of projects as described in the Community Care Grant Principles. The effect of this application provision is that these amendments will only apply in relation to community care grants allocated on or after 20 March 2008. This ensures that the old considerations continue until that time, thus preventing the amendment having any retrospective effect. Item 183 Application of items 132, 135, 137 and 139 to 146 Item 132 provides that certain determinations for the purposes of working out a care recipient's total assessable income are reviewable decisions. Items 135, 137 and 139 to 146 reflect changes to the Secretary's ability to review decisions due to moving from ordinary income to total assessable income. 42

The effect of this application provision is that these amendments will only apply in relation to decisions in relation to the determination of matters under section 44-24 in relation to a day that falls on or after 20 March 2008. (Section 44-24 concerns the calculation of a care recipient's total assessable income). In other words, if a determination is made in relation to a care recipient's ordinary income in relation to day that falls before 20 March 2008, then the care recipient has review rights in relation to that determination (and under the existing provision) regardless of whether the determination is actually made on or after 20 March 2008 or whether the care recipient seeks review on or after 20 March 2008. Item 184 Application of items 153 and 154 Subsection 96-2(3) allows the Secretary to delegate powers relating to making a determination of a care recipient's ordinary income under section 44-24. Items 153 and 154 replace references to `ordinary income' with `total assessable income'. The effect of this application provision is that these amendments will only apply in relation to the determination of matters under section 44-24 in relation to a day that falls on or after 20 March 2008. Items 185 and 186 Transitional provision Sections 43-4A and 47-4A enable an approved provider to vary a claim for residential or community care subsidy made in respect of a payment period within 2 years after the end of the payment period, or such longer period as is determined by the Secretary. The effect of this transitional provision is that, in relation to claims for subsidy made under section 43-4 or 47-4 before 20 March 2008, sections 43-4A and 47-4A respectively apply to those claims as if the reference to the end of the payment period in those sections was a reference to 20 March 2008. 43

SCHEDULE 2--AGED CARE (BOND SECURITY) ACT 2006 Item 1 This item amends subsection 4(2) so that the Act applies to the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands. This is consistent with the change being made to the Aged Care Act 1997. 44

SCHEDULE 3--AGED CARE (BOND SECURITY) LEVY ACT 2006 Item 1 This item amends subsection 3(2) so that the Act applies to the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands. This is consistent with the change being made to the Aged Care Act 1997. 45

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