On 15 May 2020, the Commonwealth Government made some changes to the laws governing aged care residents’ leave subsidies. These changes have been publicised as a means of protecting residents’ entitlements and preventing aged care providers from charging certain fees. But what do the new laws actually say? In this article we set out the key facts and what they mean for aged care providers.
Quick Summary
- The new laws create a new “emergency leave” for aged care residents.
- Aged care providers will be entitled to a subsidy for all residents who are away from the aged care home on “emergency leave.”
- As with social leave, residents will still be required to pay their basic daily fees and any means tested care fee and daily accommodation payment obligations whilst on emergency leave.
- Aged care providers will not be allowed to charge such residents a fee to reserve their place.
- Aged care providers may have to reimburse some reserve fees charged after 1 April 2020.
- The new laws apply from 1 April 2020 to 30 September 2020 for all residential care services in Australia.
Which Laws Were Changed?
The government used the Aged Care Legislation Amendment (Emergency Leave) Act 2020 (Cth) to make changes to the Aged Care Act 1997 (Cth) and the Aged Care (Transitional Provisions) Act 1997 (Cth).
The amendments to the Aged Care Transitional Provisions Act replicate those in the Aged Care Act, so we will only talk about the Aged Care Act in this article.
Why Have the Laws Been Changed?
The government pays a subsidy to approved aged care providers for every day that they provide care to a resident inside the aged care home. The government also pays a subsidy for some of the days that residents are away from the home on “social” leave.
Until recently, the government would subsidise 52 days of social leave for a resident of an aged care home. This meant that if the resident took a 53rd day of leave, the provider would receive no subsidy. In such cases, the provider would often pass the cost onto the resident. The government decided that this would unfairly penalise those residents who wanted to move out of their aged care home for a long period during the COVID-19 pandemic. There was also a concern that some residents would remain in a home even though they didn’t want to, because they couldn’t afford to pay for leave. This is why the government changed the law.
What the New Laws Say: New Emergency Leave Subsidies
There are rules about when the government will subsidise a residents’ leave and when they won’t. These rules are set out in section 42-2 of the Aged Care Act 1997 (Cth). Until recently, this section effectively said that the government would subsidise:
- an unlimited number of days leave for residents who are away from the home receiving treatment in hospital
- 52 days leave for residents who are away from the home for non-hospital (“social”) reasons.
The new laws make it so that the government will now subsidise:
- an unlimited number of days leave for residents who are away from the home receiving treatment in hospital
- 52 days leave for residents who are away from the home for non-hospital reasons
- an unlimited number of days leave for residents who are away from the home for non-hospital (“social”) reasons during a situation of emergency.
What is a “situation of emergency?”
According to the new laws, a situation of emergency may include a disaster (whether natural or otherwise), an epidemic or a pandemic. The situation of emergency exists when the Minister makes a written declaration. The Minister can declare an emergency for a single aged care home, or a nationwide emergency for every home in Australia.
Has a “situation of emergency” been declared?
As mentioned, a situation of emergency does not officially exist until the Minister makes a written declaration. A situation of emergency was declared on 3 June 2020. It says: “There is a situation of emergency for all days in the period beginning on 1 April 2020 and ending on 30 September 2020 for all residential care services in Australia.”
What the New Laws Say: New Limits on Charging Fees for Reserving a Place
If a resident is away from the home but not on leave, providers sometimes charge them a fee to “reserve their place.” As providers often only receive subsidies when residents are in the home or on leave, this is a way to compensate them for preserving a resident’s place during a period when they are receiving no government support.
There are rules about when and how much a provider can charge a resident to reserve their place. These rules are set out in section 52C-5 of the Aged Care Act 1997 (Cth). This section effectively used to say that a provider can only charge the reserving fee to someone who:
- is absent from the home and
- has already used up their 52 days, so can’t be considered to be “on leave.”
Under the new laws, this section says that a provider can only charge the reserving fee to someone who:
- is absent from the home and
- is not on leave.
The effect of this seems to be that providers can’t charge a reserving fee to someone who is away from the home on emergency leave, even if that person has used up their 52 days.
Plans to Back Date the New Emergency Leave Entitlements
In his press release, the Minister said that “Eligibility for emergency leave will be backdated to 1 April this year, so people impacted by the current COVID-19 crisis are not disadvantaged.” The repercussions of this are not clear and could be complicated for aged care providers who may have to reimburse some fees.
In its May 16 Protecting Older Australians Newsletter, the Department of Health advised that:
“For the current COVID-19 emergency the Determination will be backdated to 1 April this year. As a result permanent aged care residents who have taken leave from their aged care home during the COVID-19 emergency will be able to access the new leave type retrospectively from 1 April 2020.
Social leave balances will be restored to their 1 April 2020 level and any additional charges paid by residents for exceeding their social leave limit will need to be reimbursed by their provider.”
Conclusion: What Does this Mean for Aged Care Providers?
From 1 April 2020 to 30 September 2020, aged care providers:
- will be entitled to the “emergency leave” subsidy – i.e, entitled to a subsidy for any residents who are on leave from the home during the emergency period, even if they are on leave longer than 52 days
- will not be permitted to charge a reserving fee to anyone who is away from the home on “emergency leave”
- may have to reimburse any reserve fees charged after 1 April 2020.
