For residential care, there are both person-centred subsidies and provider-based subsidies.
A residential aged care provider must be eligible to receive these subsidies. For example, the number of people they claim person-centred subsidies for cannot be higher than the approved number of beds in the care home.
[Chapter 4 – Part 2 – Division 4]
Calculating the person-centred subsidy
This general method to work out the person-centred subsidy amount for residential care applies to both ongoing and short-term residential care:
- Work out the relevant base rate for a day of care for the older person.
- Add any primary person-centred supplements.
- Subtract reductions, if any, from that amount (only applies to ongoing residential care).
- Add any secondary person-centred supplements.
- Calculate the final subsidy amount.
Work out the base rate
Work out the base rate of the service delivered. This is the rate for a day of ongoing or short-term residential care. The amounts are set in the Rules and depend on the older person’s classification type and level. For ongoing care, the base rate may also depend on whether the older person is on extended hospital leave.
The Act defines 5 different types of leave for an older person in ongoing residential care. Whether an older person is on leave and what kind of leave they’re on can change the base rate for the person-centred subsidy.
Add primary person-centred supplements
These extra payments allow the government to address specific community needs. The Act specifies 2 primary person-centred supplements:
- Hotelling supplement: This is an extra payment that reduces the hotelling contribution amount that an older person needs to pay. The amount is set in the Rules.
- Accommodation supplement: This extra payment reduces the accommodation payment that an older person may need to pay. It’s paid when certain conditions apply and is set out in the Rules. This supplement is only relevant for ongoing residential care.
Hotelling and accommodation contributions are amounts that older people may need to pay towards the cost of their care.
- Hotelling contributions go towards the costs of daily living, such as food, cleaning and utilities.
- Accommodation contributions cover the price for the room in the residential care home. This is separate from the costs associated with care services.
These are explained more later in this chapter.
The Rules also set out other primary person-centred supplements to meet specific needs.
Subtract reductions
Subtract any reductions from the price (but not below zero). A reduction is an amount that can reduce how much subsidy the government pays. There are 2 types of person-centred reductions in the Act:
- A compensation payment reduction may apply if someone is entitled to or has received compensation for something related to the cost of their aged care services. For example, if someone is in residential care due to an injury that they received compensation for.
- A person-centred subsidy reduction may apply, depending on how much the older person can afford to pay. The Act explains the method to work out this reduction amount, based on the hotelling contribution.
Reductions only apply for older people in ongoing residential care, not short-term residential care.
Add secondary person-centred supplements
Secondary person-centred supplements are added after any reductions have been applied. The Act includes one secondary person-centred supplement:
- The fee reduction supplement reduces or waives fees or contributions that would usually need to be paid. The Rules explain when this can be applied to a subsidy payment.
The Rules also include other secondary person-centred supplements, which help the government meet specific needs in aged care.
Final subsidy amount
The final subsidy amount is worked out after adding any applicable secondary person-centred supplements. This is the subsidy amount that the provider will make a claim for.