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Fees and Payments Principles 2014

Authoritative Version
Principles as made
These principles require approved providers to publish the maximum accomodation payment for a room or part of a room along with a key features statement and a description of the payment options available, enable the Aged Care Pricing Commissioner to approve prices above the maximum amount of accommodation payment determined by the Minister and provide the methodology for equivalence between refundable accommodation deposits and daily accommodation payments.
Administered by: Social Services
Made 28 Jan 2014
Registered 30 Jan 2014
Tabled HR 11 Feb 2014
Tabled Senate 11 Feb 2014
Date of repeal 01 Jul 2014
Repealed by Aged Care (Principles and Determinations) Repeal Instrument 2014

Commonwealth Coat of Arms

 

 

Fees and Payments Principles 2014

I, Mitch Fifield, Assistant Minister for Social Services, make the following principles under subitems 26(3), (4) and (6) of Schedule 2 to the Aged Care (Living Longer Living Better) Act 2013 and section 96‑1 of the Aged Care Act 1997.

Dated: 28 January 2014

 

Mitch Fifield

Assistant Minister for Social Services

 

  

  

  


Contents

Part 1—Preliminary                                                                                                                                        1

1............ Name of principles........................................................................................................ 1

2............ Commencement............................................................................................................. 1

3............ Authority....................................................................................................................... 1

4............ Definitions..................................................................................................................... 1

5............ Eligible flexible care services......................................................................................... 2

Part 2—Rules about charging accommodation payments                                                      3

6............ Application of Part 2..................................................................................................... 3

7............ Approved provider must publish information about maximum accommodation payment amount etc.     3

8............ Equivalence between provider’s refundable accommodation deposit amount and daily accommodation payment amount—general........................................................................................................... 4

9............ Approved provider must not charge more than provider’s maximum accommodation payment amount  5

10.......... Equivalence between provider’s refundable accommodation deposit amount and daily accommodation payment amount—for a particular person.................................................................................... 5

Part 3—Approval of higher maximum accommodation payment amount                  8

11.......... Interpretation................................................................................................................. 8

12.......... Applications for approval to charge higher maximum accommodation payment amount 8

13.......... Decision by Aged Care Pricing Commissioner............................................................. 9

14.......... Notification of Aged Care Pricing Commissioner’s decision...................................... 11

15.......... Duration of approval................................................................................................... 12

16.......... Indexation of Pricing Commissioner approved amount............................................... 12

 


Part 1Preliminary

  

1  Name of principles

                   These principles are the Fees and Payments Principles 2014.

2  Commencement

                   Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Provision(s)

Commencement

1.  Part 1

31 January 2014.

2.  Part 2

1 July 2014.

3.  Part 3

31 January 2014.

 

3  Authority

                   These principles are made under subitems 26(3), (4) and (6) of Schedule 2 to the Aged Care (Living Longer Living Better) Act 2013 and section 96‑1 of the Aged Care Act 1997.

4  Definitions

                   In these principles:

Act:

                     (a)  for the purpose of the operation of these principles before 1 July 2014—means the Aged Care Act 1997 as that Act would be in force if the amendments in Schedule 3 to the Aged Care (Living Longer Living Better) Act 2013 had commenced; and

                     (b)  for the purpose of the operation of these principles on or after 1 July 2014—means the Aged Care Act 1997.

approval day, for a Pricing Commissioner approved amount, means the later of:

                     (a)  1 July 2014; and

                     (b)  the day on which the approval of the amount takes effect.

approval year, for a Pricing Commissioner approved amount, means the period of 1 year beginning on:

                     (a)  the approval day for the Pricing Commissioner approved amount; or

                     (b)  any later anniversary of that day.

index number, for a quarter, means the All Groups Consumer Price Index number, being the weighted average of the 8 capital cities, published by the Australian Statistician in respect of that quarter.

Minister’s maximum accommodation payment amount means the maximum amount of accommodation payment determined by the Minister under section 52G‑3 of the Act.

multi‑purpose service has the meaning given by section 15.3 of the Flexible Care Subsidy Principles 1997.

part, of a room that is intended to provide accommodation for 2 or more persons, means an area of the room that is intended to be occupied as personal space by an individual person.

price agreement day, for a person and a relevant service, means the day on which the person and the approved provider of the service agree, under paragraph 52F‑1(1)(b) of the Act, about the maximum amount that would be payable if the person paid an accommodation payment for the service.

Pricing Commissioner approved amount means a higher maximum amount of accommodation payment (expressed as a refundable accommodation deposit amount) approved by the Aged Care Pricing Commissioner under subsection 52G‑4(5) of the Act.

Note:          See also Part 3 of these principles.

quarter means a period of 3 months commencing on 1 January, 1 April, 1 July or 1 October of a year.

relevant service means a residential care service or an eligible flexible care service.

Note:          A number of expressions used in these principles are defined in Schedule 1 to the Act, including the following:

(a)    accommodation payment;

(b)    Aged Care Pricing Commissioner;

(c)    daily accommodation payment;

(d)    eligible flexible care service (see also section 5 of these principles);

(e)    refundable accommodation deposit.

5  Eligible flexible care services

                   For subsection 52F‑1(2) of the Act, a flexible care service is permitted to charge accommodation payments if the service is a multi‑purpose service.

Note:          A flexible care service that is permitted, under these principles, to charge accommodation payments is an eligible flexible care service (see subsection 52F‑1(2) of the Act).

Part 2Rules about charging accommodation payments

  

6  Application of Part 2

                   For subparagraph 52G‑2(e)(ii) of the Act, this Part sets out rules about charging accommodation payments that must be complied with by an approved provider of a relevant service.

Note 1:       This Part commences on 1 July 2014.

Note 2:       The approved provider must also comply with the other rules set out in section 52G‑2 of the Act.

Note 3:       Relevant service means a residential care service or an eligible flexible care service (see section 4).

7  Approved provider must publish information about maximum accommodation payment amount etc.

             (1)  An approved provider of a relevant service must make the following information publicly available in relation to a room, or a part of a room, in the service:

                     (a)  a statement (including the information referred to in subsection (2)) describing the key accommodation features of the room or the part of the room;

                     (b)  the maximum accommodation payment amount (expressed as a refundable accommodation deposit amount, and as a daily accommodation payment amount worked out in accordance with section 8) that the provider could charge a person on a day for the room, or a part of the room, if the person made an agreement with the provider under paragraph 52F‑1(1)(b) of the Act on that day;

                     (c)  information explaining the options (as provided in paragraph 52F‑3(1)(e) of the Act) for paying the accommodation payment for the room or the part of the room;

                     (d)  at least one example of the daily accommodation payment amount (worked out in accordance with section 8) that would be payable for the room, or the part of the room, if the accommodation payment were paid by a combination of refundable accommodation deposit and daily accommodation payments.

Note:          The combination of refundable accommodation deposit and daily accommodation payments used in an example prepared under paragraph (d) is at the approved provider’s discretion. The example may be based on a person paying a quarter, a third, a half or any other amount of refundable accommodation deposit.

             (2)  For paragraph (1)(a), the statement describing the key accommodation features of a room, or a part of a room, in the relevant service must:

                     (a)  state the location of the service; and

                     (b)  include a description of the quality, condition, size and amenity of the room or the part of the room; and

                     (c)  include information about the number of persons who may be provided with accommodation in the room; and

                     (d)  state whether the room has access to a shared bathroom or has a private ensuite; and

                     (e)  include a description of the quality, condition, size and amenity of the common areas in the service that would be accessible to a person being provided with accommodation in the room; and

                      (f)  include a description of any specific accommodation or design features in the room or the part of the room; and

                     (g)  include a description of any specific accommodation or design features provided by the service that would be accessible to a person being provided with accommodation in the room; and

                     (h)  include information about any additional care or services (other than care and services specified in the Quality of Care Principles 1997 for the purposes of subsection 54‑1(1) of the Act) included in the accommodation payment amount and offered at no additional cost to a person being provided with accommodation in the room or the part of the room; and

                      (i)  state any additional costs associated with the room or the part of the room (such as extra service fees or costs relating to any additional care or services offered by the service) and describe the services offered for those costs.

             (3)  The information referred to in subsection (1) must:

                     (a)  be published on the approved provider’s website (if it has one); and

                     (b)  be given to the Secretary for publication by the Secretary; and

                     (c)  be included in written material to be given to prospective care recipients by the approved provider.

8  Equivalence between provider’s refundable accommodation deposit amount and daily accommodation payment amount—general

             (1)  For paragraph 7(1)(b), the approved provider of a relevant service must ensure that there is equivalence between:

                     (a)  the refundable accommodation deposit amount; and

                     (b)  the daily accommodation payment amount;

that are made publicly available, under that paragraph, for a day (the relevant day) and a room, or a part of a room, in the service.

             (2)  For the purpose of complying with subsection (1), the daily accommodation payment amount for the relevant day for the room, or the part of the room, must be the amount worked out as follows:

Daily accommodation payment amount calculator

Step 1.   Work out the maximum permissible interest rate for the relevant day using the calculator in subsection (3).

Step 2.   Multiply the rate worked out at step 1 by the refundable accommodation deposit amount referred to in paragraph (1)(a).

Step 3.   Divide the amount worked out at step 2 by 365.

The result is the daily accommodation payment amount for the relevant day for the room or the part of the room.

             (3)  The maximum permissible interest rate for the relevant day is worked out as follows:

Maximum permissible interest rate calculator

Step 1.   Work out the general interest charge rate for the relevant day under section 8AAD of the Taxation Administration Act 1953.

Step 2.   Multiply the rate worked out at step 1 by the number of days in the calendar year in which the relevant day falls.

Step 3.   Subtract 3 percentage points from the amount worked out at step 2.

The result is the maximum permissible interest rate for the relevant day.

             (4)  For paragraph 7(1)(d), the daily accommodation payment amount that would be payable for the room, or the part of the room, if the accommodation payment were paid by a combination of refundable accommodation deposit and daily accommodation payments must be the amount worked out in accordance with subsection (2), as if the reference in Step 2 to the refundable accommodation deposit amount were a reference to that amount as reduced by the amount of refundable accommodation deposit that would be paid.

9  Approved provider must not charge more than provider’s maximum accommodation payment amount

                   An approved provider of a relevant service must not charge a person an amount of accommodation payment on a day for a room, or a part of a room, in the service that is higher than the maximum accommodation payment amount that was made publicly available by the provider under section 7 for the person’s price agreement day and the room or the part of the room.

Note 1:       The approved provider must not charge a person an amount of accommodation payment for a room, or a part of a room, in a relevant service that is higher than:

(a)    the Minister’s maximum accommodation payment amount; or

(b)    if the Aged Care Pricing Commissioner has approved a higher maximum amount of accommodation payment for the room, or the part of the room, under subsection 52G‑4(5) of the Act—the Pricing Commissioner approved amount.

                   See paragraph 52G‑2(c) of the Act and Part 3 of these principles.

Note 2:       An approved provider must not accept a payment that would result in a person paying an amount of accommodation payment that is greater than the amount set out in the person’s accommodation agreement (see section 52G‑5 of the Act).

10  Equivalence between provider’s refundable accommodation deposit amount and daily accommodation payment amount—for a particular person

             (1)  This section applies in relation to a person with whom the approved provider of a relevant service has made an agreement under paragraph 52F‑1(1)(b) of the Act about the maximum amount that would be payable for a room, or a part of a room, in the service if the person paid an accommodation payment for the room or the part of the room.

             (2)  The approved provider must ensure that there is equivalence between:

                     (a)  the refundable accommodation deposit amount that the provider could charge the person on a day (the relevant day) for the room or the part of the room; and

                     (b)  the daily accommodation payment amount that the provider could charge the person on the relevant day for the room or the part of the room.

             (3)  For the purpose of complying with subsection (2), the daily accommodation payment amount that the provider could charge the person on the relevant day for the room, or the part of the room, must be the amount worked out as follows:

Daily accommodation payment amount calculator

Step 1.   Work out the maximum permissible interest rate for the person using the calculator in subsection (4).

Step 2.   Work out the amount that is the difference between:

               (a)     the accommodation payment (expressed as a refundable accommodation deposit amount) agreed with the person under paragraph 52F‑1(1)(b) of the Act for the room or the part of the room; and

              (b)     the amount (if any) of that refundable accommodation deposit amount paid by the person on or before the relevant day for the room or the part of the room.

Step 3.   Multiply the rate worked out at step 1 by the amount worked out at step 2.

Step 4.   Divide the amount worked out at step 3 by 365.

The result is the daily accommodation payment amount that the approved provider could charge the person on the relevant day for the room or the part of the room.

             (4)  The maximum permissible interest rate for the person is worked out as follows:

Maximum permissible interest rate calculator

Step 1.   Work out the general interest charge rate for the person’s price agreement day under section 8AAD of the Taxation Administration Act 1953.

Step 2.   Multiply the rate worked out at step 1 by the number of days in the calendar year in which the person’s price agreement day falls.

Step 3.   Subtract 3 percentage points from the amount worked out at step 2.

The result is the maximum permissible interest rate for the person.

Part 3Approval of higher maximum accommodation payment amount

  

11  Interpretation

                   In this Part:

                     (a)  a reference to a relevant service includes a reference to a proposed relevant service; and

                     (b)  a reference to a room in a relevant service includes a reference to a proposed room in the service; and

                     (c)  a reference to a part of a room in a relevant service includes a reference to a proposed part of a room in the service.

Note:          Relevant service means a residential care service or an eligible flexible care service (see section 4).

12  Applications for approval to charge higher maximum accommodation payment amount

Requirements for applications

             (1)  For paragraph 52G‑4(2)(a) of the Act, subsections (2) to (5) set out requirements for an application by an approved provider of a relevant service, under subsection 52G‑4(1) of the Act, for approval to charge an accommodation payment for a room, or a part of a room, in the service that is higher than the Minister’s maximum accommodation payment amount.

Note 1:       The higher maximum accommodation payment amount must be expressed as a refundable accommodation deposit amount (see paragraph (4)(b) of this section).

Note 2:       An application may be made on or after 31 January 2014 (which is the date on which this Part commences).

             (2)  An application must:

                     (a)  be in writing; and

                     (b)  be in a form approved by the Aged Care Pricing Commissioner; and

                     (c)  be accompanied by any information or documents specified by the approved form.

             (3)  An application may relate to one or more of any of the following:

                     (a)  a room that is intended to provide accommodation for one individual person;

                     (b)  a part of a room that is intended to provide accommodation for 2 or more persons.

However, an application must not relate to more than one relevant service.

             (4)  An application must specify:

                     (a)  each room, or each part of a room, in the relevant service for which approval to charge a higher maximum accommodation payment amount is sought; and

                     (b)  the higher maximum accommodation payment amount (expressed as a refundable accommodation deposit amount) that the approved provider is seeking approval to charge for the room or the part of the room.

             (5)  A different higher maximum accommodation payment amount may be specified under subsection (4) for different rooms, or different parts of a room, in the relevant service.

Note:          The Aged Care Pricing Commissioner may require an approved provider to give the Commissioner further information in relation to an application made under subsection 52G‑4(1) of the Act. The application is taken to have been withdrawn if the information is not given within the required time (see subsections 52G‑4(3) and (4) of the Act).

Period within which application must not be made

             (6)  For subparagraph 52G‑4(2)(b)(i) of the Act, the period of 4 months is specified.

Note:          The effect of subsection (6) is that an application for approval to charge a higher maximum accommodation payment amount for a room, or a part of a room, in a relevant service must not be made within 4 months after the Aged Care Pricing Commissioner last made a decision under subsection 52G‑4(5) of the Act in relation to that room or that part of the room. However, this restriction does not prevent an application being made in relation to another room, or another part of a room, in the relevant service.

13  Decision by Aged Care Pricing Commissioner

             (1)  For subsection 52G‑4(5) of the Act, this section applies in relation to an application to the Aged Care Pricing Commissioner by an approved provider of a relevant service, under subsection 52G‑4(1) of the Act, for approval to charge an accommodation payment for a room, or a part of a room, in the service that is higher than the Minister’s maximum accommodation payment amount.

Note:          An approved provider may not charge any person an accommodation payment before 1 July 2014 (which is the day on which the amendments of the Aged Care Act 1997 in Schedule 3 to the Aged Care (Living Longer Living Better) Act 2013 are to commence).

Factors to be considered

             (2)  In deciding whether to approve the higher maximum accommodation payment amount for the room, or the part of the room, in the relevant service, the Aged Care Pricing Commissioner:

                     (a)  must consider the following:

                              (i)  the proposed higher maximum accommodation payment amount;

                             (ii)  the location of the service;

                            (iii)  the quality, condition, size and amenity of the room or the part of the room;

                            (iv)  the number of persons who may be provided with accommodation in the room;

                             (v)  whether the room has access to a shared bathroom or has a private ensuite;

                            (vi)  the quality, condition, size and amenity of the common areas in the service that would be accessible to a person being provided with accommodation in the room;

                           (vii)  whether the room, or the part of the room, has any specific accommodation or design features;

                          (viii)  whether the service has any specific accommodation or design features that would be accessible to a person being provided with accommodation in the room;

                            (ix)  any additional care or services (other than care and services specified in the Quality of Care Principles 1997 for the purposes of subsection 54‑1(1) of the Act) included in the accommodation payment amount and offered at no additional cost to a person being provided with accommodation in the room or the part of the room; and

                     (b)  may consider:

                              (i)  the cost of providing the accommodation; and

                             (ii)  any other relevant matter.

Note:          In considering the cost of providing the accommodation in relation to an application that relates to a proposed room, or a proposed part of a room, the Aged Care Pricing Commissioner may consider the proposed cost of construction or refurbishment.

Approval in relation to proposed room etc. may be given subject to conditions

             (3)  If the application relates to a proposed room, or a proposed part of a room, in the relevant service, the Aged Care Pricing Commissioner may approve the higher maximum accommodation payment amount for the room, or the part of the room, subject to the condition that the approval does not take effect unless:

                     (a)  the approved provider gives the following information to the Aged Care Pricing Commissioner, in writing:

                              (i)  information showing that the construction or refurbishment of the room, or the part of the room, has been completed and that the completed or refurbished room, or part of the room, is equivalent to or better than the proposal described in the application;

                             (ii)  the total actual cost (the actual cost) of the completed construction or refurbishment; and

                     (b)  the Aged Care Pricing Commissioner notifies the approved provider under paragraph (4)(b) that he or she is satisfied, having regard to the information given under paragraph (a), that the requirements referred to in subparagraph (a)(i) have been met in relation to the room, or the part of the room, and that:

                              (i)  the actual cost of the completed construction or refurbishment is not significantly lower than the proposed cost of the construction or refurbishment; or

                             (ii)  if the actual cost of the completed construction or refurbishment is significantly lower than the proposed cost of the construction or refurbishment and if the lower actual cost had been provided to the Aged Care Pricing Commissioner with the application as the proposed cost—the Aged Care Pricing Commissioner would still have approved the higher maximum accommodation payment amount applied for.

             (4)  The Aged Care Pricing Commissioner must, within 28 days after receiving information in relation to a proposed room, or a proposed part of a room, under paragraph (3)(a):

                     (a)  decide whether, having regard to the information, the Aged Care Pricing Commissioner is satisfied as referred to in paragraph (3)(b) in relation to the room or the part of the room; and

                     (b)  notify the approved provider, in writing, of the Aged Care Pricing Commissioner’s decision.

             (5)  If the Aged Care Pricing Commissioner is satisfied as referred to in paragraph (3)(b) in relation to the room or the part of the room, the notice given under paragraph (4)(b) must specify the date on which the approval of the higher maximum accommodation payment amount for the room, or the part of the room, is to take effect.

Review of decision

             (6)  A decision under paragraph (4)(a) that the Aged Care Pricing Commissioner is not satisfied as referred to in paragraph (3)(b) in relation to a proposed room, or a proposed part of a room, is a reviewable decision under section 85‑1 of the Act.

14  Notification of Aged Care Pricing Commissioner’s decision

             (1)  The Aged Care Pricing Commissioner must notify, in writing, an approved provider who made an application, under subsection 52G‑4(1) of the Act, for approval to charge a higher maximum accommodation payment amount:

                     (a)  whether or not the higher amount is approved; and

                     (b)  if the higher amount is approved and the approval is not subject to the condition referred to in subsection 13(3)—of the date on which the approval is to take effect.

Note 1:       A decision not to approve a higher maximum accommodation payment amount is reviewable under Part 6.1 of the Act.

Note 2:       If a higher maximum accommodation payment amount is approved, the amount applies only in relation to a person:

(a)    who at the date of approval has not entered into an accommodation agreement with the approved provider; and

(b)    whose entry to the relevant service occurs on or after the date of the approval.

                   See subsection 52G‑4(6) of the Act.

             (2)  If the higher maximum accommodation payment amount is approved subject to the condition referred to in subsection 13(3), the notice must include a statement setting out the condition.

             (3)  The notice must be given within 60 days after the Aged Care Pricing Commissioner received the application.

             (4)  If the Aged Care Pricing Commissioner requested further information under subsection 52G‑4(3) of the Act to determine the application, the 60 day period referred to in subsection (3) does not include the period beginning on the day the request was made and ending on the day the information was received.

15  Duration of approval

                   An approval given under subsection 52G‑4(5) of the Act to charge a higher maximum accommodation payment amount for a room, or a part of a room, in a relevant service ceases to have effect:

                     (a)  if there is a change in the location at which residential care is provided through the service; or

                     (b)  in any other case—at the end of 4 years beginning on the approval day.

Note:          An approved provider may not charge any person an accommodation payment before 1 July 2014 (which is the day on which the amendments of the Aged Care Act 1997 in Schedule 3 to the Aged Care (Living Longer Living Better) Act 2013 are to commence).

16  Indexation of Pricing Commissioner approved amount

             (1)  A Pricing Commissioner approved amount that may be charged by an approved provider (the relevant approved provider) may be indexed by the approved provider on the first day of the second, or a later, approval year (the current approval year) for the amount, by multiplying the amount by the indexation factor worked out using the formula:

where:

most recent index number means the index number for the most recent quarter ending before the first day of the current approval year.

previous index number means the index number for the most recent quarter ending before the first day of the previous approval year.

Note:          The following terms are defined in section 4: approval year; index number; Pricing Commissioner approved amount; quarter.

             (2)  If a Pricing Commissioner approved amount is indexed under this section, the Act and these principles have effect as if the indexed amount were substituted for the Pricing Commissioner approved amount.

             (3)  If a Pricing Commissioner approved amount is indexed on a day under this section, the indexed amount applies only in relation to a person:

                     (a)  who, before that day, has not entered into an accommodation agreement with the relevant approved provider; and

                     (b)  whose entry to the relevant service occurs on or after that day.

             (4)  If, apart from this subsection, a Pricing Commissioner approved amount indexed under this section would be an amount of dollars and cents:

                     (a)  the amount is to be rounded to the nearest whole dollar; and

                     (b)  if the amount to be rounded is 50 cents, the amount is to be rounded down.

             (5)  If, at any time (whether before or after the commencement of these principles), the Australian Statistician publishes an index number for a quarter in substitution for an index number previously published by the Australian Statistician for that quarter, the publication of the later index number is to be disregarded for this section.

             (6)  If, at any time (whether before or after the commencement of these principles), the Australian Statistician changes the index reference period for the Consumer Price Index, then, in applying this section after the change is made, regard is to be had only to index numbers published in terms of the new index reference period.