Provider-based subsidies apply to ongoing and short-term residential care. These subsidies are meant to help providers to deliver sustainable and flexible services that meet older people’s needs.
[Chapter 4 – Part 2 – Division 4]
Calculating the provider-based subsidy
The method to find the subsidy amount is similar to the method for person-centred subsidies but differs slightly between the ongoing and short-term classification types for residential care, as explained below:
- Work out the base provider amount for a day of care.
- Add any provider-based supplements.
- Subtract any reductions from that amount (only applies to ongoing residential care).
- Calculate the final subsidy amount.
Find base provider amount
The base provider amount is the starting point to work out the provider-based subsidy amount. The amount depends on features of the residential care home, such as its location or if it has specialised status.
Approved residential care homes can apply for specialised status, which may affect the subsidies they receive. Specialised status may apply if a provider is delivering services that meet the needs of a vulnerable group or a specific need. For example, in a home where more than 50% of people accessing care are Aboriginal and Torres Strait Islander persons.
The base rate isn’t always directly linked to the number of older people receiving care at the home. This is because in some cases, the provider’s costs to run the care home will stay the same even with fewer residents.
The base provider amounts and the criteria for each are set out in the Rules.
Add provider-based supplement
These extra payments are explained in the Rules and may support the provider to deliver services in certain situations. For example, the Rules include a registered nurse supplement. This supports residential care providers to meet their obligation under the Act to always have a registered nurse on site and on duty at the home.
Subtract reductions
Subsidy reductions only apply to ongoing residential aged care. These reductions are subtracted from the subsidy amount. The Act includes 2 provider-based reductions:
- A compensation payment reduction may apply if someone is entitled to or has received compensation that covers the cost of some or all of their care.
- A provider-based subsidy reduction may apply if an older person can afford to pay a contribution towards the cost of their non-clinical care, based on means testing.
Final subsidy amount
The final subsidy amount is worked out by adding together the base provider amount for a day of care and any provider-based supplements (for short-term care), and after subtracting any applicable reductions (for ongoing care). These are the subsidy amounts that the provider will make a claim for.