EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Ageing
Aged Care Act 1997 
Classification Amendment Principles 2005 (No.1)

The Aged Care Act 1997 (“the Act”) provides for the funding of aged care services.  Persons who are approved under the Act to provide flexible aged care services can be eligible to receive flexible care subsidy payments in respect of the care they provide to approved care recipients.

The purpose of the Classification Amendment Principles 2005 (No. 1) is to amend the Classification Principles 1997 (‘the Classification Principles’) to establish that, where a residential care recipient takes hospital leave followed by leave for transition care for a combined and continuous period of 30 days or more, the expiry date for a classification is at the end of the combined period of leave, regardless of whether the original expiry date would have fallen within or after this period.

Principles made under the Aged Care Act 1997
Subsection 96-1(1) of the Act allows the Minister to make Principles providing for various matters required or permitted by a Part or section of the Act. 

Subsection 96-1(2) of the Act provides that any Principles made under subsection 96-1(1) of the Act are disallowable instruments.

The Classification Principles is one of the sets of Principles made under the Act. 

Context of the Classification Amendment Principles 2005 (No. 1)
This amendment is to give effect to the commitment by the Government in the 2004-05 Budget to provide up to 2,000 transition care places over three years to help older people make the transition from hospital care, under a new cost-shared model of care with the states and territories.

In this context, transition care refers to a kind of flexible care that is provided to a care recipient at the conclusion of an in-patient hospital episode (after the provision of any necessary acute and subacute care) and in the form of services that are goal-oriented, time-limited and therapy focussed.  The services provided will be those necessary to complete the care recipient’s restorative process, optimise the care recipient’s functional capacity and assist the care recipient, family and carer to make appropriate long-term care arrangements.  It can be provided in either a residential or community setting, and must be in a non-hospital, more home like environment.

Subsection 27-1(1) of the Act provides that, unless it is renewed, a classification will cease to have effect on its expiry date.  Subsection 27-1(2) allows that the expiry date (other than for classification in relation to respite care), will be either the day that occurs 12 months after the classification took effect, or any other day that is specified in the Classification Principles.

Section 27-3 of the Act provides that, following a period of extended hospital leave that begins and ends before a recipient’s RCS classification expiry date (under section 27-1 of the Act), the expiry date is brought forward to the day on which that leave ended, provided that the recipient returns immediately to residential aged care.  

Similarly, under Part 8, Division 3 of the Classification Principles, if a care recipient takes extended hospital leave that ends after the expiry date, the expiry date is brought back to the day on which the leave ends.

To ensure consistency and maintain the protections inherent in these provisions, this amendment to the Classification Principles establishes similar arrangements when hospital leave is followed by leave for transition care, and where this combined period of leave has a duration of 30 days or longer.

The following problems could arise in the absence of such an amendment:

•	Without this amendment, if a residential care recipient took extended hospital leave which was followed by an episode of transition care, because they would not return immediately to their normal residential care, there would be no change to their classification expiry date, unless the expiry date fell during their hospital episode.  If the latter was the case, then the expiry date would be brought back to the end of the period of hospital leave, which would be at the commencement of transition care.  It would not be practical to require reclassification during a reappraisal period commencing at this time, because the recipient would be undergoing rehabilitation and their long-term level of functioning would not be well-established. 

•	If, under the same scenario, the current expiry date fell during the period of transition care, a similar problem could arise.  

Consultation

The parameters of transition care have been developed through a consultation process with State and Territory Government representatives.  All States and Territories were included in a Transition Care Task Group, along with appropriate clinical representatives.  

Regulation impact statement

The Office of Regulation Review (ORR) assessed the proposed amendments and determined that the preparation of a Regulation Impact Statement was not required (ORR ID number 7225).

ATTACHMENT

NOTES ON CLAUSES

Clause 1 provides that the Amending Principles are to be cited as the Classification Amendment Principles 2005 (No. 1).

Clause 2 provides that the Principles commence on the day that they are registered.

Clause 3 amends the Classification Principles 1997 as set out in the Schedule.

Schedule 1: Amendments
Item 1 amends section 9.3 to include the definition of “transition care” as set out under section 15.28 of the Flexible Care Subsidy Principles (as inserted by the Flexible Care Amendment Principles 2005 (No. 1)).

Item 2 amends section 9.29A, which stipulates the purpose of Division 3 of Part 8 of the Classification Principles as being to specify the expiry date for a classification of a residential care recipient who takes extended hospital leave (that is, for a continuous period of 30 days or more).  The section is amended so that it does not apply where a period of extended hospital leave is immediately followed by a period of leave for transition care (as provided by subsection 42-2(3A)).

Similarly, item 3 amends section 9.29B so that it does not apply where a period of extended hospital leave is immediately followed by a period of leave for transition care.

The combined impact of Items 2 and 3 is to ensure that, if an existing residential care recipient takes extended hospital leave and then moves from hospital to transition care, it is not a requirement that a reclassification should occur during a reappraisal period that occurs while the person is in transition care.  Because it is expected that the average time a care recipient will spend in transition care will be in the order of eight weeks, it is very likely that the reclassification would be required while the care recipient is in transition care.  This would be inappropriate because the full extent of the care recipient’s functional improvement would not yet be apparent.  

Item 4 inserts a note at the foot of section 9.29B, explaining that the expiry date for the classification of a residential care recipient who takes leave for more than 30 days that is comprised of both hospital leave (provided by subsection 42-2(2) of the Act) and leave for transition care (provided by subsection 42-2(3A) of the Act), is specified in Division 4 of Part 8 of the Classification Principles (see Item 5 below).

Item 5 inserts a new Division (Division 4) under Part 8 of the Classification Principles, which specifies the expiry date for a classification of a residential care recipient who takes leave for more than 30 days that is comprised of both hospital leave and leave for transition care.  Division 4 is described in the following explanations.

New section 9.29C specifies the purpose of Division 4, as described above.

The new subsection 9.29D(1) provides that, if a care recipient is on leave from a residential care service for a period of 30 days or more, and that this period comprises a combination of hospital leave (as provided by subsection 42-2(2) of the Act) followed by leave for transition care (as provided by subsection 42-2(3A) of the Act), and the nominal expiry date for the care recipient’s classification occurs during or after the combined period of leave, then the expiry date for the classification becomes the day after the day on which the leave ends.  This amendment ensures consistency with the current provisions with respect to the expiry date following a period of extended hospital leave, and ensures that reclassification is not required during the time that a care recipient spends in transition care.

The new subsection 9.29D(2) specifies the meaning of the term nominal expiry date, as used in new paragraph 9.29D(1)(b).  This term is defined as the day that would be the expiry date for the classification of the care recipient if paragraph 27-1(2)(a) of the Act applied (viz, the day that would occur 12 months after the classification took effect).