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2008
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
AGED CARE AMENDMENT (2008 MEASURES NO. 2) BILL 2008
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Ageing, the Hon Justine
Elliott MP)
AGED CARE AMENDMENT (2008 MEASURES NO. 2) BILL 2008
OUTLINE
The purpose of the Bill is to amend the Aged Care Act 1997 (the Act) and
the Aged Care (Bond Security) Act 2006 (the Bond Security Act) to address
current legislative inadequacies and maintain effective regulatory
safeguards for ensuring high quality care for older Australians.
When the aged care legislation was developed ten years ago, the typical
business model adopted by aged care providers was one whereby the owner of
the facilities also operated the aged care facility. The regulatory
framework reflected the 'cottage' nature of the sector as it then was. In
recent years a different model of aged care has emerged, one in which the
owner and operator of a facility have distinct roles and responsibilities
and may function quite separately. The last decade has also seen a
significant increase in the level of investment in the sector from large
corporate entities. The regulatory framework has not kept pace with this
shift in business practice. This lack of consistency between the
regulatory framework and contemporary business practice means that the
legislation has not been able to be applied equally to all approved
providers regardless of their corporate structure.
The shortcomings of the existing regulatory framework are varied, impacting
upon care providers, care recipients and the broader community. Under the
current legislation, there is limited capacity for the Secretary of the
Department of Health and Ageing (the Secretary) to consider the record of
'related entities' when making decisions about approvals. This
unnecessarily and inappropriately limits the ability of the Secretary to
make an informed assessment of a company's record in service delivery and
its suitability to be approved to deliver care in the future. The Bill
addresses this issue, to provide better protection for residents and
promote public confidence.
Similarly, under current arrangements, those 'pulling the financial
strings' may not be considered 'key personnel' for the purposes of
regulatory scrutiny. Proposed amendments to the range of people considered
to be an approved provider's 'key personnel' will enable an examination of
all relevant people, and will ensure that the legislation applies
consistently to all approved providers.
Another feature of the sector in 2008, not envisaged in the 1997
legislation, relates to the provision of a broad range of aged care
services within the one facility. Increasingly developers are putting aged
care, retirement villages and sometimes disability or step down care all in
the same development, giving rise to uncertainty relating to the regulatory
reach of the Act. Changes to the regulatory and administrative framework
will clarify that only the aged care services are regulated under the Act.
In recent years there has been significant growth in the value of
accommodation bonds held by aged care providers. As at 30 June 2007,
around 970 approved providers (75% of all approved providers) held
accommodation bonds, with a total value of $6.3 billion. It is very
important in terms of consumer confidence, and to maintain and increase the
level of corporate investment into the sector, that the regulatory
framework that governs these financial arrangements is as robust as
possible. Proposed amendments will ensure that accommodation bonds (or
like payments) that have been paid by care recipients for entry into aged
care services are fully protected under the Accommodation Bond Guarantee
Scheme (the Guarantee Scheme) and that residents in similar circumstances
are accorded similar protections. Since the introduction of the Guarantee
Scheme in 2006 (which guarantees the refund of bonds in the event that an
approved provider becomes insolvent), experience has highlighted some areas
in which the protections for residents could be strengthened. The Bill
amends both the Act and the Bond Security Act to improve the operation of
the Guarantee Scheme.
The Bill also clarifies that the key responsibility of the Secretary when
considering the imposition of sanctions on an aged care provider is to
protect the health, welfare and interests of current and future care
recipients.
In addition, feedback from the sector reflects a level of dissatisfaction
with the complexity and number of assessments required of an individual's
care needs, by Aged Care Assessment Teams. Some assessment points required
in the existing process have been identified as being unnecessary or
administrative in nature. The proposed amendments contained in this Bill
will streamline assessments of older Australians, so as to enable more
timely, consistent and quality assessments for aged care.
The proposed amendments will also make some minor, operational changes to
improve the administration of the legislation so that it operates more
efficiently and effectively.
FINANCIAL IMPACT STATEMENT
No net impact on budget.
REGULATION IMPACT STATEMENT
1. Purpose and background
The aged care legislation provides the regulatory framework for
Commonwealth Government funded aged care providers and provides protection
for aged care recipients. The purpose of this Regulation Impact Statement
(RIS) is to identify the best means by which to:
. maintain effective regulatory safeguards;
. ensure high quality care for frail older Australians;
. promote public confidence in the aged care system;
. provide a regulatory framework that is appropriate in an evolving
corporate environment; and
. ensure, as far as practicable, that the financial interests of care
recipients are protected.
2. Problem
Some of the specific problems that have given rise to the Government
identifying the need for reforms to the regulatory framework for aged care
include the following:
a) Regulation of approved providers
- Linking approved provider status to an allocation of places -
Currently an entity can be an 'Approved Provider' despite not yet
having been allocated any Australian Government funded aged care
places. This can give rise to uncertainty regarding the protections
provided to care recipients and the rights and responsibilities of the
approved provider. It also allows an entity to hold itself out as
being 'approved' despite not having been allocated places and not
being subject to the same level of scrutiny under the Act as those
providers with allocated places.
- Ongoing suitability of approved provider - The problem is that the Act
has been written assuming that, in most cases, the entity approved as
an approved provider would have all the necessary skills to directly
deliver the care services. However, there have been at least two
examples of large financial institutions with no aged care experience
purchasing large numbers of services and engaging management companies
to manage those services. If an applicant for approved provider status
is reliant on a management company to demonstrate that it has skills
and experience in aged care, then there can be risks to residents if
the management company withdraws its services and the approved
provider no longer has the expertise to manage care. This could have
a significant impact on an organisation's capacity to provide aged
care and could pose risks for care recipients.
- Considering the record of related entities - The allocation or
transfer of places or approval of extra service status requires the
Secretary to consider the record of the approved provider including
the record in relation to each of the services operated by the
approved provider. The Act was written to reflect the expectation
that related aged care services will be owned and managed by a single
approved provider. However, in recent times, the nature of the
industry has changed and some organisations have created new approved
provider entities for each service. This limits the capacity of the
Department to take into account the performance record of other
services that have key personnel in common with the service under
consideration.
- Clarifying key personnel - Currently approved providers are required
to identify key personnel as part of establishing their suitability,
and notify the Department about changes in key personnel. Key
personnel are defined in the legislation according to the
organisational role performed. As business structures have changed it
has become more likely that control may be exercised over an approved
provider by a variety of individuals and organisations that may be
outside the immediate entity that constitutes the approved provider.
For example, an approved provider entity may form part of a collection
of companies managed by another company. When this occurs such people
may not be notified to the Department as key personnel despite them
having a significant impact on the operations of the approved
provider, including the quality of care and the financial viability of
the provider (directly impacting on the security of accommodation
bonds and security of tenure). The problem with this is that it
presents potential risks to care recipients and the Commonwealth
Government as well as meaning that certain business structures
potentially escape the scrutiny that is applied to key personnel in
other business structures.
b) Reducing the number of unnecessary assessments by Aged Care Assessment
Teams (ACAT)
- The recent Final Report of the National ACAT Review released by the
Minister for Ageing on 17 March 2008, notes that some assessments that
are currently required under the Act appear to be unnecessary or too
frequently reviewed as a matter of administration, rather than because
peoples care needs have changed. Such reassessments include the need for
an annual reassessment for residential respite care and approvals for
high level residential care. In both these instances, ongoing approvals
are usually granted upon reassessment as it is unlikely that the person
no longer requires these types of services.
c) Protection of residents' accommodation bonds
- The rationale for the bond refund requirements of the Act and the
Guarantee Scheme is to provide strong protections for consumers and
ensure high levels of confidence in the industry. There have been
examples in recent times of unanticipated outcomes from this process
which may be seen as inequitable or unfair to recipients of aged care
services. For example the Guarantee Scheme does not cover lump sum
payments (substantially similar to bonds) which have been paid by
residents for entry to care to an entity that is not an approved provider
at the time of the payment but which subsequently becomes an approved
provider. This lack of coverage gives rise to several problems. In the
event that the approved provider enters into liquidation, the
Commonwealth Government is not able to repay those particular residents'
lump sums through the Guarantee Scheme. Although the situation does not
occur frequently, different outcomes for residents who have made very
similar payments (but for the timing of the payments) and have been
subject to other aged care protections, is considered inequitable and
would potentially reduces consumer confidence in the security of their
payments.
3. Objectives
The objectives are to:
. address current legislative inadequacies in order to maintain effective
regulatory safeguards for ensuring high quality care for frail older
Australians and promoting public confidence in the aged care system. In
particular:
. in relation to the regulation of approved providers, the objectives are
to:
o clarify who is, and who is not, covered by the regulation of the
Act which will improve certainty for residents and providers;
o ensure that, where approved providers are dependent on a management
company for their expertise, the appropriate expertise is
maintained; and
o ensure that requirements relating to key personnel and
consideration of applicants for approvals are appropriate in an
evolving corporate environment.
. in relation to ACAT assessments:
o minimise unnecessary assessments so as to ensure more timely,
consistent and quality assessments of older people and provide
ACATs with the ability to focus their attention on the clients most
in need of their services.
. in relation to protection of resident's accommodation bonds:
o ensure, as far as practicable, that the financial interests of care
recipients are protected and that residents in similar
circumstances are accorded similar protections under the Guarantee
Scheme.
4. Options
Option A: Do nothing
Option B: Reform the legislation such that it better reflects the nature
of the industry, better protects residents and more effectively and
efficiently regulates the provision of services.
Option B would involve amending the Aged Care Act 1997 (the Act) and
related legislation including the Aged Care (Bond Security) Act 2006 (the
Bond Security Act such that:
. only those entities that have been approved as approved providers and
have an allocation of places would be regulated under the Act. This
would be achieved by linking approved provider status to an allocation
of places so that an entity cannot be an approved provider in respect
of a service unless they have aged care places as the result of
allocation by the Department or transfer from another provider.
Approved provider status will not take effect until the entity
receives places and the status would only take effect in respect of a
specific service for which an entity has an allocation of places.
Those existing entities that are approved providers without
allocations would cease being approved providers six months after the
commencing day, unless they receive an allocation of places during
that time;
. where approved providers are dependent on a management company for
their expertise the appropriate expertise must be maintained (and only
changed with the agreement of the Secretary). This would mean that if
the applicant is approved as an approved provider, the Secretary may,
by written notice given to the applicant at the time the applicant is
notified of the approval, specify the circumstance that the Secretary
is satisfied materially affects the applicant's suitability to provide
aged care (eg dependence on a management company for expertise). The
Secretary would then specify the steps to be taken by the applicant to
notify the Secretary and obtain his or her agreement before there is
any change to that circumstance. Flexibility would be adopted in
cases where it was not possible for the approved provider to provide
prior notification (for example, if the management company withdraws
its services without notice) and it is expected that the approved
provider and the Department would work together co-operatively to
identify alternatives which would enable quality care to continue to
be provided to residents without interruption;
. the class of key personnel would be expanded to include anyone who has
authority or responsibility for (or significant influence over)
planning, directing or controlling the activities of the approved
provider. This would include directors (in the case of bodies
corporate) and members of the governing body (in the case of entities
that are not bodies corporate). Guidance would also be provided by
the Department to detail examples of the types of persons that the
Department would expect to be notified to the Department as key
personnel;
. in considering applications for various approvals under the Act, the
Secretary may take into account the performance of other approved
providers that have (or have had) key personnel in common with the
applicant. The Secretary would look at the conduct of that entity as
a provider of aged care, and its compliance with its responsibilities
as such a provider;
. in relation to ACAT assessments, unnecessary assessments would be
minimised by preventing certain approvals from lapsing after 12 months
and allowing them to continue indefinitely (reducing the number of
unnecessary assessments which are inconvenient for care recipients and
costly for government). This would specifically apply to approvals
for high care and respite residential care because in these cases, the
care needs of recipients are less likely to change over time (and if
they do the ACAT team can be called in to undertake a reassessment).
Amendments would also be made to Principles so that people approved
for Extended Aged Care at Home (EACH) or EACH Dementia would also be
eligible to receive Community Aged Care Packages (again minimising
unnecessary assessments).
. in relation to protection of residents' accommodation bonds:
o unregulated lump sums paid to an existing approved provider
(i.e. those approved providers in existence at the commencement
of the amendments) prior to them becoming an approved provider
would be protected by the Guarantee Scheme;
o any new approved provider (who becomes an approved provider
after the commencement of amendments) would be required to
refund any unregulated lump sums upon the allocation of places.
The approved provider could then charge bonds or accommodation
charges in place of such unregulated lump sums;
o responsibilities in relation to repayment of bond and entry
contribution balances would survive the lapsing or revocation of
approved provider status and the Guarantee Scheme would apply in
respect of such amounts.
It is also proposed that other minor technical amendments be made to the
Act to address anomalies and unintended consequences as outlined in the
summary of amendments at Attachment B. Each of these is of a minor,
technical nature and is not expected to have any significant impacts on
approved providers, care recipients or government. This RIS does not
therefore detail the impacts of these minor changes.
5. Impact Analysis
The following groups are considered to be the key groups or bodies
potentially affected by the options outlined below:
. approved providers of aged care - there are currently approximately 1,800
approved provider of aged care in Australia;
. recipients of aged care services - there are currently 218,000 care
recipients in operational Commonwealth Government funded aged care
places; and
. Government - the Commonwealth Government funds aged care and regulates
approved providers of Commonwealth Government funded aged care.
6. Summary of Impact of Regulatory Changes
Option A: Do nothing
Aged care providers:
a) Regulation of approved provider - Maintaining a legislative framework
that contains the identified shortcomings and anomalies inherent
within it would pose a risk in terms of confidence and certainty in
the sector. This risk outweighs any minor short term benefit the
industry may gain by avoiding costs associated with transition to any
new requirements. Entities would continue to be able to hold
themselves out as being 'approved' despite not having been allocated
places and not being subject to the same level of scrutiny under the
Act as those who receive Commonwealth Government funding. This could
adversely impact consumer confidence in the industry with attendant
disadvantages for approved providers and government
b) ACAT - If the unnecessary reassessments are not addressed, the long
waiting times for some older Australians to be assessed and approved
for care services would continue, which would not be sustainable given
the increasing demand for assessment services. This situation causes
unnecessary complexities for providers, who rely on the assessment to
establish a person's eligibility for care, and the level of care for
which they are approved. This can lead to additional costs (i.e.
providers unable to accept a care recipient where there is a vacancy)
and creates uncertainty for approved providers from a planning
perspective.
c) Accommodation bonds - The Guarantee Scheme would continue to not cover
lump sum payments which have been paid by residents for entry to care
to an entity that is not an approved provider at the time of the
payment but which subsequently becomes an approved provider, which
gives rise to continued risks for consumers and inequities in the
process. The advantage to approved providers of existing arrangements
is that by the Guarantee Scheme being unintentionally narrow, the
potential call on approved providers by virtue of the imposition of a
levy to recover any costs unable to be recovered from an insolvent
approved provider through the existing Aged Care (Bond Security) Levy
Act 2008 is somewhat limited.
Care recipients:
a) Regulation of approved provider - Retention of the status quo presents
a disbenefit to care recipients. There would continue to be
uncertainty regarding the protections provided to residents who are
residents of aged care services that are operated by entities that are
approved by the Commonwealth Government but do not receive
Commonwealth Government funding. Consumers would also remain unaware
of the associated reductions in or removal of protections provided
under State-based legislation where an entity is an approved provider
(so not covered by some State legislation) but also not fully
regulated by the Act because the entity does not have an allocation of
places.
b) ACAT - If the unnecessary reassessments continue the long waiting
times for some older Australians to be initially assessed and approved
for care services would also continue. This can lead to a situation
whereby the needs of recipients are not met in a timely fashion. For
frail, older Australians appropriate care and intervention is
particularly imperative. Delays in access to a residential care
facility can also result in care recipients remaining in hospital
longer than is desirable for both their personal wellbeing and when
considering the health needs of the wider community. Unnecessary
assessments are also an inconvenience for care recipients.
c) Accommodation bonds - The present arrangement is inequitable as a
situation can arise whereby a consumer pays a lump sum to a provider
prior to them becoming an approved provider. In these circumstances
the Guarantee Scheme does not cover those payments, despite the fact
that the provider subsequently becomes an approved provider and is
covered by other aged care protections. This places those consumers
at a disadvantage because they are not covered under the Guarantee
Scheme and also means those consumers are at a disadvantage relative
to other care recipients who paid their bonds after the provider was
approved and so have coverage under the Scheme.
Government:
a) Regulation of approved provider - The regulatory reach of the
Department would continue to be inconsistent. The Department would
continue to have regulatory capacity with respect to providers not
receiving funding, which was not the intention of the regulatory
scheme. The capacity of the Department to, for example, take into
account the performance record of other aged care services that have
the same key personnel as a service under consideration for approval
or for the allocation or transfer of places, may be limited. The
Department would also continue to have limited capacity to monitor or
approve significant changes to an approved provider which may directly
influence quality of care. This presents risks to the Government as
the result of being unable to properly regulate approved provider in
order to minimise risks to care recipients.
b) ACAT - The inefficiencies identified within the assessment process
relating to unnecessary assessments would be maintained and the
stakeholder concerns about the timeliness of assessments would remain
unaddressed. The unnecessary costs incurred by Government from
funding unnecessary assessments would also continue to be incurred.
c) Accommodation bonds - Maintenance of the status quo would mean the
Government's capacity to protect the financial interests of aged care
recipients would retain existing gaps and inequities in coverage. The
scope of the Guarantee Scheme would remain as not entirely consistent
with the objectives of the Act. From a Government perspective this
situation potentially undermines confidence in the system and also
risks exposure of Government to ex-gratia payments to disaffected
individuals (in lieu of payments made under the Guarantee Scheme which
are recoverable from the insolvent approved provider or other approved
providers).
Option B: Reforming the legislation such that it better reflects the
nature of the industry, better protects residents and more effectively and
efficiently regulates the provision of services.
Aged care industry:
a) Regulation of approved provider - A key element of the proposed
amendments is the linking of approved provider status to the allocation
of funded aged care places. Clarifying which providers are subject to the
regulatory framework and which ones are not, provides greater certainty
for approved providers. The costs associated with this proposed change
are expected to be low and limited to indirect costs associated with
industry familiarising themselves with the new arrangements rather than
any significant direct costs.
At the time of application for various approvals, providers will need to
give the Department additional information about other entities that
share (or shared) key personnel with the provider. This will have a
small associated regulatory cost. However, it will also ensure a more
even playing field, by enabling the Department to consider the record of
other entities, regardless of the corporate structure adopted by the
applicant or the other approved providers. Overall, this option is
likely to have a minor impact on existing providers but may have an
adverse impact on approved providers who have structured their business
affairs to avoid key elements of the regulatory framework (though there
is no evidence to suggest that his has occurred).
In relation to the expansion of key personnel, some approved providers
already correctly classify Directors (and others involved in management)
as key personnel, so the proposed change will have no impact on those who
already do so. However for those who do not, this is likely to impose
costs on such approved providers, as the result of the requirement to
notify these additional people and confirm they are not disqualified
individuals. It is expected that initially this could have a medium
impact on the sector but overall costs are expected to be small.
Guidance provided by the Department about the types of people expected to
be notified would also be expected to provide greater clarity and
minimise any necessary compliance costs.
b) ACAT - This is likely to have a large positive impact on approved
provider because it will make the assessment process significantly more
efficient and lead to a significant reduction in assessment waiting
times. As outlined above, given that most approved providers manage their
own waiting lists and undertake their own planning processes, this
improvement in the efficiency of the ACAT system is welcomed by the
provider sector because it increases certainty and reduces costs.
c) Accommodation bonds - By guaranteeing a wider range of payments (ie:
unregulated lump sums) the aged care industry could be exposed to
increased costs should a levy be imposed as a result of the Commonwealth
Government being unable to recover such lump sums from an insolvent
approved provider. However, the new arrangements are likely to have a
low impact as they ensure no new lump sums (other than accommodation
bonds) will be allowed to be held by new approved provider (so there is
no increasing liability) and the number of lump sums held by existing
approved providers is very low, and is expected to diminish over time (as
residents leave homes). Therefore the impact on any levy is expected to
be negligible. There is also expected to be an indirect benefit to
providers as the result of increased consumer confidence in the security
of bonds and lump sums.
Care recipients:
a) Regulation of approved provider - Care recipients are expected to
benefit from better regulation of approved providers. There will be
greater protection for care recipients by ensuring that the intent of the
existing provisions (to enable scrutiny of the key decision makers and
management of an approved provider in order to protect care recipients)
is maintained despite changes to the operating environment of providers.
In circumstances where a management company is retained by an applicant
for approved provider status (in order to demonstrate that it has skills
and experience in aged care), the limitations of the existing regulatory
framework are such that anappropriate level of regulatory scrutiny of
providers is not able to be applied. This level of exposure currently
experienced by care recipients will be removed by the proposed
amendments, which presents a significant benefit to consumers.
As noted above, there may be some minor increases in regulatory costs for
providers arising from the new amendments. However, given the costs are
very small, if these associated regulatory costs are passed on to
consumers, the impact of that will also be minimal.
b) ACAT - These proposals will remove many unnecessary reassessments from
the assessment system so that reassessments are conducted only on the
people that genuinely need them. This should lead to a significant
reduction in assessment waiting times. This has benefits to consumers
who avoid the need for reassessment when their care needs have not
changed and increases the likelihood of a timely assessment when they
need care or their needs have changed. This change is therefore expected
to have a large positive impact on care recipients.
c) Accommodation bonds - For residents, the amendments ensure greater
protections in the event that their approved provider becomes insolvent
and the Guarantee Scheme is activated. The proposed changes remove
inequities and confusion in the system which currently allow the funds of
consumers within the same facility to be treated very differently (i.e.
if they have paid an unregulated lump sum they are not protected by the
Guarantee Scheme, whereas, if they paid a bond they are). For residents
in homes operated by an entity that subsequently become an approved
provider after the commencement of the changes, unregulated lump sums
will be required to be refunded and residents may be asked to pay a bond
in place of the lump sum. The benefit of this to the consumer is that
the new bond will be subject to all the protections of the Act and the
Guarantee Scheme. This is not expected to have any adverse impact on care
recipients as Government will require that the new bond agreements must
not be less advantageous for the resident. Given the low probability of
the Guarantee Scheme being activated through insolvency of a new approved
provider, the actual impact of this amendment is expected to be small;
however, increased confidence in the system could have a more significant
(but immeasurable) impact.
Government:
a) Regulation of approved provider - By ensuring the regulatory framework
reflects the changing nature of the sector, the proposed amendments
contribute significantly to the Department's capacity to meet the
objectives of the Act. Changes proposed will provide the Government with
more accurate information about those entities and individuals involved
in the delivery of aged care services.
For example, the Government's capacity to monitor changes to approved
providers' key personnel is greatly enhanced. The Department can now
develop an 'early warning' system through which Departmental officers
analyse notified changes to key personnel for potential risks to the
provision of quality care and the security of residents' bonds.
The amendments will also require the Department to take into account the
performance record of other aged care services that have the same key
personnel as a service under consideration for the allocation or transfer
of places. This better ensures that the Government has access to all
relevant information prior to making a regulatory decision and that
individuals and organisations who have a poor performance of provision of
aged care do not escape regulatory scrutiny. This reduces the risk to
Government that poor performers will enter (or continue) in the aged care
industry.
Some of the approved provider related regulatory improvements will have
cost implications for Government. For example, the scanning of notified
changes to key personnel and consequent monitoring of changes assessed as
posing a potential risk to residents' care/bonds will require additional
resources. There will also be some small additional costs in terms of
educating staff about the new regulatory approaches and changes to
systems. These small additional costs are expected to be absorbed within
existing budgets.
b) ACAT - The inefficiencies identified within the assessment process
relating to unnecessary assessments will be removed and the stakeholder
concerns about the timeliness of assessments will be addressed. There
are also clear benefits to Government because the overall number of
(costly) reassessments will be significantly reduced, freeing up ACATs to
conduct more high priority assessments. Without this, Government would
need to dramatically increase spending to ensure more timely assessments.
This reform could, however, lead to the need for systems changes across
government agencies (including Medicare Australia).
c) Accommodation bonds - the proposed amendments enable the Government to
better protect the interest of residents, particularly their financial
interests. It allows the Guarantee Scheme to operate as intended, and
provide greater regulatory certainty for the sector overall.
A summary of the impacts of the Options is at Attachment A.
7. Consultation
The reforms have been the subject of consultation with the aged care sector
through the Ageing Consultative Committee which comprises peak industry,
professional and consumer bodies. Consultation included preparation of a
consultation paper and a face-to-face meeting with the Committee on 26 June
2008. As a result of that meeting, the paper was revised and provided to
the Committee for wider distribution to stakeholders. Distribution was at
the discretion of Committee members but included some providers (both
charitable and commercial), peak bodies, consumer representatives,
consumers, and other interested parties. Eleven written submissions were
received in response to the Consultation Paper from a mix of State and
Territory Governments, providers, peak bodies and consumer representatives.
On the whole, stakeholders:
. did not support retaining the status quo (Option 1); and
. supported Option 2.
a) Regulation of approved providers - The majority of the consulted
stakeholders indicated support for the proposed changes. It was
recognised that the legislative framework needs to adapt to the
changing structure and business practices of the aged care industry.
It was also agreed that comprehensive and effective safeguards for
consumers are crucial for all stakeholders, including because this
promotes confidence in the aged care industry.
Key themes of the feedback received to date include that the proposed
changes:
. will increase the accountability and transparency of the sector.
All approved providers should be subject to the same scrutiny
regardless of their corporate structure. In other words, if the
same people manage 10 services through one approved provider entity,
then they should be subject to the same scrutiny if they manage 10
services through 10 separate approved provider entities;
. will assist in removing inequities for future aged care recipients;
. will speed up the care recipient assessment process;
. that generally the changes are timely, appropriate and necessary.
Some specific concerns were raised with respect the roll out of the
proposed changes and ensuring sufficient information is made available
to the sector. The Department is detailing all issues raised regarding
the operational elements of the proposed changes and will liaise
extensively with the sector as it transitions to the new processes.
In particular it was noted that:
. a number of approved providers already notify the Department about
Directors and people involved in financial management or the
operational management of the provider and there should be clarity
regarding who needs to be notified (the Department will develop
guidance in this regard);
. Government will need to ensure that the provisions relating to
considering the record of other approved providers are not used
incorrectly. It should be made clear that the provision only
requires the consideration and weighing up of these matters and does
not (and should not) automatically result in action (or lack
thereof) by the delegate (business rules to be developed by the
Department will ensure this); and
. it presents difficulties for an approved provider when unfunded beds
(that are part of a completely separate and private undertaking) are
captured by Commonwealth Government regulation. The amendments
would address this concern by more clearly delineating when an
organisation is subject to Commonwealth Government regulation and
when it is subject to State or Territory legislation. However, it
was also noted that approved providers will need to define their
service to ensure only aged care is captured by these provisions.
b) ACAT - Like the reforms to the approved provider arrangements, there
was broad support from stakeholders for action to increase the
efficiency of the ACAT process. Overall the sector considers waiting
lists and times to be unsuitably long, and that some of the identified
reassessments currently required are unnecessary and not required or
desired by care recipients.
c) Accommodation bonds - Stakeholders noted that any amendments should
ensure that retirement villages were not unintentionally caught by the
Guarantee Scheme and that extending the coverage of the Guarantee
Scheme doesn't encourage unscrupulous individuals. These matters are
proposed to be addressed through the amendments and explanatory
materials.
8. Conclusion and preferred option
The major disadvantage of Option 1 (status quo) is that it does not address
the problems identified in this RIS.
Option 2 addresses the problems identified and is therefore the preferred
option. Specifically:
. it ensures the Department has the powers necessary to protect aged care
residents;
. it strikes a balance by allowing beneficial investment in aged care (and
not unnecessarily impeding commerce or reducing confidence or
investment);
. it provides clarity and regulatory and consumer certainty with regard to
which approved providers are subject to Commonwealth Government
legislation and which are not. (Only approved providers that have an
allocation of Australian Government funded aged care places will be
approved, and they will only be approved in relation to the services for
which they have funded places);
. the changes in reassessment requirements should lead to a significant
reduction in assessment waiting times; and
. it will address unexpected outcomes that have been identified following
experience with the operation of the bond security legislation and the
Guarantee Scheme, which may be seen as inequitable or unfair to some care
recipients of aged care services.
9. Implementation and review
It is proposed that the changes take effect on 1 January 2009 but that
there be a further 6 month transitional period for existing approved
providers. This will allow the sector time to become familiar with the
revised processes and requirements leading to a smooth transition.
A comprehensive change management plan will be developed in consultation
with providers as well as other key agencies where system changes may be
required to implement the improvements. It is proposed that the
effectiveness of any changes to the legislation be monitored by the
Department including through feedback from industry and consumer bodies and
other advisory bodies such as the Ageing Consultative Committee.
ATTACHMENT A
Summary of impact of options
|Issue |Stakehold|Option 1: Status Quo |Option 2: Amend the |
| |er | |regulation framework |
|Regulation |Aged Care|Benefits: |Benefits: |
|of APs |providers|No direct advantages |Brings clarity to the |
| | |but any costs arising|regulatory environment which |
| | |from any proposed |benefits the sector as a |
| | |changes would be |whole. Increased public |
| | |avoided. |confidence in the industry as|
| | |Costs: |a whole increases business |
| | |Does not address the |and investment certainty. |
| | |problem. Ongoing |Costs: |
| | |risks to industry as |No significant costs. Some |
| | |a whole if public |minor administrative costs |
| | |confidence in the |associated with proposed |
| | |regulation of the |improvements (eg costs to |
| | |sector is diminished.|some approved providers re |
| | | |examining and notifying wider|
| | | |class of Key Personnel) |
| | | |Impact: |
| | | |Medium impact but overall |
| | | |compliance costs expected to |
| | | |be low |
| |Aged Care|Benefits: |Benefits: |
| |Recipient|No advantages |Care recipients to benefit |
| |s |Costs: |from better regulation of |
| | |Continuing |approved providers |
| | |uncertainty regarding|(minimising risk of poor |
| | |the protections for |quality of care) and clarity |
| | |residents in homes |re those providers that are |
| | |that do not receive |and are not covered by aged |
| | |Commonwealth |care legislation. |
| | |Government funding |Costs: |
| | | |No significant costs |
| | | |Impact: |
| | | |Low |
| |Australia|Benefits: |Benefits: |
| |n |No advantages |Significantly enhances the |
| |Governmen|Costs: |Department's capacity to |
| |t |Problems would not be|regulate the sector |
| | |addressed. |efficiently and thoroughly to|
| | |Regulatory framework |ensure the interests of care |
| | |will continue to less|recipients are protected. |
| | |effective and |Costs: |
| | |efficient and offer |Systematic scanning of |
| | |fewer protections to |notified changes to key |
| | |consumers than is |personnel and consequent |
| | |acceptable to |monitoring of changes |
| | |Government. |assessed as posing a |
| | | |potential risk to residents' |
| | | |care/bonds will require |
| | | |additional resources but |
| | | |these are expected to be |
| | | |absorbed in existing funding.|
| | | | |
| | | |Impact: |
| | | |Large potential benefits with|
| | | |small associated costs |
|Remove the |Aged Care|Benefits: |Benefits: |
|need for |providers|No major benefits |Provider will benefit |
|some | |Costs: |significantly from the |
|reassessmen| |Ongoing costs |improved efficiency of the |
|ts by ACATs| |associated with long |ACAT process (thru absence of|
| | |delays for assessment|delays re care recipients |
| | | |approval and clarity re level|
| | | |of care required by |
| | | |prospective residents). |
| | | |Costs: |
| | | |No significant costs. |
| | | |Impact: |
| | | |Large positive impact |
| |Aged Care|Benefits: |Benefits: |
| |Recipient|No major benefits |A significant reduction in |
| |s |Costs: |assessment waiting times and |
| | |Ongoing risks |lead to more certainty for |
| | |associated with |care recipients. |
| | |waiting times for |Costs: |
| | |assessment |None |
| | | |Impact: |
| | | |Large positive impact |
| |Australia|Benefits: |Benefits: |
| |n |No major benefits |This will allow ACATs to |
| |Governmen|Costs: |focus their attention on |
| |t |Conducting |assessments of new clients to|
| | |unnecessary |ensure that available aged |
| | |assessments imposes |care places are able to be |
| | |unnecessary direct |used and will ensure that |
| | |costs on government, |reassessments are only |
| | |and indirect costs in|conducted on the people that |
| | |terms of |genuinely need them. |
| | |administrative |Costs: |
| | |duplication and other|No significant costs. |
| | |inefficiencies. |Impact: |
| | | |Medium positive impact |
|Protection |Aged Care|Benefits: |Benefits: |
|of |providers|No advantages |Brings clarity to the |
|residents' | |Costs: |regulatory environment which |
|accommodati| |Lack of regulatory |benefits the sector as a |
|on bonds | |certainty and |whole. Increased public |
| | |identified inequities|confidence in the industry as|
| | |in the market for |a whole increases business |
| | |residential care |and investment certainty. |
| | |remain. |Costs: |
| | | |No significant costs. |
| | | |Impact: |
| | | |Low |
| |Aged Care|Benefits: |Benefits: |
| |Recipient|No advantages |Care recipients to benefit |
| |s |Costs: |from more equity, certainty, |
| | |Lack of regulatory |and most of all protection |
| | |certainty and |afforded by the Act and the |
| | |identified inequities|Guarantee Scheme. |
| | |remain. |Costs: |
| | | |No significant costs |
| | | |Impact: |
| | | |Low |
| |Australia|Benefits: |Benefits: |
| |n |No advantages |Strengthens the Guarantee |
| |Governmen|Costs: |Scheme and increases consumer|
| |t |Problems would not be|confidence in the system. |
| | |addressed. |Costs: |
| | |Regulatory framework |No significant costs |
| | |will continue to less|Impact: |
| | |effective and |Low |
| | |efficient and offer | |
| | |fewer protections to | |
| | |consumers than is | |
| | |acceptable to | |
| | |Government. | |
ATTACHMENT B
Summary of Amendments including technical and consequential amendments
Improved Regulation of Approved Providers
. Linking approved provider status to allocations of places
. Approved provider status will only take effect in respect of a service
that has an allocation of places
. 'Qualified Applicants' (who have been approved but whose approval is not
yet in force) will have 2 years to receive an allocation of places. If
they do not receive an allocation then their approval as a provider will
not take effect
. Removing the ability for an approved provider to request revocation
(consequential amendment needed because approved provider status will
automatically be revoked when an approved provider ceases having any
allocations in respect of the service)
. Removing the requirement linking approved provider status with provision
of any aged care (consequential amendment needed because approved
provider status will be linked to services with allocations)
. Providing that after 6 months any existing approved providers who do not
have allocations (and do not get them within 6 months) will
automatically cease to be approved providers (consequential amendment
to enable transition to the new system)
. Minor amendment to definition of residential care to allow the
Principles to prescribe types of care that are not residential care for
the purposes of the Act (technical amendment)
. Clarifying the range of people who are key personnel (to include people
with significant influence over the approved provider)
. Considering the record of related entities that share key personnel
. Changes relating to ongoing suitability of approved providers
(especially where a management company is relied upon)
. Allowing transfer of provisionally allocated places under exceptional
circumstances (minor amendment)
Enhanced protection of residents funds and improving the Guarantee Scheme
. Extending refund obligations to former approved providers (and
associated power to require information from former approved providers
in this regard) (technical amendment to ensure Guarantee Scheme operates
as intended)
. Increased Guarantee Scheme coverage of unregulated lump sums paid to a
care provider which then obtains approved provider status
. Increased protection for bonds taken by approved providers who
subsequently become former approved providers
. Technical changes to ensure that Guarantee Scheme operates as intended
(i.e. that it refunds outstanding amounts only and enables repayment of
amounts clawed back by a liquidator)
. Expanding obligation to give information relating to accommodation
bonds, unregulated lump sums, entry contributions etc (consequential to
changes expanding application of Guarantee Scheme)
. Enabling the Secretary to impose a condition of allocation requiring the
refund of unregulated lump sums when approved provider status takes
effect (noting that approved providers can then subsequently take bonds
in place of unregulated lump sums)
Reduction of unnecessary ACAT assessments
. The reduction of unnecessary assessments by Aged Care Assessment Teams
. Ensuring that approvals for respite care and for high care residential
care do not lapse after 12 months (reducing reassessments of people
approved for residential respite and reassessments of people living in
the community)
. Allowing people to access CACPs if approved for EACH or EACH Dementia
(Principles change only)
Other
. New sanction to ensure that the existing 'no funding for new residents'
sanction operates as intended (technical amendment)
. Changes to the matters Secretary must consider when imposing sanctions
to clarify that he/she is to also consider deterring future non-
compliance and considering whether the non-compliance threatens the
health, welfare or interests of any future care recipients (technical
amendment) and must give most weight to protecting the health, welfare
or interests of current and future care recipients
. Minor technical amendment to ensure that applicants must provide all the
necessary information in relation to the Aged Care Approval Round
. Missing Residents (Amendments mostly required to Principles - one minor
amendment to Act to enable approved provider to disclose personal
information to the Department)
. Hardship (technical amendment to enable hardship determinations to be
made for people who cannot afford to pay a full bond but are able to pay
a part bond)
. Private trusts and companies (technical amendment to ensure that private
trusts and companies are treated in the same way under the aged care
assets test as they are treated under social security and veterans
affairs legislation for the pension assets test)
AGED CARE AMENDMENT (2008 MEASURES NO. 2) BILL 2008
NOTES ON CLAUSES
Clause 1 - Short title
This clause provides that the Bill, once enacted, may be cited as the Aged
Care Amendment (2008 Measures No. 2) Act 2008.
Clause 2 - Commencement
This clause provides that the Bill, once enacted, will commence on 1
January 2009.
Clause 3 - Schedule(s)
This clause provides that each Act that is specified in a Schedule to this
Bill is amended or repealed as set out in the relevant Schedule, and any
other item in a Schedule to this Bill has effect in the way set out in the
provision. This Bill makes amendments to the Aged Care Act 1997 (the Act)
and the Aged Care (Bond Security) Act 2006 and includes application and
transitional provisions.
SCHEDULE 1-AMENDMENTS
PART 1-AMENDMENTS
Amendments to the Aged Care Act 1997
Item 1
The intent of the Act is to regulate those providers of aged care that
receive Australian Government funding.
Currently however, an entity can be an 'approved provider' despite not yet
having been allocated any Australian Government funded aged care places.
This gives rise to some specific issues of concern:
. care recipients and their families may not be aware of the limitations
of the protections afforded under the Act in the absence of allocated
places;
. there may be a reduction or removal of protections under State-based
legislation where an entity is an approved provider (so not covered by
some State legislation) but also not fully regulated by the Act because
the entity does not have an allocation of places; and
. potential difficulties for the Department of Health and Ageing acting on
non-compliance as its powers rely heavily on reducing or withholding
subsidy.
In order to address this situation, amendments are proposed to ensure that
approved provider status does not take effect until such time as the
successful applicant has an allocation of places. The approved provider
status then only takes effect in respect of services in relation to which
an allocation has been granted.
To achieve this policy intent, many minor amendments are required
throughout the Act in order to make it clear that a provider will only be
an approved provider in respect of those services for which they have an
allocation of places (be they provisional or operational, allocated
directly to the entity or acquired by transfer).
Item 1 makes the first of these changes necessary to give effect to the
policy intent.
This item repeals section 7-1 and replaces it with a new section 7-1 (Pre-
conditions to receiving subsidy) which provides that payment of subsidy
cannot be made unless the person is approved as a provider of aged care and
certain other requirements are met.
It makes clear that payments of subsidy cannot be made under Chapter 3 to a
person for providing aged care unless:
. the person is approved under Part 2.1 as a provider of aged care; and
. the approval is in force in respect of the type of aged care provided,
at the time it is provided; and
. the approval is in force in respect of the aged care service through
which the aged care is provided, at the time it is provided. An
approval will only be in force in respect of an aged care service if
there is an allocation of places to the service (refer Item 2).
Item 2
This section amends section 8-1. As with Item 1, the amendment is designed
to achieve the policy intent of ensuring that approved provider status only
takes effect in respect of services in relation to which an allocation of
places has been granted.
Section 8-1 describes the circumstances in which the Secretary must approve
a person as a provider of aged care.
Subsection 8-1(2) currently provides that the approval is in respect of all
types of aged care unless the Secretary specifies that it is limited to
certain types of care or services.
This item repeals this subsection and replaces it with a new subsection 8-
1(2) that provides that the approval is in respect of:
. either all types of aged care or specified types of aged care (this
retains the existing intent of the Act); and
. each aged care service in respect of which there is an allocation of
places - be it a provisional or operational allocation (originally
allocated or transferred). The effect of this is that an entity will
only be an approved provider in relation to those services for which
they have an allocation of places.
This item also repeals subsection 8-1(3) which currently describes the
period for which an approval is in force, and replaces it with a new
subsection 8-1(3) which provides that the approval in respect of an aged
care service begins to be in force on the first day on which the entity
receives an allocation of places in respect of a service.
As allocations can be acquired by an entity in different ways, the section
sets out these different ways (which impact on the timing for when approved
provider status takes effect in respect of a service). In summary,
approved provider status in respect of a service will take effect when:
. an allocation of a place to the person in respect of the aged care
service takes effect. This is commonly know as an allocation becoming
'operational'; or
. a provisional allocation of a place to the person in respect of the aged
care service begins to be in force (for example, when the Secretary
gives a provisional allocation to an entity); or
. a transfer day occurs for the transfer of a place under Division 16 (be
it the transfer of a provisional or operational place).
The effect of these provisions is that a person may apply for approved
provider status and may meet the tests for being an approved provider, but
their actual approved provider status will not take effect until they
acquire an allocation of places in respect of a service.
Further, the approved provider status will only take effect in respect of
those services for which the approved provider acquires an allocation of
places.
If an approved provider has been granted approval but does not acquire any
allocations in respect of any aged care services within two years (or such
longer period specified in the Approved Provider Principles), then the
approval will lapse and will never come into force.
As is currently the case, the approval is not subject to any limitation
relating to when it ceases to be in force, unless the instrument of
approval specifies otherwise (for example, the approval may specify a time
limit on the approval for a particular type of care). However, the effect
of proposed new section 10-2 (refer Item 24) is that if an approved
provider loses all of their places in a particular service then they will
automatically cease to be an approved provider in respect of that service.
Conversely, if an entity is an approved provider in respect of at least one
service then as the provider acquires allocations in respect of other new
services, they will automatically become approved providers in respect of
those new services. They will not have to keep re-applying for approved
provider status. The approved provider status will automatically expand
(by virtue of the operation of section 8-1) to encompass all of those
services for which the approved provider has an allocation of places (be
they provisional or operational).
Items 3, 5 and 6
Currently many of the approvals processes under the Act require the
Secretary to consider the record of the applicant or approved provider.
However, some business entities have been creating new approved provider
entities for each service. Despite the fact that all of the approved
providers of all of the services may have the same, or predominately the
same key personnel, the Secretary is not specifically required to take into
account the performance record of other, related approved providers who
share key personnel when making a number of decisions under the Act.
Amendments are therefore proposed to require the Secretary to take into
account whether an entity that is, or has been, an approved provider has
relevant key personnel in common with the applicant, in relation to all
decision-making points in the Act.
The first section of the Act which requires the Secretary to consider the
performance of the applicant is section 8-3 which relates to the
suitability of people to provide aged care and be approved as an 'approved
provider'. Subsection 8-3(2) currently specifies that the Secretary may
take into account the ability, experience, commitment, record and conduct
of each of the applicant's key personnel in deciding whether the applicant
is suitable to provide aged care. These qualities would normally be
evidenced by, amongst other matters, the compliance history of any other
entities of which the proposed key personnel are, or have been, key
personnel. It is intended, however, to put it beyond doubt that the
Secretary must consider these matters in deciding whether an applicant is
suitable to provide aged care.
The amendment proposed in Item 3 achieves the policy intent described
above, by amending section 8-3 to insert new paragraph 8-3(1)(ga) to
require that if the applicant has relevant key personnel in common with a
person who is or has been an approved provider, the Secretary must also
consider:
. the person's record of meeting relevant standards for the provision of
aged care (see Part 4.1);
. the person's record of commitment to the rights of the recipients of
aged care;
. the person's record of financial management, and the methods that the
person uses or used in order to ensure sound financial management;
. the person's record of financial management relating to the provision of
aged care; and
. the conduct of the person as a provider of aged care, and its compliance
with its responsibilities as such a provider and their obligations
arising from the receipt of any payments from the Commonwealth
Government for providing that aged care.
Item 6 adds new subsection 8-3(6A) to clarify what is meant by the
applicant having relevant key personnel in common with a person who is or
has been an approved provider. In summary, if the applicant has any key
personnel that are also key personnel for another approved provider (or was
previously key personnel for another approved provider or for a former
approved provider) then the Secretary must consider the performance record
of the other approved provider or former approved provider with whom the
applicant shares or shared any key personnel.
For example, if a Director of Aged Care Company A is Ms Jones (one of the
key personnel) and she is also one of the key personnel for Aged Care
Company B, the Secretary must have regard to the compliance record of Aged
Care Company B, when considering the application for approved provider
status by Aged Care Company A.
If Aged Care Company B has a poor compliance record, this will not
necessarily adversely affect Aged Care Company A's application. In
considering the record of related entities, the Secretary would have regard
to matters such as how closely the entities are related. Each case would
be considered on its merits and, where there have been compliance issues,
the Secretary would take into account the seriousness of the compliance
issue, the nature of the provider's response to the issue, and the roles
and responsibilities of the key personnel under consideration.
Item 5 makes a minor, technical, consequential amendment so that existing
subsection 8-3(6) appropriately references the new paragraph 8-3(1)(ga).
Subsection 8-3(6) deals with references to aged care within the relevant
paragraphs (including new paragraph 8-3(1)(ga)). References to aged care
include references to any care for the aged, whether provided before or
after the commencement of the section, in respect of which any payment was
or is payable under a law of the Commonwealth.
Item 4
Subsections 8-3(3) and (4) currently define key personnel (and the
qualifications of certain key personnel) for the purposes of section 8-3.
This item repeals these subsections because they are being replaced by new
section 8-3A which defines key personnel not just for section 8-2 but for
anywhere in the Act or the Principles that the term is used (refer Item 7).
This saves the term being repeated, and expressed slightly differently,
throughout the Act.
Item 7
Currently approved providers are required to identify key personnel as part
of establishing their suitability, and notify the Department about changes
in key personnel. Key personnel are defined in the legislation according
to the organisational role performed.
As business structures have changed it has become more likely that control
may be exercised over an approved provider by a variety of individuals and
organisations that may be outside the immediate entity that constitutes the
approved provider. For example, an approved provider entity may form part
of a collection of companies managed by another company.
When this occurs such people may not be notified to the Department as key
personnel despite them having a significant impact on the operations of
the approved provider, including the quality of care and the financial
viability of the provider (directly impacting on the security of
accommodation bonds and security of tenure). This presents risks to care
recipients and the Commonwealth Government as well as meaning that certain
business structures potentially escape the scrutiny that is applied to key
personnel in other business structures.
This item inserts a new section relating to key personnel.
Section 8-3A Meaning of key personnel
Despite being a new section, the individuals who are defined as key
personnel remain essentially the same as they have been, but with two
important changes to address the issue detailed above:
. the definition of key personnel now includes an explicit statement that
key personnel include any person having authority or responsibility for
(or significant influence over) planning, directing or controlling the
activities of the applicant/approved provider. This general wording is
based on the accounting standard AASB124 "Related Party Disclosures,"
which applies to most approved providers through the financial reporting
requirements associated with the Conditional Adjustment Payment; and
. currently applicants and approved providers are required to identify, as
key personnel, a member of the group of persons who are responsible for
the executive decisions of the entity at that time. New subsection 8-
3A(2) is proposed to clarify that this includes a director of a body
corporate (where the entity is a body corporate under the Corporations
Act 2001) or in other cases, a member of the entity's governing body.
New section 8-3A sets out each of the existing key personnel (previously
included in section 8-3) along with these new requirements. In summary,
each of the following is one of the key personnel of an entity at a
particular time:
. a member of the group of persons who are responsible for the executive
decisions of the entity at that time. This includes a director of a
body corporate (where the entity is a body corporate under the
Corporations Act 2001) or in other cases, a member of the entity's
governing body;
. any other person who has authority or responsibility for (or significant
influence over) planning, directing or controlling the activities of the
entity at that time;
. any person who is responsible (or is likely to be responsible) for the
nursing services provided by the service. This person must hold a
recognised qualification in nursing; and
. any person who is responsible (or is likely to be responsible) for the
day to day operations of the service, whether or not the person is
employed by the entity.
The structure of the section relating to key personnel has changed slightly
because it needs to deal with key personnel of both applicants and approved
providers (because section 8-3A now sets up the definition of key personnel
and is then used throughout the Act wherever the term is used).
This means that the definition has to address situations where the
applicants may not yet be providing aged care (so the key personnel will
include people that will likely be responsible the day to day running of
the service) as well as entities that are already providing aged care
(where the key personnel will be people that are actually responsible the
day to day running of the service). This slight change in structure and
wording (including the tense of the section) is not intended to have any
effect on who is actually required to be notified as key personnel.
Items 8 and 9
Section 8-5 requires the Secretary to notify an applicant whether they have
been approved as a provider of aged care. The section also sets out those
matters that must be included in the notice.
Items 8 and 9 amend these notice requirements so that they reflect the
changes to approved provider status whereby the approval does not come into
force until a service has an allocation of places.
These items therefore repeal paragraphs 8-5(2)(b) and (d) and replace them
with new paragraphs which require the Secretary to include in the notice
statements setting out the following matters:
. the types of aged care in respect of which the approval is given;
. a statement that the approval is in respect of those aged care services
in respect of which:
- an allocation of a place to the person in respect of the aged care
service is in effect (whether because the place was originally
allocated to the person or because of a transfer); or
- a provisional allocation of a place to the person in respect of the
aged care service is in force (whether because the place was
originally allocated to the person but the allocation has not yet
taken effect or because of a transfer);
. a statement that the approval will not come into force unless one of the
following occurs within a period of two years, or such longer period as
is specified in the Approved Provider Principles, beginning on the day
on which the instrument of approval is made:
- an allocation of a place to the person in respect of an aged care
service takes effect; or
- a provisional allocation of a place to the person in respect of an
aged care service begins to be in force; or
- a transfer day occurs for the transfer under Division 16 of a place
to the person for the provision of aged care through an aged care
service;
. if the approval specifies that it will cease to be in force on a
particular day - the day on which it will cease to be in force.
Item 10
Currently section 10-4 of the Act enables an approved provider to request
revocation of approved provider status. As the result of the changes to
approved provider status (whereby approved provider status only exists in
relation to those types of care and those services for which the entity has
an allocation of places), section 10-4 is being repealed (refer Item 27).
If an approved provider no longer wishes to be an approved provider then it
can apply to relinquish all of its places for all of its services (in
accordance with section 18-2 of the Act) and once the places have been
relinquished, it will automatically cease to be an approved provider.
Alternatively if it wishes to continue being an approved provider in
respect of some services and not others, it need only apply to relinquish
the places for the services for which it does not wish to be an approved
provider. It will automatically cease being an approved provider in
respect of those services for which it has relinquished places under
section 18-2.
The purpose of Item 10 is to make a consequential amendment to paragraph 8-
5(2)(f). Currently this paragraph requires the Secretary to notify
successful applicants for approved provider status of the circumstances in
which the approval may be suspended or revoked and the paragraph refers the
reader to sections 10-3, 10-4 and Part 4.4. As section 10-4 will no longer
describe a circumstance in which the approval can be revoked (as described
above), this item removes the reference to that section within paragraph 8-
5(2)(f).
Item 11
It has become the business practice of a number of approved providers to
engage a management company to manage the delivery of care services. If an
applicant for approved provider status is reliant on a management company
to demonstrate that it has skills and experience in aged care, the use of
the management company should be a condition of approval, unless a change
is approved by the Secretary. This is because the change to the management
company could have a significant impact on an organisation's capacity to
provide aged care and in some instances could pose risks for care
recipients and also for the Commonwealth Government.
To ensure that the applicant continues to be suitable to provide care, this
item amends section 8-5 to provide that if the applicant is approved as a
provider of aged care, the Secretary may, by written notice given to the
applicant at the time the applicant is notified of the approval, specify
any circumstance that the Secretary is satisfied materially affects the
applicant's suitability to provide aged care (proposed subsection 8-5(3)).
For example, the Secretary may specify that the retention of the management
company materially affects the applicant's suitability to provide aged
care.
The notice may specify the steps to be taken by the applicant to notify the
Secretary and obtain his or her agreement before there is any change to
that circumstance (proposed subsection 8-5(4)). Proposed subsection 8-5(5)
notes, for the purposes of the Legislative Instruments Act 2003 and the
avoidance of doubt, that a notice given to the applicant (under subsection
8-5(3)) is not a legislative instrument.
By way of example of the proposed operation of the notice provision, the
notice could state that the applicant must notify the Secretary at least 14
days prior to changing management company (if this is reasonably
practicable given the circumstances) and identify an alternative option for
the Secretary's approval in order to ensure that the provider maintains
suitability to provide care and that the interests of residents are not
jeopardised during any transition to a new management company.
Item 114 introduces a complementary amendment whereby it will be a
responsibility of the approved provider to comply with steps required in
the notice (proposed new section 63-1C).
It is important to note that neither the changes to section 8-5 nor new
section 63-1C will have any impact on existing approved providers as at 1
January 2009. However, new entities applying for approved provider status
may be impacted. This will depend on a case by case consideration of the
circumstances of the applicant for approved provider status. If the
Secretary considers that the suitability of the applicant is dependent on a
particular circumstance (e.g. the ongoing use of a particular management
company) then at the time of granting qualified applicant status, the
Secretary may chose to specify that the management company should not be
changed unless the provider has done all things reasonably practicable to
first notify, and seek the agreement of, the Secretary.
Item 12
Paragraph 8-6(2)(b) describes circumstances in which States, Territories
and local government may lose approval as a provider of aged care including
where approval is revoked under section 10-4.
As explained at Item 10, currently section 10-4 of the Act enables an
approved provider to request revocation of approved provider status. As
the result of the changes to approved provider status (whereby approved
provider status only exists in relation to those types of care and those
services for which the entity has an allocation of places), section 10-4 is
being repealed.
Item 12 therefore removes the reference to section 10-4 which is made
redundant by the repeal of that section.
Item 13
This item makes a consequential amendments to paragraph 8-6(3)(b) which
reflects changes that have been made to the location of provisions in the
Act relating to key personnel. This change does not impact on the effect
of the provision.
Item 14
Subsections 9-1(2) and (3) currently set out the definition of key
personnel for the purposes of section 9-1.
This item repeals those subsections because they are no longer necessary as
key personnel are now defined in a central definition (in new section 8-3A)
that applies to the term wherever it is used in the Act or Principles.
Item 14 inserts new subsections 9-1(2) and (3) as described below:
. subsection 9-1(1) currently requires that approved providers notify the
Secretary of a change of circumstances that materially affects the
approved provider's suitability to be a provider of aged care or a
change of any of the key personnel. Currently these notifications can
be notified over the phone, by email, as part of other correspondence
and in a variety of different forms. This can lead to confusion and can
mean that some notifications are not properly recorded. Item 14
includes a new subsection 9-1(2) which requires that the notification
must be in the form approved by the Secretary. It is proposed that the
Department will issue a standard form for use by approved providers
notifying the changes mentioned in subsection 9-1(1). This is expected
to improve the process for both providers and the Department; and
. new subsection 9-1(3) clarifies that State or Territory government
approved providers are not required to notify changes that relate to
persons who are responsible for the executive decisions of the approved
provider (this simply retains the current policy) or any other person
who has authority or responsibility for (or significant influence over)
planning, directing or controlling the activities of the approved
provider (this reflects the change to the definition of key personnel
included in new section 8-3A).
Item 15
This item inserts new subsection 9-1(3B) which requires that entities who
have applied for, and been granted, approved provider status but who do not
yet have an allocation of places (so their approved provider status is not
yet in force) must comply with the obligations in section 9-1. These
obligations require them to notify the Secretary of any of the following
changes within 28 days after the change occurs:
. a change of circumstances that materially affects the approved
provider's suitability to be a provider of aged care; or
. a change of any of the approved provider's key personnel.
As noted at Item 2, if an applicant is approved as a provider, they have
two years within which to acquire an allocation of places (which will bring
their approval as a provider into force). During this time, it is
important that they notify the changes detailed above to the Secretary
because changes in these areas could affect their suitability to be a
provider of aged care should they acquire allocations of places.
Item 16
This item makes a similar amendment to that described in Item 15. In this
case, new subsection 9-2(2A) requires that entities who have applied for,
and been granted, approved provider status but who do not yet have an
allocation of places (so their approved provider status is not yet in
force) must comply with the obligations in section 9-2. Section 9-2
provides that the Secretary may, at any time, request an approved provider
to give the Secretary such information, relevant to the approved provider's
suitability to be a provider of aged care (section 8-3), as is specified in
the request. The approved provider must comply with the request within
28 days after the request was made, or within such shorter period as is
specified in the notice.
Items 17, 18 and 19
Section 9-3A allows the Secretary to, at any time, request an approved
provider to give the Secretary specified information relating to one of the
listed topics and the approved provider must comply with the request within
28 days (or a shorter period specified in the request).
Items 17 and 18 amend this section so that it applies not just to approved
providers but also former approved providers.
Item 19 amends subsection 9-3A(1) to add to the list of topics in relation
to which the Secretary may request information. The additional topics are:
. unregulated lump sums paid to the person; and
. the amount of one or more unregulated lump sum balances at a particular
time.
This enables the Secretary to request information regarding unregulated
lump sum holdings of an approved provider or former approved provider in
the event that the Accommodation Bond Guarantee Scheme (the Guarantee
Scheme) has been activated in relation to that approved provider or former
approved provider.
Item 20
This is a consequential amendment that amends subsection 9-3A(2) to omit
'the approved provider' and substitute 'the person' so that the provision
can apply to approved providers and former approved providers.
Item 21
Item 21 makes a consequential amendment to ensure that subsection 9-3A(3)
applies to approved providers as well as former approved providers. The
item repeals the subsection and inserts a new subsection 9-3A(3) which
revises the offence so that it applies to a person rather than an approved
provider. The substance of the offence remains the same.
Item 22
Section 10-2 sets out the circumstances in which an approval as a provider
of aged care ceases to have effect. This includes if the approval is
revoked under section 10-4 (refer to paragraph 10-1(1)(b)).
As explained at Item 10, currently section 10-4 of the Act enables an
approved provider to request revocation of approved provider status. As
the result of the changes to approved provider status (whereby approved
provider status only exists in relation to those types of care and those
services for which the entity has an allocation of places), section 10-4 is
being repealed.
Item 22 therefore removes the reference to section 10-4 which is made
redundant by the repeal of that section.
Item 23
This is a consequential amendment that amends a cross-reference to
subsection 8-1(3) (within paragraph 10-1(1)(c)) so that it reflects the
revised structure and numbering of section 8-1. The amended provision
provides that an approval as a provider of aged care ceases to have effect
if the period (if any) to which the approval is limited under subsection 8-
1(5) ceases to have effect. The amendment does not make any policy change
to the section.
Item 24
Section 10-2 currently provides that if an approved provider does not
provide any aged care during a continuous period of six months, the
approval lapses on the day after the end of that period. This item repeals
this section because approved provider status will instead be linked to
whether the approved provider has an allocation of places.
This item inserts a new section 10-2 as follows.
Section 10-2 Approval lapses if no allocated places
This section provides that the approval of a person as a provider of aged
care that is in force lapses if the provider does not have any allocation
of any places.
This gives effect to the policy intent which is that approved provider
status is directly linked to allocation of places. Approved provider
status come into force with the allocation of places to a service and
lapses when there are no allocations in respect of a service.
Item 25
Subsection 10-3(1) currently provides that the Secretary must revoke an
approval if the Secretary is satisfied that:
. the approved provider has ceased to be a corporation; or
. the approved provider has ceased to be suitable for approval (see
section 8-3); or
. the approved provider's application for approval contained information
that was false or misleading in a material particular.
This item repeals existing subsection 10-3(1) and replaces it with a
subsection that is substantially the same except that it refers to
'persons' rather than 'approved providers'. This change is needed because
an entity may have been granted approved provider status but that status is
not yet in force because they have not been allocated places. In this
case, the entity is not an approved provider but needs to be covered by
section 10-3(1). Subsection 10-3(1) is therefore being amended so that it
is expressed to apply generically to 'persons' which covers any of the
types of entities to which the subsection may need to apply.
Proposed new subsection 10-3(1) provides that the Secretary must revoke an
approval of a person as a provider of aged care under section 8-1 if the
Secretary is satisfied that:
. the person has ceased to be a corporation; or
. the person has ceased to be suitable for approval (see section 8 3); or
. the person's application for approval contained information that was
false or misleading in a material particular.
Notes following the subsection draw the reader's attention to the fact that
revocation of approvals are reviewable under Part 6.1 and approvals may
also be revoked as a sanction under Part 4.4.
Item 26
This item makes consequential amendments to subsections 10-3(3), (5), (6),
(7) and (7B) to replace the term "the approved provider" (wherever
occurring) with the term "the person". This is so that the provision
(which relates to revocation of approval) applies not just to approved
providers but also to entities that have been granted approved provider
status but whose approval is not yet in force. Rather than listing these
different types of entities, item 26 amends the section to apply to
'persons' which includes both of these entities.
Item 27
This item repeals section 10-4. As noted in item 10, currently section 10-
4 of the Act enables an approved provider to request revocation of approved
provider status. As the result of the changes to approved provider status
(whereby approved provider status only exists in relation to those types of
care and those services for which the entity has an allocation of places),
section 10-4 is being repealed.
If an approved provider no longer wishes to be an approved provider then
they can apply to relinquish all of their places for all of their services
(in accordance with section 18-2 of the Act) and once the places have been
relinquished, they will automatically cease being an approved provider.
Item 28
Section 13-1 enables a person to apply for an allocation of places. The
section provides that an application is only valid if, among other things,
it is in the form approved by the Secretary.
This item makes a minor amendment to the section by inserting new paragraph
13-1(ca) which provides that the application is only valid if it is
accompanied by the statements and other information required by the form.
Items 29 and 30
Subsection 14-1(1) currently provides that the Secretary may allocate
places to a person to provide aged care services for a region, but only if
the person is an approved provider. Places must not be allocated to the
approved provider if:
. under Division 7, subsidy could not be paid to the approved provider for
care provided in respect of the places; or
. a sanction imposed under Part 4.4 is in force prohibiting allocation of
places to the approved provider.
This item amends subsection 14-1(1) and repeals 14-1(2) (replacing it with
a new subsection) which ensures that places may only be allocated to a
person who:
. is approved under section 8-1 to provide the aged care in respect of
which the places are allocated; or
. will be approved to provide aged care in respect of which the places are
allocated once the allocation takes effect or, in the case of a
provisional allocation, begins to be in force.
New subsection 14-(2A) retains the existing limitation that the places must
not be allocated to the person if a sanction imposed under Part 4.4 is in
force prohibiting allocation of places.
Items 31 and 32
These items amend subsection 14-1(4). Subsection 14-1(4) currently
provides that in order for an allocation to be made to an approved
provider, the approved provider must have made a valid application that
complies with the invitation unless the Secretary waives these
requirements.
This item makes a consequential amendment to this subsection to replace the
references to 'approved provider' with references to 'person'. This is so
that the provision applies to both approved providers and entities that
have been granted approved provider status but whose approval is not yet in
force. Rather than listing these different types of entities, these items
amend the section to apply to 'persons' which includes both of these
entities.
Items 33 to 35
Section 14-2 sets out the matters that the Secretary must consider in
deciding which allocation of places would best meet the needs of the aged
care community in a region.
Item 33 adds an additional matter for consideration in cases where the
applicant has relevant key personnel in common with a person who is or has
been an approved provider (new paragraph 14-2(1)(da)). In this case the
Secretary must consider the conduct of that person as a provider of aged
care and its compliance with its responsibilities and obligations arising
from the receipt Commonwealth Government aged care funding. Item 35
clarifies that the applicant has relevant key personnel in common with a
person who is or has been an approved provider if at the time the person
provided aged care, another person was one of its key personnel and that
other person is one of the key personnel of the applicant (new subsection
14-2(3)).
Item 34 makes a consequential amendment to subsection 14-2(2) so that it is
clear that a reference to aged care, where it occurs in either paragraph 14-
2 (1)(d) or (da), includes a reference to any care for the aged, whether
provided before or after the commencement of this section, in respect of
which any payment was or is payable under a law of the Commonwealth.
Items 36 to 41 and 44 to 51
These items amend sections within Part 2.2 (Allocation of places) to
replace the references to 'approved provider' with references to persons or
a person as the case may be.
These are consequential amendments to ensure that the provisions apply to
both approved providers and those entities that have been granted approved
provider status but whose approval is not yet in force.
The specific provisions that are being amended are subsection 14-4(1),
paragraph 14-4(1)(a), paragraph 14-4(2)(a), paragraph 14-4(3)(a),
subsection 14-5(1), paragraph 14-5(4)(c), subsection 14-6(1), subsection 14-
9(1), subsection 15-1(1), section 15-3, subsection 15-4(3), subsection 15-
4(5), subsection 15-4(6) subsection 15-4(8), subsection 15-5(1), subsection
15-5(4), subsection 15-5(6), section 15-6 and section 15-7.
Items 42 and 43
Section 14-5 provides that the Secretary may make an allocation of places
subject to such conditions as the Secretary thinks fit. Subsection 14-5(4)
lists examples of the types of matters with which the conditions may deal.
Item 42 amends subsection 14-5(4) by adding new examples of matters with
which the conditions may deal (new paragraphs 14-5(4)(e) and (f)). In
summary, the new conditions can deal with the treatment of what is known as
"pre-allocation lump sums".
In essence, a pre-allocation lump sum is an amount that is paid by a
resident to an entity for entry to the service before it becomes an
approved provider in respect of a service. A pre-allocation lump sum is an
amount that does not accrue daily, is not a bond or entry contribution and
is paid for the care recipient's entry to a residential aged care service
conducted by an entity who is not an approved provider and does not have
any places under the Act in respect of the service for which the amount was
paid.
The amendment defines a pre-allocation lump sum so that it is
distinguishable from other amounts with which the Act deals such as
accommodation bonds and entry contributions.
The amendment enables the Secretary to impose conditions in relation to:
. the treatment of any pre-allocation lump sum (or part thereof) including
the refund of the sum or part of the sum, with the consent of the care
recipient or the forgiveness of any obligation (including a contingent
obligation) in relation to the sum or part of the sum, with the consent
of the care recipient (new paragraph 14-5(4)(e)). The intent of this
provision is to enable the Secretary to impose as a condition of
allocation, a requirement that the entity to whom places are to be
allocated, refund any pre-allocation lump sums to residents. The
entity, which would become an approved provider in respect of the
service upon allocation of the places, may then be able to take a bond
in lieu of the pre-allocation lump sum; and
. the conditions and entry into force of any accommodation bond agreement
entered into as a consequence of the refund of a pre-allocation lump sum
or part of such a sum, or the forgiveness of an obligation (including a
contingent obligation) in relation to a pre-allocation lump sum or part
of such a sum (new paragraph 14-5(4)(f)). This means that the Secretary
can impose a condition to ensure that any bond agreement does not
disadvantage the resident (relative to the position that they were in
before the refund of the pre-allocation lump sum).
Item 43 adds a new subsection 14-5(5) which provides that if a condition
requires refund of a pre-allocation lump sum (or part thereof) or the
forgiveness of a contractual obligation relating to that pre-allocation
lump sum, and the care recipient continues in care in the same service,
then the care recipient and approved provider may then enter into
arrangements for payment of a bond or a charge under the Act.
The resident and the approved provider would have the same rights, duties
and obligations in relation to the taking of an accommodation bond or an
accommodation charge as they would have had, had the care recipient entered
the service on the day on which the allocation was made. It is important
to note that this is subject to any conditions imposed in relation to the
bond agreement that will ensure that the Secretary is not in a less
advantageous position as a result.
These changes will ensure that funds paid by residents' to their care
providers, that subsequently become an approved provider, are protected
under the Act and Bond Security Act. It is expected that only a small
number of entities would be affected by these conditions.
Item 52
Division 16 deals with how allocated places are transferred from one person
to another.
The effect of this item (and Item 66) is to divide Division 16 into two
Subdivisions:
. Subdivision 16-A-Transfer of places other than provisionally allocated
places; and
. Subdivision 16-B-Transfer of provisionally allocated places
Item 52 also inserts new application section 16-1A which provides that
Subdivision 16-A applies to the transfer of an allocated place, other than
a provisionally allocated place.
Items 53 and 54
These items make consequential amendments to section 16-1 so rather than
referring to allocated places generally, it refers specifically to places
to which Subdivision 16-A applies (namely the transfer of places other than
provisionally allocated places).
Item 55
Paragraph 16-1(2)(a) provides that the Secretary must approve the transfer
of a place if, and only if, an allocation of that place has taken effect
under Division 15. The effect of this is to prohibit the transfer of
provisionally allocated places (i.e. places that have not take effect under
Division 15).
This item repeals this paragraph because new Subdivision 16-B will now
allow transfer of provisionally allocated places in exceptional
circumstances.
Item 56
Subsection 16-1 deals with transfer of places. This item makes a technical
consequential amendment to paragraph 16-1(2)(d) that flows from the changes
linking approved provider status to the allocation of places.
Its effect is that the Secretary must approve the transfer of places if,
and only if, the transferee is an approved provider when the transfer is
completed in respect of the aged care service to which the places will
relate after transfer.
Items 57 and 58
These items make consequential amendments to paragraph 16-1(3)(a) and
subsection 16-2(1) so that they are specific to Subdivision 16-A (noting
that there are separate but similar provisions applying to transfers of
provisionally allocated places under Subdivision 16-B).
Item 59 and 60
Subsection 16-2(4) sets out the timeframes for making an application for
transfer of places. Items 59 and 60 make technical amendments to this
section so that the section works properly in conjunction with the changes
to when approved provider status commences (upon allocation of places).
There is no substantive change to the actual timeframes for making an
application for transfer of places.
In summary, the items amend the subsection to provide that an application
must be made:
. if the transferee has been approved under section 8-1 as a provider of
aged care (even if the approval has not yet begun to be in force) - no
later than 60 days, or such other period as the Secretary determines
under subsection 16-2(5), before the proposed transfer day; or
. if the transferee has not been approved under section 8-1 as a provider
of aged care - no later than 90 days, or such other period as the
Secretary determines under subsection 16-2(5), before the proposed
transfer day.
Item 61
Subsection 16-2(7) requires the Secretary to give written notice of his or
her decision relating to transfer of places to the transfer or and the
transferee. Item 61 amends subsection 16-2(7) to clarify that the written
notice is not a legislative instrument for the purposes of the Legislative
Instruments Act 2003. This statement is declaratory only, for the
avoidance of doubt.
Items 62, 63 and 64
Section 16-4 sets out the matters that the Secretary must consider when
deciding whether a transfer of places (other than provisionally allocated
places) is justified.
Item 62 is a consequential amendment that numbers the subsection to allow
for the new subsections created by Item 64.
Item 63 inserts two new matters that the Secretary must consider:
. if the transferee has been a provider of aged care, the Secretary must
consider its conduct as such a provider and its compliance with its
responsibilities and obligations arising from the receipt of payments
from the Commonwealth Government for providing that aged care (new
paragraph 16-4(ea)); and
. if the transferee has relevant key personnel in common with a person who
is or has been an approved provider - the conduct of that person as a
provider of aged care, and its compliance with its responsibilities as
such a provider and its obligations arising from the receipt of any
payments from the Commonwealth Government for providing that aged care
(new paragraph 16-4(eb)).
Item 64 inserts new subsections 16-4(2) and (3). New subsection 16-4(2)
clarifies that a references to aged care (within the new paragraphs
inserted by Item 63 as described above) includes a reference to any care
for the aged, whether provided before or after the commencement of this
subsection, in respect of which any payment was or is payable under a law
of the Commonwealth. This is a standard definitional provision included
in all similar sections in the Act.
New subsection 16-4(3) clarifies what is meant by the transferee having
relevant key personnel in common with a person who is or has been an
approved provider. This will be case if, at the time the person provided
aged care as an approved provider, another person was one of its key
personnel and that other person is one of the key personnel of the
transferee.
Item 65
This item makes a consequential amendment to subsection 16-8(1) so that the
subsection only applies in respect of a place to which this Subdivision
applies.
Item 66
This item inserts a new Division 16-B in the Act, dealing with the transfer
of provisionally allocated places.
Currently the process for the allocation of places transferred from one
person to another only applies to the transfer of operational places, and
not to the transfer of provisional places. The Australian Government's
goal in relation to provisional allocations is that they should be made
operational in the shortest possible time. A change of ownership does not
necessarily compromise this objective and, in some cases, may be the most
effective way of bringing a particular parcel of provisional allocations
into operation.
On the other hand, as provisional allocations are made following a highly
competitive process involving detailed proposals, and in which the
applicant's record as a provider carries significant weight, the transfer
of provisional allocations should be scrutinised to ensure the integrity of
the allocation process.
In order to address this issue, a new Subdivision is being inserted in the
Act to expressly deal with the transfer of provisionally allocated places.
As a general rule, provisionally allocated places will not be able to be
transferred unless exceptional circumstances exist.
Subdivision 16-B-Transfer of provisionally allocated places
Section 16-12 Application of this Subdivision
This new section provides that this new Subdivision applies to the transfer
of a provisionally allocated place. Subdivision 16-A applies to places
that are not provisionally allocated (also commonly known as operational
places).
Section 16-13 Transfer of provisionally allocated places
New subsection 16-13(1) provides that a transfer of a provisionally
allocated place from one person to another is of no effect unless it is
approved by the Secretary. However, new subsection 16-13(2) provides the
Secretary must not approve the transfer of a provisionally allocated place
unless:
. an application for the transfer is made under new section 16-14;
. the Secretary is satisfied that, because of the needs of the aged care
community in the region for which the places were provisionally
allocated, there are exceptional circumstances justifying the transfer;
. the Secretary is satisfied, having regard to the matters mentioned in
new section 16-16, that the needs of the aged care community in the
region for which the places were provisionally allocated are best met by
the transfer;
. the Secretary is satisfied that the transferee will be an approved
provider in respect of the aged care service to which the places will
relate after transfer, once the transfer is complete;
. the location in respect of which the place is provisionally allocated
will not change as a result of the transfer; and
. the provisional allocation is in respect of residential care subsidy.
New subsection 16-13(3) provides that if the transfer is approved:
. the transferee is taken, from the transfer day (see new section 16-19),
to be the person to whom the place is provisionally allocated; and
. if, as part of the transfer, approval is sought for variations of the
conditions of allocation, the Secretary is taken to have made such
variation of the conditions as is specified in the approval.
Section 16-14 Applications for transfer of provisionally allocated places
This new section is based on existing section 16-2, which applies to
transfer of operational places. It has been adapted to ensure that
applications contain the information necessary for the Secretary to assess
the proposed transfer of provisionally allocated places.
New subsection 16-14(1) provides that a person to whom a place has been
provisionally allocated may apply in writing to the Secretary for approval
to transfer the place. New subsection 16-14(2) provides that the
application must be in a form approved by the Secretary, include required
information, be signed by the transferor and the transferee, and set out
any variation of the conditions to which the provisional allocation is
subject for which approval is being sought as part of the transfer.
New subsection 16-14(3) specifies that the information that is required to
be included in the application is the:
. the transferor's name;
. the number of places to be transferred;
. the aged care service to which the places currently relate, and its
location;
. the proposed transfer day;
. the transferee's name;
. if, after the transfer, the places would relate to a different aged care
service - that aged care service. It should be noted that while there
will be a different service (i.e. service of transferee rather than
transferor), the location of the service will not be able to change.
New paragraph 16-13(2)(e) expressly provides that the Secretary must not
approve the transfer if the location in respect of which the place is
provisionally allocated will change as a result of the transfer;
. whether any of the places are places included in a residential care
service, or a distinct part of a residential care service, that has
extra service status, or places in respect of which one or more
residential care grants have been paid;
. if the places are included in a residential care service and, after the
transfer, the places would relate to a different residential care
service - whether that service, or a distinct part of that service, has
extra service status;
. evidence of the progress made by the transferor towards being in a
position to provide care in respect of the places;
. the day on which, if the transfer were to take place, the transferee
would be in a position to provide care in respect of the places; and
. such other information as is specified in the Allocation Principles.
New subsection 16-14(4) requires that the application must be made:
. if the transferee has been approved as a provider of aged care (even if
the approval has not yet begun to be in force) - no later than 60 days
(or such other period as the Secretary determines under new subsection
16-14(5)) before the proposed transfer day; or
. if the transferee has not been approved as a provider of aged care - no
later than 90 days (or such other period determined by the Secretary
under new subsection 16-14(5)) before the proposed transfer day.
Under new subsections 16-14(5) and (6) the Secretary may, at the request of
the transferor and the transferee, determine another period if satisfied
that it is justified in the circumstances. In deciding this Secretary must
consider any matters set out in the Allocation Principles.
New subsection 16-14(7) requires that the Secretary must give written
notice of his or her decision to the transferor and the transferee. The
notice is not a legislative instrument for the purposes of the Legislative
Instruments Act 2003. This statement is declaratory only, for the
avoidance of doubt.
New subsection 16-14(8) provides that if the information included in an
application changes, the application is taken not to have been made under
this section unless the transferor and the transferee give the Secretary
written notice of the changes.
Section 16-15 Requests for further information
This section is based on existing section 16-3, which applies to transfer
of operational places.
New section 16-15 applies to transfer of provisional allocations. New
subsection 16-15(1) provides that if the Secretary needs further
information to determine the application, the Secretary may give to the
transferor and the transferee a notice requesting that:
. either the transferor or the transferee give the further information
within 28 days after receiving the notice; or
. the transferor and the transferee jointly give the further information
within 28 days after receiving the notice.
By the operation of new subsection 16-15(2), the application is taken to be
withdrawn if the further information is not given within the 28 days,
however the period for giving the further information can be extended in
accordance with section 96-7.
Section 16-16 Consideration of applications
New subsection 16-16(1) provides that in considering whether the needs of
the aged care community in the region for which the places were allocated
are best met by the transfer, the Secretary must consider each of the
following matters:
. whether the transfer would meet the objectives of the planning process
(set out in section 12-2). These objectives are:
- to provide an open and clear planning process; and
- to identify community needs, particularly in respect of people with
special needs; and
- to allocate places in a way that best meets the identified needs of
the community;
. whether the transferor has made such significant progress towards being
in a position to provide care, in respect of the places, that it would
be contrary to the interests of the aged care community in the region
not to permit the transfer;
. whether the transferee is likely to be in a position to provide care in
respect of the places within a short time after the transfer;
. the standard of care, accommodation and other services proposed to be
provided by the aged care service in which the places would be included
if the transfer were to occur;
. the suitability of:
- the transferee to provide the aged care to which the places to be
transferred relate;
- the premises proposed to be used to provide care through the aged
care service in which the places would be included if the transfer
were to occur;
. if the places were allocated to meet the needs of people with special
needs - whether those needs would be met once the allocation of the
places to be transferred took effect;
. if the places were allocated to provide a particular type of aged care -
whether that type of aged care would be provided once the allocation of
the places to be transferred took effect;
. if the transferee has been a provider of aged care - its conduct as such
a provider, and its compliance with its responsibilities as such a
provider and its obligations arising from the receipt of any payments
from the Commonwealth Government for providing that aged care. New
subsection 16-16(2) makes clear that 'aged care' in this context
includes any care for the aged (whether provided before or after the
commencement of the section) in respect of which any payment was or is
payable under a Commonwealth law;
. if the transferee has relevant key personnel in common with a person who
is or has been an approved provider - the conduct of that person as a
provider of aged care, and its compliance with its responsibilities and
obligations arising from the receipt of Commonwealth Government payments
for providing that aged care. New subsection 16-16(3) clarifies that:
- the transferee has relevant key personnel in common with a person
who is or has been an approved provider if, at the time the person
provided aged care, another person was one of its key personnel that
other person is one of the key personnel of the transferee;
- 'aged care', in this context, includes any care for the aged
(whether provided before or after the commencement of the section)
in respect of which any payment was or is payable under a
Commonwealth law;
. the financial viability, if the transfer were to occur, of the
transferee and the aged care service in which the places would be
included if the transfer were to occur;
. the measures to be adopted by the transferee to protect the rights of
care recipients; and
. any matters set out in the Allocation Principles.
A note to the section reminds readers that the Secretary must not approve
the transfer if the location in respect of which the place is provisionally
allocated will change as a result of the transfer (see new paragraph 16-
13(2)(e)).
This section is similar to section to section 16-4 but has been adapted so
that it is specific to the transfer of provisionally allocated places.
Section 16-17 Time limit for decisions on applications
New subsection 16-17(1) provides that the Secretary must, at least 14 days
before the proposed transfer day approve or reject the transfer and notify
the transferor and transferee accordingly (this is a reviewable decision
under Part 6.1). However, new subsection 16-17(2) allows that the
Secretary may make a decision on a later day if the transferor and the
transferee agree, provided that this later day does not occur on or after
the proposed transfer day.
New subsection 16-17(3) provides that if the Secretary is given written
notice (the alteration notice) under new subsection 16-14(8) of changes to
the information contained in the application and this is given within 30
days of the day by which the Secretary must act, the Secretary is not
obliged to act until the end of the 30 day period following the day on
which the alteration notice was given by the Secretary.
This section is based on section 16-5 which applies to transfer of places
other than provisionally allocated places.
A note to the section reminds readers that the rejection of applications is
reviewable under Part 6.1.
Section 16-18 Notice of decision on transfer
This new section provides that if the transfer is approved, the notice must
include statements setting out:
. the number of places to be transferred;
. the proposed transfer day;
. the aged care service to which the places currently relate, and its
location;
. if, after the transfer, the places will relate to a different aged care
service - that aged care service. A note at the end of the section
reminds readers that the Secretary must not approve the transfer if the
location in respect of which the place is provisionally allocated will
change as a result of the transfer (see new paragraph 16-13(2)(e));
. the proportion of care, in respect of the places to be transferred, to
be provided once the allocation takes effect, to people with special
needs; supported, concessional or assisted residents; recipients of
respite care; people needing a particular level of care; or people
specified in the Allocation Principles;
. such other information as is specified in the Allocation Principles.
This section is based on section 16-6 which applies to transfer of places
other than provisionally allocated places.
Section 16-19 Transfer day
New subsection 16-19(1) provides that the transfer day is the proposed
transfer day specified in the application.
New subsection 16-19(2) requires that if the transfer is not completed on
or before the proposed transfer day, the transferor and the transferee may
apply, in writing, to the Secretary to approve a day as the transfer day. A
note to this subsection makes clear that, because the proposed transfer day
must be specified in the application for transfer, the Secretary must be
notified if the transfer is not completed on or before the proposed
transfer day.
New subsection 16-19(3) sets out that the Secretary must, within 28 days
after receiving the application approve or reject the application and
notify the transferor and the transferee accordingly. A note to this
subsection reminds readers that such a decision is reviewable under Part
6.1.
New subsection 16-19(4) provides that the day approved by the Secretary as
the transfer day must not be earlier than the day on which the transfer is
actually completed.
This section is based on section 16-7 which applies to transfer of places
other than provisionally allocated places.
Section 16-20 Transfer of places to service with extra service status
This new section provides that, as a general rule, the Secretary must not
approve the transfer of a provisionally allocated place if the transfer
would result in residential care being provided by a different residential
care service where that residential care service has, or a distinct part of
that service has, extra service status.
A note to new subsection 16-20(1) reminds readers that the Secretary must
not approve the transfer if the location in respect of which the place is
provisionally allocated will change as a result of the transfer (see new
paragraph 16-13(2)(e)).
However, new subsections 16-20(2) and (3) provide that the Secretary may
approve a transfer in those circumstances if the Secretary is satisfied
that:
. the places other than the transferred places could, after the allocation
has taken effect, form one or more distinct parts of the residential
care service concerned (noting that the transferred places would not
have extra service status because of the operation of section 31-3); or
. granting the transfer would be reasonable, having regard to the criteria
set out in section 32-4 and would not result in the maximum proportion
of extra service places under section 32-7, for the State, Territory or
region concerned, being exceeded; and any other requirements set out in
the Allocation Principles are satisfied. A note draws readers attention
to the fact that the places would have extra service status because of
the operation of section 31-1 (section 31-3 would not apply).
Section 16-21 Information to be given to transferee
This new section provides that the Secretary may give to the transferee
information specified in the Allocation Principles at such times as are
specified in those Principles.
Items 67 and 68
These items amend subsection 18-1(1), which sets out the circumstances in
which allocation of places ceases to have effect, to include when the
person to whom the place is allocated ceases to be an approved provider.
This gives effect to the policy intent which is the alignment of approved
provider status with the allocation of services to a particular service.
If a provider ceases to be an approved provider then the allocation of
places to that entity will also automatically cease to have effect.
Items 69 and 70
The Final Report of the National ACAT Review, released by the Minister for
Ageing on 17 March 2008, notes that some assessments of care recipients for
eligibility for aged care are unnecessary or too frequently reviewed as a
matter of administration, rather than because people's care needs have
changed.
These reassessments include the need for an annual reassessment for
residential respite care and high level residential care. In both these
instances, ongoing approvals are usually granted upon reassessment as it is
likely that the person will continue to need the level and type of care
approved.
In order to address this issue and reduce the number of unnecessary
reassessments (both of which are resource intensive for Government and
inconvenient for care recipients), Items 69 and 70 amend section 23-3 which
relates to the lapsing of approvals for these types and levels of care.
The addition of new subsection 23-3(1A) provides that a person's approval
does not lapse under subsection 23-3(1) (if the person is not provided with
the care in respect of which he or she is approved) if:
. the care in respect of which he or she is approved is limited to
residential care provided as respite care. This means that approval for
residential respite care will not lapse but could expire if time
limited. However, reassessment should occur at any stage if there has
been a change in the care recipient's care needs;
. if the approval is for residential care other than residential care
provided as respite care and the care in respect of which he or she is
approved is not limited to a low level of residential care. In other
words, if the person is eligible for high level residential care then
their approval will not lapse. This acknowledges that the care needs of
a person approved for high level care are unlikely to diminish and that
the Act already makes provision so that a person approved for high level
residential care is able to access residential care at any level; or
. if the care in respect of which he or she is approved is flexible care -
the care is specified in the Approval of Care Recipients Principles.
This will allow certain types of flexible care to be non-lapsing such as
Extended Aged Care at Home (EACH) or EACH Dementia (EACHD). This
acknowledges that the care needs of a person approved for EACH or EACHD
(assessed as equivalent to high level residential care) are unlikely to
diminish.
Approvals for care, either in the community or in a residential setting,
that have been limited to a low level will continue to lapse after 12
months. This means that approvals for these types of care should be less
than 12 months old at the point of entry to low level residential care or
at the commencement of the provision of community care services.
Other minor amendments include the substitution of the heading to section
23-3, and the insertion of a subheading to subsection 23-3(1)
Item 71
This is a consequential amendment that results from the new provisions
relating to the transfer of provisionally allocated places (new Subdivision
16-B).
In summary, section 31-3(1) currently provides that if places are allocated
or transferred to a service that has extra service status and the
allocation or transfer was in accordance with subsection 14-7(2) or 16-
8(2), the allocated or transferred places are taken not to have extra
service status.
This item simply amends this paragraph 31-3(1)(b) so that it not only
references subsection 16-8(2) (which relates to transfers of places other
than provisionally allocated places) but also subsection 16-20(2) (which
relates to transfers of provisionally allocated places).
Items 72 to 75
Section 32-4 describes the criteria that must be satisfied in order for the
Secretary to approve applications for extra service status.
Consistent with the changes made in relation to other approval points
throughout the Act, Item 72 amends subsection 32-4(1) to add an additional
criterion for the Secretary to consider.
New paragraph 32-4(1)(ca) provides that if the applicant has key personnel
in common with a person who is or has been an approved provider - the
Secretary must be satisfied that person has a very good record of conduct
as a provider of aged care and compliance with its responsibilities as such
a provider, and meeting its obligations arising from the receipt of
payments from the Commonwealth Government for providing aged care.
Item 73 amends subsection 32-4(2) which sets out matters that may be
included in Extra Service Principles, specifying in further detail how the
Secretary is to make such determinations. New paragraph 32-4(d) provides
that the Principles can specify the matters to which the Secretary must
have regard in considering whether a person with whom the applicant has
relevant key personnel in common (and who is or has been an approved
provider) has a very good record of conduct, compliance or meeting its
obligations, for the purposes of paragraph 32-4(1)(ca).
Item 74 makes a consequential change to subsection 32-4(3) so that it
appropriately cross-references the new paragraph 32-4(1)(ca).
Item 75 inserts new subsection 32-4(4) which clarifies what is meant by the
applicant having relevant key personnel in common with a person who is, or
has been, an approved provider. This will be the case if, at the time the
person provided aged care as an approved provider, another person was one
of its key personnel and that other person is one of the key personnel of
the applicant.
Items 76 to 78
Sections 35-1, 36-1 and 36-3 all relate to extra service (approval for
extra service fees, provision of residential care on extra service basis
and contents of extra service agreements).
All of those sections currently apply to approved providers as it is
assumed that an entity will be an approved provider prior to applying for
extra service status. However, with the changes to the timing of approved
provider status taking effect (at the point of allocations being granted or
transferred) it is possible that an entity will wish to seek extra service
status prior to their approved provider status coming into force by virtue
of the allocation of places.
Items 76 to 78 therefore amend the references to an approved provider
within subsection 35-1(1), paragraph 36-1(1)(b) and the note to subsection
36-3(1) so that the references are to 'a person' which means a legal person
(such as a corporation). This could be an approved provider or an entity
awaiting their approved provider status coming into force through the
allocation of places.
Items 79 to 81
Section 38-3 sets out the matters that the Secretary must have regard to
when considering an application for certification of a residential aged
cares service.
The effect of these items is to amend the list of matters to which the
Secretary must have regard by adding a new requirement (at new paragraph 38-
3(1)(ca)) that the Secretary must consider the compliance history of any
other approved provider or former approved provider that shares or shared,
key personnel with the applicant.
For example, if one of the Directors (key personnel) of Aged Care Company A
is Ms Jones and she is also one of the key personnel for Aged Care Company
B, the Secretary must have regard to the compliance record of Aged Care
Company B, when considering the certification application by Aged Care
Company A. If Aged Care Company B has a poor compliance record, this will
not necessarily adversely affect Aged Care Company A's application.
However, it will be a matter that is looked into by the Secretary including
to determine whether the reason for the poor compliance record has anything
to do with the involvement of the shared key personnel.
Item 82
This section defines residential care. In summary, residential care is
personal care or nursing care, or both personal care and nursing care, that
is provided to a person in a residential facility in which the person is
also provided with accommodation that includes, for example, staff to meet
care needs, meals and cleaning services, furniture and equipment.
Currently the definition of residential care expressly excludes:
. care provided to a person in the person's private home;
. care provided in a hospital or in a psychiatric facility; and
. care provided in a facility that primarily provides care to people who
are not frail and aged.
The purpose of Item 82 is to amend this definition so that it also excludes
any other care that is specified in the Residential Care Subsidy Principles
not to be residential care (new subsection 41-3(2)).
This is being included to increase flexibility and to enable the exclusion
of, for example, types of care that are not Commonwealth Government funded
and should not be inadvertently regulated under the Act.
Item 83
This amendment is a consequential amendment resulting from the changes
described in Item 96.
In summary, Item 96 creates a new power for the Secretary to determine (in
accordance with the User Rights Principles) that a person must not be
charged an accommodation bond of more than a specified maximum amount
because of financial hardship.
Item 83 amends section 44-7, which sets out the meaning of concessional
resident so that it includes pre-2008 reform residents in relation to whom
a hardship determination is in place under either paragraph 57-14(1)(a) or
57A-9(1)(a). These paragraphs provide for the Secretary to determine that
a person must not be charged any accommodation bond or charge at all
because it would cause the person financial hardship.
The item also inserts a new subheading to subsection 44-8(1A) to assist
readers to navigate the provision.
Item 84
This item inserts a new subsection in section 44-8 (Meaning of assisted
resident). New subsection 44-8(1AA) provides that a person is also an
assisted resident if the person is a pre-2008 reform resident and a
hardship determination is in force under paragraph
57-14(1)(b) or 57A-9(1)(b). These paragraphs enable the Secretary to
determine that a person must not be charged more than a certain amount by
way of bond or charge because of financial hardship.
Items 85 to 88
Currently, the Act does not specifically provide that a person's interest
in a private trust or company should be included in an aged care assets
assessment. However, from a policy perspective a person's interest in a
private trust or company should be treated in the same way as an asset that
has been disposed of (i.e. gifted). Under the Act, gifted assets are
treated in the same way as they are treated under the pension assets test
(refer to subsection 44-10(1C)).
These items therefore makes technical changes to address this anomaly by
amending section 44-10 to provide that the value of a person's assets is
taken to include the amount that the Secretary determines to be the amount:
. if the person is receiving an income support supplement or a service
pension (within the meaning of the Veterans' Entitlements Act 1986) -
that would be included in the value of the person's assets if
Subdivision H of Division 11A of Part IIIB of the Veterans' Entitlements
Act 1986 applied for the purposes of this Act; and
. if the person is not receiving an income support supplement or a service
pension - that would be included in the value of the person's assets if
Division 8 of Part 3.18 of the Social Security Act 1991 applied for the
purposes of this Act. .
A new note to section 44-10 assists readers by describing that Subdivision
H of Division 11A of Part IIIB of the Veterans' Entitlements Act 1986, and
Division 8 of Part 3.18 of the Social Security Act 1991, deal with the
attribution to individuals of assets of private companies and private
trusts.
Item 89
The note at the end of section 53-1 currently provides that an approved
provider's responsibilities cover all the care recipients in an aged care
service who are approved under Part 2.3 as recipients of the type of aged
care provided through the service, as well as those in respect of whom a
subsidy is payable under Chapter 3.
This item amends the note to that section so that the responsibilities of
an approved provider in respect of an aged care service cover all the care
recipients in the service who are approved under Part 2.3 as recipients of
the type of aged care provided through the service, as well as those in
respect of whom a subsidy is payable under Chapter 3.
This reflects other changes to the Act to link approved provider status to
the allocation of places to a particular service.
Item 90
Subsection 54-1(2) currently provides that the responsibilities of approved
providers in relation to quality of care, apply in relation to matters
concerning a person to whom the approved provider provides, or is to
provide, care through an aged care service only if:
. subsidy is payable under Chapter 3 for the provision of the care to the
person; or
. the person is approved under Part 2.3 as a recipient of the type of aged
care provided through the service.
This item amends this subsection so that it aligns with the changes
relating to the linking of approved provider status with the allocation of
places to a particular service.
The amended subsection provides that the responsibilities of approved
providers in relation to quality of care, apply in relation to matters
concerning a person to whom the approved provider provides, or is to
provide, care through an aged care service only if:
. subsidy is payable under Chapter 3 for the provision of the care to the
person; or
. both the approved provider is approved in respect of the aged care
service through which the person is provided, or to be provided, with
aged care and for the type of aged care provided, or to be provided, to
the person, and the person is approved under Part 2.3 as a recipient of
the type of aged care provided, or to be provided, through the service.
Item 91
Section 55-1 describes Part 4.2 relating to user rights. This item makes a
consequential amendment to that section to reflect the linking of approved
provider status to the allocation of places to a particular service.
The item amends the section so that it provides that a person who is an
approved provider in respect of an aged care service has general
responsibilities to users, and proposed users, of the service who are
approved as care recipients of the type of aged care in question. Failure
to meet those responsibilities may lead to sanctions being imposed under
Part 4.4.
Item 92
Section 56-5 currently provides that the responsibilities under the
Division (relating to user rights) apply in relation to matters concerning
any person to whom the approved provider provides, or is to provide, care
through an aged care service only if:
. subsidy is payable under Chapter 3 for the provision of care to that
person; or
. the person is approved under Part 2.3 as a recipient of the type of aged
care provided through the service.
This item amends paragraph 56-5(b) so that it aligns with the changes
relating to the linking of approved provider status with the allocation of
places to a particular service.
The amended section provides that the responsibilities under the Division
apply in relation to matters concerning any person to whom the approved
provider provides, or is to provide, care through an aged care service only
if:
. subsidy is payable under Chapter 3 for the provision of care to that
person; or
. both the approved provider is approved in respect of the aged care
service through which the person is provided, or to be provided, with
aged care and for the type of aged care provided, or to be provided, to
the person, and the person is approved under Part 2.3 as a recipient of
the type of aged care provided, or to be provided, through the service.
Items 93 to 95 and 100
These items make consequential changes to paragraphs 57-2(1)(g), 57-2(1)(h)
and 57-20(4)(c) as well as subsection 57-12(1) to update section and
paragraph cross-references to reflect the changes to section 57-14
discussed at Item 96.
Item 96
This item repeals subsection 57-14(1) and replaces it with a new subsection
that allows the Secretary to not only determine (in accordance with the
User Rights Principles) that a person must not be charged an accommodation
bond because of financial hardship but also to enable the Secretary to
determine that the person must not be charged an accommodation bond of more
than a specified maximum amount.
For example, financial hardship assistance could be granted where a person
has been unable to sell a farm because there are no potential buyers. If
the property is the person's major asset the Secretary may determine that
the person must not be charged an accommodation bond until the property is
sold. However, if the person has assets apart from the farm, the Secretary
may determine that the person may be charged a reduced amount of
accommodation bond until the property is sold.
A note draws the reader's attention to the fact that refusals to make
determinations are reviewable under Part 6.1.
This item also amends the heading to section 57-14 to "Accommodation bond
in cases of financial hardship". This change reflects the fact that the
section has been broadened to apply not just to cases where no bond is
payable because of financial hardship but also where a smaller bond is
payable.
Items 97 and 98
Subsection 57-14(4) describes how applications may be made to the Secretary
for a determination that payment of an accommodation bond would cause
financial hardship. This item amends the subsection so that it applies to
such applications as well as applications for a determination that payment
of an accommodation bond of more than a specified maximum amount would
cause financial hardship.
Item 99
Subsection 57-14(7) currently provides that if the Secretary makes a
determination of financial hardship, the notice given to the approved
provider and the person (to whom the financial hardship determination
relates) must set out when the determination ceases to be in force.
This item repeals that subsection and replaces it with a new one that
retains the requirement for the notice to include this information but also
requires that if the determination is that a person must not be charged an
accommodation bond of more than a specified maximum amount, the notice must
also specify the maximum amount of the accommodation bond.
Item 101
Paragraph 57-21(1)(b) currently provides that an accommodation bond balance
must be refunded by the approved provider conducting the service if the
care recipient ceases to be provided with residential or flexible care by a
service conducted by the approved provider.
This item makes a minor, consequential amendment to this section to ensure
that its operation aligns with the changes which link approved provider
status to services for which there is an allocation of places. The policy
intent of the provision remains unchanged.
Item 102
This item inserts a new section into the Act as follows:
Section 57 21AA Refunding of accommodation bond balance-former approved
providers
Experience with the operation of the Aged Care (Bond Security) Act 2006 has
highlighted that the Guarantee Scheme only operates in regards to current
approved providers and does not protect bonds when the approved provider
status has lapsed or been revoked before the refund declarations have been
made.
Additionally, once an entity loses its approved provider status, the
provisions of the Act intended to protect accommodation bonds, such as
timeframes for bond refunds and interest on late refunds of bonds, cease to
have effect. This is particularly problematic in cases where the reason
for departure is the death of a care recipient and probate may take a long
time to be awarded, or where the liquidation process does not commence
until several months after the facility has closed and approved provider
status has lapsed or has been revoked. This represents an unintended gap
in the protections of the Guarantee Scheme.
This new section addresses this problem by imposing requirements for the
repayment of accommodation bond balances, and the payment of interest on
refunds of accommodation bond balances, on persons that were approved
providers but have ceased to be approved providers under the Act ('former
approved providers').
This amendment is intended to preserve the statutory obligations imposed on
approved providers for refunding accommodation bond balances and paying
interest on refunds of accommodation bonds in circumstances in which the
entity ceases to be an approved provider. In the absence of this
amendment, the requirements of the Act would not apply following the
cessation of approved provider status, despite the fact that the bond was
paid to the entity prior to it becoming a former approved provider.
Residents would need to rely on contractual obligations in their
accommodation bond agreement for refunds and interest payments.
This amendment will also support the operation of the Guarantee Scheme.
The Guarantee Scheme requires, among other events, that there is an
outstanding bond balance. The preservation of the statutory refund
obligations for former approved providers will ensure that the Guarantee
Scheme will operate as originally intended and protect residents.
The section achieves this policy intent by providing that if an
accommodation bond was paid to an approved provider for entry to a
residential or flexible care service and the approved provider ceases to be
an approved provider (in relation to the specific service entered by the
care recipient), the former approved provider must refund the accommodation
bond balance in respect of the accommodation bond to the care recipient.
In terms of the timeframes within which the accommodation bond balance must
be refunded, new subsection 57-21AA(2) provides that:
. if the care recipient dies within 90 days after the day on which the
former approved provider ceased to be an approved provider in respect of
the service (the 90 day period) - the accommodation bond balance must
be repaid within 14 days after the day on which the former approved
provider is shown the probate of the will of the care recipient or
letters of administration of the estate; or
. if the care recipient is to enter another service to receive residential
care within the 90 day period:
- if the care recipient has notified the former approved provider of
the move more than 14 days before the day on which the former
approved provider ceased providing care to the care recipient - on
the day on which the former approved provider ceased providing that
care; or
- if the care recipient so notified the former approved provider within
14 days before the day on which the former approved provider ceased
providing that care - within 14 days after the day on which the
notice was given; or
- if the care recipient did not notify the former approved provider
before the day on which the former approved provider ceased providing
that care - within 14 days after the day on which the former approved
provider ceased providing that care; or
. in any other case - within the 90 day period.
New subsection 57-21AA(3) specifies that a corporation commits an offence
if it was required to refund an amount on a particular day or within a
particular period and did not do so. This offence is punishable by a
maximum penalty of 30 penalty units which equates to $16,500 for a
corporation. This penalty is consistent with all similar offences in the
Act.
A note in the section draws the reader's attention to the fact that Chapter
2 of the Criminal Code sets out the general principles of criminal
responsibility.
This item also amends the heading to section 57-21 so that it is clear that
section 57-21 applies to refunds by approved providers by contrast to 57-
21AA which applies to refunds by former approved providers.
Items 103 and 104
Section 57-21A relates to payment of interest on accommodation bond
balances and section 57-21B relates to payment of interest on entry
contribution balances. These items insert a new subsection into each of
these sections so that they apply to both approved providers and former
approved providers.
Item 105
Section 57A-2 sets out the basic rules about accommodation charges.
Currently one of the rules (at paragraph 57A-2(1)(g)) is that the daily
amount at which the accommodation charge accrues must not exceed the
maximum provided for by section 57A-6 and the care recipient must not be
charged more than one accommodation charge in respect of entering the
service.
This item amends the paragraph so that it provides that the daily amount at
which the accommodation charge accrues must not exceed the maximum provided
for by section 57A-6 or 57A-8A or paragraph 57A-9(1)(b) and the care
recipient must not be charged more than one accommodation charge in respect
of entering the service.
The addition of the reference to 57A-8A addresses a previous inadvertent
omission and the addition of the reference to 57A-9(1)(b) reflects the
amendments described at Item 108 whereby a new power is created for the
Secretary to determine that a resident not be charged more than a certain
accommodation charge.
Item 106
As described in Item 105, section 57A-2 sets out the basic rules about
accommodation charges. Paragraph 57A-2(1)(i) provides that the
accommodation charge must not be charged if a determination is in force
under section 57A-9 that paying an accommodation charge would cause the
care recipient financial hardship.
This item amends paragraph 57A-2(1)(i) so that it cross-references
paragraph 57A-9(1)(a) which is the paragraph that deals with circumstances
where an accommodation charge must not be charged at all.
This is distinct from circumstances where the Secretary has determined that
a smaller charge should be levied based on financial hardship. Item 105
ensures that an approved provider can not charge more than this amount, if
the Secretary has so determined.
Item 107
Subsection 57A-6(1) deals with the maximum daily accrual amount of
accommodation charge. It provides, among other things, that subject to
section 57A-8A, the maximum daily amount of accommodation charge is
detailed in the subsection. This item makes a consequential change to this
subsection so that it is also subject to section 57A-9 (refer item 108)
which creates another circumstances whereby there may be a maximum daily
accrual amount of accommodation charge (namely where the Secretary has
determined a maximum based on financial hardship).
Item 108
Section 57A-9(1) currently provides that the Secretary may determine in
accordance with the User Rights Principles that a person must not be
charged an accommodation charge because payment of an accommodation charge
would cause the person financial hardship. This section does not currently
provide for the situation where a person may have the financial resources
to pay a lesser amount of accommodation charge than would normally be
requested based on the person's assets.
This item provides for the Secretary to determine that a person may pay a
lesser amount of accommodation charge, including where a person has assets
that are unable to be realised but still retains sufficient assets to pay
an amount of accommodation charge.
For example, financial hardship assistance could be granted where a person
has been unable to sell a property due to the number of properties on the
market in the particular area or retirement village. If the property is
the person's major asset the Secretary may determine that the person must
not be charged an accommodation charge until the property is sold.
However, if the person has assets apart from the property, the Secretary
may determine that the person may be charged a reduced amount of
accommodation charge until the property is sold.
A note in the subsection reminds readers that refusals to make
determinations are reviewable under Part 6.1.
This item also amends the heading to section 57A-9 so that it reads
"Accommodation charge in cases of financial hardship". This change
reflects the fact that the section now deals not only with situations where
accommodation charge is not payable at all but also where a smaller amount
is payable because of financial hardship.
Items 109 and 110
These items make technical changes to subsection 57A-9(4) and paragraph 57A-
9(4)(b) which are needed because of the change to subsection 57A-9(1)
(refer Item 108) which enables the Secretary to determine that a person
must not be charged an accommodation charge of more than a specified
maximum daily amount because payment of more than that amount would cause
the person financial hardship.
The changes made by these items enable an application to be made to the
Secretary that payment of an accommodation charge of more than a specified
maximum daily amount would cause the person financial hardship.
Item 111
This item makes a consequential change to subsection 57A-9(7) that results
from the new power of the Secretary to determine that a person must not be
charged an accommodation charge of more than a specified maximum daily
amount (refer Item 108).
The item repeals subsection 57A-9(7) and replaces it with a new subsection
that provides that if the Secretary makes the determination of financial
hardship, the notice must:
. set out any period at the end of which, or any event on the occurrence
of which, the determination will cease to be in force (this retains the
requirement of the previous subsection); and
. if the determination is that a person must not be charged an
accommodation charge of more than a specified maximum daily amount -
specify the maximum daily amount of the accommodation charge.
Item 112
Section 62-1 sets out the responsibilities of an approved provider relating
to protection of a care recipient's personal information. In summary, the
personal information must not be used other than for a purpose:
. connected with the provision of aged care to the person by the approved
provider; or
. for which the personal information was given by or on behalf of the
person to the approved provider.
The section also provides that, except with the written consent of the
person, the personal information must not be disclosed to any other person
other than for the purposes listed in section 62-1.
This item amends paragraph 62-1(b)(iv) to allow the disclosure of personal
information for the purpose of complying with an obligation under this Act
or any of the Principles made under section 96-1.
This change recognises that there are a number of circumstances in which an
approved provider is required to disclose information to, for example, the
Secretary to enable the approved provider to comply with the legislation.
The change puts it beyond doubt that it is not a breach of the approved
provider's responsibilities under section 62-1 to make a disclosure in such
circumstances, as such a disclosure is for a purpose connected with the
provision of aged care to the person by the approved provider.
Further, as part of the package of reforms (of which this Bill is part) it
is also proposed that amendments be made to Principles to require an
approved provider to notify the Secretary when a resident is absent from a
residential care service without explanation and the police have been
notified. The amendment to section 62-1 puts it beyond doubt that the
approved provider can disclose such information to the Secretary without
being in breach of the non-disclosure provisions.
Item 113
Subsection 63-1(2) currently provides that the responsibilities relating to
accountability apply in relation to matters concerning a person to whom the
approved provider provides, or is to provide, care through an aged care
service only if:
. subsidy is payable under Chapter 3 for provision of the care to that
person; or
. the person is approved under Part 2.3 as the recipient of the type of
aged care provided through the service.
This item amends this subsection so that it aligns with the changes
relating to the linking of approved provider status with the allocation of
places to a particular service.
The amended subsection provides that the accountability responsibilities
apply in relation to matters concerning a person to whom the approved
provider provides, or is to provide, care through an aged care service only
if:
. subsidy is payable under Chapter 3 for provision of the care to that
person; or
. both the approved provider is approved in respect of the aged care
service through which the person is provided, or to be provided, with
aged care and for the type of aged care provided, or to be provided, to
the person, and the person is approved under Part 2.3 as a recipient of
the type of aged care provided, or to be provided, through the service.
Item 114
This item inserts a new section 63-1C.
Section 63-1C Responsibility relating to circumstances materially
affecting an approved provider's suitability to provide aged care
As noted in relation to Item 11, it has become the business practice of a
number of approved providers to engage a management company to manage the
delivery of care services. If an applicant for approved provider status is
reliant on a management company to demonstrate that it has skills and
experience in aged care, the use of the management company should be an
ongoing requirement, unless a change is approved by the Secretary.
To ensure that the applicant continues to be suitable to provide care,
amendments to section 8-5 (refer Item 11) enable the Secretary to issue a
notice (if necessary) stating that where, for example, an approved provider
is reliant on a management company and this materially affects its
suitability to provide aged care, the approved provider must notify the
Secretary and obtain agreement before there is any change to that
circumstance (where practicable).
Section 63-1 C then makes it a responsibility of an approved provider in
relation to a circumstance specified by the Secretary in a notice given
under section 8-5, to do all things reasonably practicable to ensure that
there is no change to the circumstance without complying with the steps
specified in the notice under section 8-5.
It is important to note that this section will have no impact on existing
approved providers as at 1 January 2009. For more detailed discussion of
this please refer to Item 11.
Items 115 to 118
Currently section 65-2 sets out the matters that the Secretary must
consider when deciding whether it is appropriate to impose sanctions on an
approved provider for non-compliance with its responsibilities under
Part 4.1, 4.2 or 4.3.
The Secretary must consider the following:
. whether the non-compliance is of a minor or serious nature;
. whether the non-compliance has occurred before and, if so, how often;
. whether the non-compliance threatens the health, welfare or interests of
care recipients;
. whether the approved provider has failed to comply with any undertaking
to remedy the non-compliance; and
. any other matters specified in the Sanctions Principles.
Item 115 renumbers the section to enable the inclusion of the new
subsection 65-2(2).
Items 116 and 117 insert new paragraphs 65-2(1)(ca) and (da), providing two
new requirements that the Secretary must also consider:
. whether the non-compliance would threaten the health, welfare or
interests of future care recipients (Item 116); and
. the desirability of deterring future non-compliance (Item 117).
The requirement specified in Item 116 puts it beyond doubt that even if
there are no care recipients currently at risk because of an approved
provider's non-compliance with its responsibilities, for example, because
all care recipients have left the service where the non-compliance
occurred, in deciding whether it is appropriate to impose sanctions the
Secretary must consider whether the non-compliance would threaten the
health, welfare or interests of any future care recipients if they were to
commence receiving care provided by the approved provider.
The requirement specified in Item 117 puts it beyond doubt that the
desirability of deterring future non-compliance, either on the part of the
non-compliant approved provider or by other approved providers, is a
relevant matter that the Secretary must consider in deciding whether it is
appropriate to impose sanctions on an approved provider.
Item 118 adds new subsection 65-2(2) which expressly provides that the
Secretary's paramount consideration must be whether the non-compliance
threatens or would threaten the health, welfare or interests of current and
future care recipients. This puts it beyond doubt that, in deciding how
much weight to give to each of the relevant considerations that must be
taken into account in deciding whether it is appropriate to impose
sanctions on an approved provider, the Secretary must give the most weight
to whether the non-compliance threatens or would threaten the health,
welfare or interests of current and future care recipients. The interests
of any other party, insofar as they are taken to be a relevant
consideration, must be given less weight than the health, welfare or
interests of current and future care recipients.
Item 119
Section 66-1 sets out sanctions that may be imposed by the Secretary in the
event of non-compliance with the legislation. Item 119 repeals an existing
sanction and replaces it with a new sanction which is intended to better
give effect to the policy intent of the sanction which is the restriction
of payment for new residents.
The revised sanction allows the Secretary to restrict the payment of
subsidy under Chapter 3 to the provision of care to either:
. care recipients to whom the approved provider is providing care at the
time a notice is issued under section 67-5 about the Secretary's
decision to impose a sanction; or
. care recipients other than those to whom the approved provider commenced
providing care, through one or more specified aged care services, after
the section 67-5 notice time.
This change ensures that, if an approved provider on whom the sanction is
imposed nevertheless commences providing care to a new resident despite the
restriction on payment of subsidy for care provided to new residents, the
provider will have the same responsibilities under the Act towards the new
resident as it has towards existing residents, provided the new resident is
approved under Part 2.3 as a recipient of residential care. This change
also ensures that the new resident has the same rights as other residents,
including access to the Complaints Investigation Scheme and the protection
provided by the Guarantee Scheme.
Items 120 to 129
These items amend section 85-1 which includes a table setting out the
decisions that are reviewable by the Administrative Appeals Tribunal.
The amendments made by these items make consequential changes to the table
to:
. reflect minor changes to the wording of the substantive provisions which
are referenced in the table in section 85-1 (for example, to change
references from 'approved provider' to 'person');
. reflect the repeal of certain provisions; and
. include the new decision points resulting from the inclusion of new
sections in the Act as the result of this Bill.
Specifically:
. Item 120 repeals table item 2 which states that the decision to reject
an application for a waiver of the operation of 10-2(1) is reviewable.
This item of the table has been repealed because section 10-2 has been
repealed (refer Item 24);
. Item 121 amends the cell at table item 3 to refer to a "provider of aged
care" rather than an "approved provider" (this is a technical change to
reflect the change to the wording of section 10-3(1)) (refer Item 25);
. Item 122 repeals table item 4 because this refers to subsection 10-4(5)
which has been repealed (refer Item 27);
. Item 123 amends the cell at table item 6 so that it refers to a "person"
rather than "an approved provider" (consistent with the changes to
section 15-4);
. Items 124 and 125 replace table items 10, 11 and 12 with new items that
reflect the changes made to Division 16 in relation to the transfer of
places that are not provisionally allocated (Subdivision 16-A) and those
that are provisionally allocated (Subdivision 16-B) (see Items 52 to
66). In summary, all relevant decisions relating to transfer of places
will be reviewable including:
- a decision to reject an application for transfer of allocated
places, other than provisionally allocated places under subsection
16-5(1) (table item 10). This retains the status quo;
- a decision to approve a day as a transfer day for the transfer of
allocated places, other than provisionally allocated places under
subsection 16-7(3) (table item 11). This retains the status quo;
- a decision to reject an application to approve a day as a transfer
day for the transfer of allocated places, other than provisionally
allocated places under subsection 16-7(3) (table item 12). This
retains the status quo;
- a decision to reject an application for transfer of provisionally
allocated places under new subsection 16-17(1) (table item 12A).
This is a new decision point as the result of amendments to enable
transfer of provisionally allocated places;
- a decision to approve a day as a transfer day for the transfer of
provisionally allocated places under new subsection 16-19(3) (table
item 12B). This is a new decision point as the result of amendments
to enable transfer of provisionally allocated places; and
- a decision to reject an application to approve a day as a transfer
day for the transfer of provisionally allocated places under new
subsection 16-19(3) (table item 12C). This is a new decision point
as the result of amendments to enable transfer of provisionally
allocated places;
. Item 126 amends table item 51 which relates to a decision to refuse to
make a determination that paying an accommodation bond would cause
financial hardship. As the result of changes to that section, this
decision point is now at paragraph 57-14(1)(a) (rather than subsection
57-14(1)) so the table in section 85-1 is being amended accordingly
(refer Item 96);
. Item 127 inserts a new type of decision that is reviewable (at table
item 51A) namely a decision to refuse to make a determination that
paying an accommodation bond of more than a specified maximum amount
would cause financial hardship, or to specify a particular maximum
amount under such a determination (new paragraph 57-14(1)(b)) (refer
Item 96);
. Item 128 amends table item 53A which relates to a decision to refuse to
make a determination that paying an accommodation charge would cause
financial hardship. As the result of changes to that section, this
decision point is now at paragraph 57A-9(1)(a) (rather than subsection
57A-(9)(1)) so the table is being amended accordingly (refer Item 108);
and
. Item 129 inserts a new item at table item 53AA to reflect the new
decision point which is the decision to refuse to make a determination
that paying an accommodation charge of more than a specified maximum
daily amount would cause financial hardship, or to specify a particular
maximum daily amount under such a determination (new paragraph 57A-
9(1)(b)) (refer Item 108).
Items 130 to 134
These items make minor consequential amendments to sections 93-1 and 93-4
(which relate to the Secretary's power to obtain information, and
authorised officers examining people under oath or affirmation) so that
they apply, where appropriate, to both approved providers and former
approved providers. These items change paragraph 93-1(2)(a), paragraph 93-
1(3)(a), subparagraph 93-1(4)(b)(i), paragraph 93-4(2)(a) and
subparagraph 93-4(3)(b)(i).
Items 135 to 140
These items amend definitions in Schedule 1, or add new definitions to
Schedule 1, as follows:
. amendment to the definition of accommodation bond so that it means, in
relation to a person, an amount of money that does not accrue daily and
is paid or payable to an approved provider by the person for the
person's entry to a residential care service or flexible care service
through which care is, or is to be, provided by the approved provider
and in respect of which the approved provider holds an allocation of
places. The underlined words show the change to the definition - this
is a technical change only which reflects the fact that approved
providers will, as a result of the changes made by the Bill, only be
approved in respect of those services for which they have an allocation
of places (Item 135);
. repeal of the definition of key personnel and replacement with a new
definition (Item 136). Key personnel has the meaning given by new
section 8-3A, which is described in Item 7;
. insert a new definition of pre-allocation lump sum (Item 137). This has
the meaning given by new subsection 14-5(6) (refer Item 43);
. insert a new definition of provisionally allocated (Item 138). A place
is provisionally allocated if it is a place in relation to which a
provisional allocation is in force under Division 15;
. insert a new definition of unregulated lump sum, having the same meaning
given by the Aged Care (Bond Security) Act 2006 (Item 139); and.
. insert a new definition of unregulated lump sum balance, having the
meaning given by the Aged Care (Bond Security) Act 2006 (Item 140).
Amendments to the Aged Care (Bond Security) Act 2006
Current legislative protections for accommodation bonds are predicated on
maintenance of approved provider status. However, it is possible that
situations could arise in which approved provider status may cease prior to
all outstanding bonds being refunded. This could occur where, for example,
as a result of compliance action, the Department has revoked approved
provider status of an entity no longer considered appropriate to operate in
the aged care industry.
In circumstances where approved provider status has ceased, there is no
ongoing legislative requirement for repayment of outstanding bonds and the
Guarantee Scheme established in the Aged Care (Bond Security) Act 2006 (the
Bond Security Act) would also not apply.
The rationale for the bond refund requirements and the Guarantee Scheme is
to provide strong protections for consumers and ensure high levels of
confidence in the industry. If there are any potential gaps that may
undermine the effective operation of this safety net, then this can pose
risks not just to consumers but also to providers where public confidence
in the system may be adversely affected.
The Government considers it important that these issues be addressed and
that comprehensive consumer safeguards continue to exist in these
circumstances.
This Bill therefore proposes amendments to the Aged Care Act 1997 so that
the obligations relating to the repayment of bonds (and interest) apply in
relation to former approved providers who continue to have outstanding
bonds. The Bond Security Act is also being amended to ensure that the bond
Guarantee Scheme would also apply in such circumstances. These changes
will ensure that the original policy objectives of the reforms to
strengthen the protection of accommodation bonds are achieved and the
Guarantee Scheme operates as intended.
Item 141
Section 3 of the Bond Security Act provides a simplified outline of that
Act.
This item makes a consequential amendment to this simplified outline to
refer to both approved providers and former approved provider. This
reflects the changes made throughout the Bond Security Act so that the
Guarantee Scheme can apply to approved providers and also to former
approved providers who have not refunded bonds before becoming a former
approved provider.
Item 142
This item makes a consequential amendment to the definition of
administrative costs in subsection 6(1), to reflect the insertion of new
section 13A (refer Item 181) which enables the making of additional refund
declarations. Specifically, this item amends the definition of
administrative costs so that such costs include costs incurred by the
Commonwealth in relation to, and as the result of, the making of an default
event declaration including costs incurred by the Commonwealth as a result
of making any refund declaration under new section 13A.
Item 143
This item inserts in section 6 a new definition of aged care service, with
the meaning given by the Dictionary in Schedule 1 of the Aged Care Act
1997. Aged care service is defined in that Act to mean an undertaking
through which aged care is provided.
Item 144
This item amends the definition of bond in subsection 6(1) so that it also
includes an unregulated lump sum.
Item 145
This item amends the definition of bond balance in subsection 6(1) so that,
for a bond that is an unregulated lump sum, the bond balance is the
unregulated lump sum balance (as defined by the new definition in section
6).
Items 146 to 148, 151 and 153 to 155
These items insert a number of definitions into subsection 6(1). The
amendments provide that the definitions for all of the following terms are
as they appear in the Dictionary in Schedule 1 to the Aged Care Act 1997;
. entry;
. flexible care;
. flexible care service;
. provisional allocation;
. residential care;
. residential care service; and
. respite care.
Items 149 and 150
These items amend the definition of insolvency event in subsection 6(1) so
that it applies to both approved providers and former approved providers.
Item 152
This item amends the definition of refund declaration so that it
appropriately references new section 13A (refer Item 181).
Items 156 and 157
These items insert two new definitions in subsection 6(1):
. unregulated lump sum has the meaning given by subsection 6(3); and
. unregulated lump sum balance, in relation to an unregulated lump sum is,
at a particular time, an amount equal to the difference between the
amount of the unregulated lump sum and any amounts that have been, or
are permitted to be, deducted at that time under the agreement under
which the unregulated lump sum was paid.
Items 158 and 159
Subsection 6(2) establishes the definition of outstanding bond balance
which is relied upon when the Secretary makes a default event declaration
or a refund declaration. Items 158 and 159 amend this subsection so that
the definition of outstanding bond balance applies to approved providers as
well as former approved providers.
This provision enables the Secretary to determine an outstanding bond
balance in relation to approved providers or former approved providers.
Item 160
New paragraph 6(2)(c) adds an unregulated lump sum as another type of
outstanding bond balance. In essence, an unregulated lump sum is an
outstanding bond balance if the time within which it should have been
refunded has passed, or if part of it has not been refunded in the required
time. In the case of unregulated lump sums, this is the lesser of the time
specified for the lump sum to be refunded in the agreements or 14 days
after the day on which the care recipient ceased to be provided with care
through the service operated by the approved provider or former approved
provider.
Item 161
This item inserts a new definition of unregulated lump sum in new
subsection 6(3).
In summary, an amount of money will be an unregulated lump sum if:
. the money is paid by a care recipient (under a written agreement) for
entry to a residential or flexible care service and it does not accrue
daily and must be refunded (in whole or part) if the care recipient
ceases to be provided with residential or flexible care;
. the person to whom the money was paid is an approved provider on
31 December 2008;
. the amount was paid before 1 January 2009 and before the entity became
an approved provider under the Aged Care Act 1997;
. the amount is not an entry contribution;
. the care recipient did not cease to be provided with residential care
through the residential care service, or flexible care through the
flexible care service (as the case requires) after the amount was paid
but before the unregulated lump sum holder began to be an approved
provider.
Item 162
This item inserts a new section 6A.
Section 6A Transitional application of this Act to certain insolvency
events
This clause provides that this Bill, once enacted, does not apply in
relation to any insolvency event that occurs after the period of 12 months
beginning on the transition day has expired if:
. immediately before the commencement of the proposed Aged Care Amendment
(2008 Measures No. 2) Act 2008, a person is an approved provider;
. the person ceases to be an approved provider in respect of an aged care
service on the day immediately after the period of six months, beginning
on the commencement of proposed Aged Care Amendment (2008 Measures No.
2) Act 2008, has expired (the transition day); and
. the person ceases to be an approved provider in respect of the service
because there is no allocation of a place to the person in respect of
the service in effect on the transition day, or there is no provisional
allocation of a place to the person in respect of the service in force
on the transition day.
This clause ensures that the Commonwealth does not remain responsible for
bonds held by aged care services that have never held an allocation of
Commonwealth funded places.
This item defines a period in which residents of current approved providers
who do not hold an allocation of places, or a provisional allocation of
places, will be covered by the Guarantee Scheme.
Current approved providers whose approval will lapse as a result of the
requirement to have an allocation of places (which occurs on 1 July 2009),
will be covered by the Guarantee Scheme for a period of 12 months from 1
July 2009. The period of coverage of the Guarantee Scheme will cease on 1
July 2010. This will provide care providers and their residents' with time
to make any necessary adjustments to their contractual arrangements.
Item 163
This item amends subsection 7(1) so that it applies not just to an approved
provider but to a person who is, or has been, an approved provider.
Items 164 to 168
These items amend subparagraph 7(1)(a)(i), subparagraph 7(1)(a)(ii),
paragraph 7(1)(b), the note in subsection 7(1), and subsection 8(1) so that
all of these provisions make reference to a person rather than an approved
provider (so that the provisions apply to the relevant person be they an
approved provider or former approved provider).
Item 169
This item repeals existing section 9 and replaces it with a new section.
Section 9 Notice of certain insolvency events
This new section provides that if a person is an approved provider and any
of the events mentioned in paragraphs (a) to (f) of the definition of
insolvency event occur in relation to the person, the person must notify
the Secretary the first time that the event occurs.
If the person has been, but is no longer, an approved provider and any of
those events occur, and there was at least one outstanding bond balance of
the person at the time the event occurs, the person must notify the
Secretary the first time that the event occurs.
The notification must be given in writing by the end of the first business
day after the day on which the event occurs.
A person commits an offence if the person refuses or fails to comply with a
requirement under this section. This offence is punishable by a penalty of
30 penalty units which equates to $3,300 for an individual and $16,500 for
a corporation. This penalty is consistent with all similar offences in the
Aged Care Act 1997.
Items 170 to 175 and 177
These items amend paragraph 10(1)(a), paragraph 10(1)(b), subsection 10(2),
subsection 11(1), subsection 12(1), and paragraph 12(2)(d).
The amendments ensure that the provisions apply to both approved providers
and former approved providers.
Item 176
The current legislation does not allow the Secretary to take account of
transactions such as partial refunds that may occur after a persons bond
first becomes outstanding and before the refund determination is made.
This item will amend paragraph 12(2)(b) to allow the Secretary to take
account of all transactions that have occurred up to the time that the
amount of refund is determined and that should be considered in determining
the refund.
Item 178
This item inserts a new subsection in section 12.
New subsection 12(3) enables the Secretary to make a refund declaration in
respect of a refund which has been voided, or 'clawed back' through the
operation of the specified provisions of the Corporations Act 2001 or the
Bankruptcy Act 1966. The provisions listed in new subsection 12(3) specify
the types of transactions for which the Secretary may make a refund
declaration in respect of a voided transaction if the Secretary is
satisfied that the effect of the voiding has been to reverse the refund of
an accommodation bond balance, entry contribution balance or unregulated
lump sum balance.
Items 179 and 180
These items amend subsection 13(1) and paragraph 13(2)(b) to ensure that
the provisions apply to both approved providers and former approved
providers.
Item 181
This item inserts a new section 13A.
Section 13A Additional refund declaration where refund by approved
provider or former approved provider void or voidable
This new section provides that the Secretary may make additional refund
declarations in certain cases where a liquidator has 'clawed back' a bond
balance that amounted to an unfair preference, meaning that the care
recipient has been left without the total bond balance owed to them.
In summary, the power to make an additional refund declaration operates if:
. the Secretary makes a refund declaration under section 13 in reliance on
a determination that an outstanding bond balance is owed to a care
recipient by an approved provider or a former approved provider; and
. if the approved provider is:
- a corporation, the transaction under which the refund took place is
a voidable transaction under subsection 588FE(2), (2A) or 2(B) of
the Corporations Act 2001 and the liquidator takes action under
section 588FF, as a result of which the person to whom the refund
was made does not retain the value of the refund, or part of the
value of the refund; and
- not a corporation, the transfer of any property for the purposes of
giving the refund is void under section 122 of the Bankruptcy Act
1966 and the trustee in bankruptcy takes action as a result of which
the person to whom the refund was made does not retain the value of
the refund, or part of the value of the refund.
In these circumstances, new subsection 13A(2) provides that the Secretary
may:
. determine the amount that the Secretary considers is equal to the amount
of the bond balance that has not been refunded at the time that the
determination is made; and
. as soon as practicable after the Secretary has determined that matter,
make an additional refund declaration relating to the outstanding bond
balance.
New subsection 13A(3) requires that the additional refund declaration be in
writing and specify the approved provider or former approved provider that
has not refunded all, or part of the relevant outstanding bond balance. It
must also declare that the Commonwealth is to pay an amount equal to the
amount determined under paragraph 13A(2)(a).
Subsection 13A(4) clarifies that an additional refund declaration is not a
legislative instrument. This is provided for the purposes of the
Legislative Instruments Act 2003 and for the avoidance of doubt.
Items 182 to 184
These items amend paragraph 14(1)(b) and section 15 (including the note in
that section) so that the provisions apply to both approved providers and
former approved providers.
PART 2-APPLICATION AND TRANSITIONAL
This Bill, once enacted, commences on 1 January 2009. However, a six month
transitional period is being provided for many of the amendments to ensure
a smooth transition. This Part details how each of the provisions will be
expected to operate and when they will take effect.
Item 185
This item sets out the definitions used in this Part relating to
application and transitional arrangements:
. commencing day means 1 January 2009;
. transition day means the day immediately after the end of the transition
period (in other words 1 July 2009); and
. transition period means a period of six months beginning on the
commencing day (in other words the period to from 1 January 2009 to 30
June 2009).
This item also states that an expression used in this Part that is also
used in the Aged Care Act 1997 has the same meaning in this Part as it has
in that Act.
Item 186 Application of amendments to existing approved providers
This item provides that if, immediately before the commencing day (1
January 2009), a person is an approved provider, the approved provider
amendments do not apply during the transition period (that is, until 1 July
2009). The approved provider amendments are mainly those linking approved
provider status to an allocation of places for a particular service
(specifically the amendments made by Items 1, 24 to 26, 89 to 92, 113, 120,
121 and 123).
On 1 July 2009, the approval of existing approved providers is taken to be
in respect of:
. for types of aged care:
- if, immediately before the transition day, the approval was in
respect of all types of aged care - all types of aged care; and
- if, immediately before the transition day the approval was limited
to a specified type or types of aged care - that type or those types
of aged care; and
. for aged care services - each aged care service in respect of which:
- any allocation of a place (be it provisional or operational) is in
effect in respect of the aged care service (whether because the
place was originally allocated to the person or because of a
transfer).
The approval of the entity as an approved provider in relation to any other
service ceases on 1 July 2009. In other words, if an approved provider has
services but no allocations for those services, it will cease being an
approved provider for those services from 1 July 2009.
The obligation under new section 57-21AA (refer Item 102) does not apply in
relation to accommodation bond balances in respect of accommodation bonds
paid for entry to such a service before the transition day.
Item 187 Application of amendments relating to approval of persons as
providers of aged care
This item provides that the amendments made by Items 2, 8 and 9 apply to
the approval of a person as a provider of aged care where the approval is
given on or after 1 January 2009.
Item 188 Application of key personnel amendments
This item provides that the key personnel amendments made by Items 3, 4, 5
and 6 apply in relation to an application for the approval of a person as a
provider of aged care made on or after 1 January 2009.
However, existing approved providers as at 1 January 2009 are not required
to notify the Secretary until 1 July 2009 of a change in key personnel that
is only a change in key personnel because of the amendments made by this
Bill.
The amendments made by:
. Item 14 apply in relation to a change in key personnel that occurs on or
after 1 January 2009;
. Items 63 and 64 apply to applications for transfer of allocated places
made on or after 1 January 2009;
. Items 72 to 75 apply in relation to applications for extra service
status made on or after 1 January 2009; and
. Items 79 to 81 apply to applications for certification of a residential
care service made on or after 1 January 2009.
Item 189 Application of amendments relating to revocation of a provider's
approval on request
This item provides that the amendments made by Items 10, 12, 22, 27 and 122
do not apply if the request is made, before 1 January 2009, by an approved
provider to revoke its approval.
Item 190 Application of amendments relating to matters materially
affecting a person's suitability to provide aged care
This item provides that the amendments made by Items 11 and 114 only apply
to new approved providers, where the approval as a provider is given on or
after 1 January 2009. They do not apply to any approved providers existing
as at 1 January 2009.
Item 191 Application of amendment applying to notice of certain changes
This item provides that the amendments made by Item 15 only apply to new
approved providers, being entities approved as a provider of aged care, on
or after 1 January 2009).
Item 192 Application of amendment relating to applications for allocation
of places
This item provides that the amendment made by Item 28 applies in relation
to an application for an allocation of places made on or after 1 January
2009.
Item 193 Application of amendments relating to allocation of places
This item provides that the amendments made by Items 29 to 51 apply to an
allocation of places made on or after 1 January 2009.
Item 194 Application of amendments relating to lapsing of approval as a
recipient of aged care
This item provides that the amendments made by Items 69 and 70 apply on and
from 1 July 2009.
Item 195 Application of amendments relating to extra service status
This item provides that the amendments made by Items 76 to 78 apply to
applications for extra service status made on or after 1 January 2009.
Item 196 Application of amendments relating to working out residential
care subsidy
This item provides that the amendments made by Items 83 to 88 apply for the
purposes of working out the amount of residential care subsidy payable to
an approved provider for the provision of residential care through a
residential care service to a care recipient, in respect of a payment
period that begins on or after 1 January 2009.
This item clarifies that nothing in Items 93 to 100 or 105 to 111 affects a
determination made before 1 January 2009 under subsection 57-14(1) or 57A-
9(1) of the Aged Care Act 1997 (as in force immediately before 1 January
2009), or anything done in relation to or in reliance upon such a
determination.
Further, the amendments made by:
. Items 126 and 127 apply in relation to a refusal to make a determination
on or after 1 January 2009 under paragraph 57-14(1)(a) or (b) of the
Aged Care Act 1997 (as in force at that time);
. Items 128 and 129 apply in relation to a refusal to make a determination
on or after 1 January 2009 under paragraph 57A-9(1)(a) or (b) of the
Aged Care Act 1997 (as in force at that time).
Item 197 Application of amendment relating to refund of accommodation bond
This item provides that the amendment made by Item 101 applies where the
care recipient ceases to be provided with care by a residential care
service or a flexible care service in a residential setting on or after 1
January 2009.
Item 198 Application of amendments relating to refund of bonds by former
approved providers
The amendment made by Items 102 to 104 (relating to refund of bonds by
former approved providers) applies where a person ceases to be an approved
provider on or after 1 January 2009.
Item 199 Application of amendments relating to the imposition of sanctions
In summary, this item provides that the amendments made by Items 115 to 118
(which relate to the matters to be considered by the Secretary when
imposing sanctions) apply in relation to decisions made on or after 1
January 2009 on whether it is appropriate to impose sanctions for non-
compliance with responsibilities under the Aged Care Act 1997.
The amendment made by Item 119 (which is the new sanctions relating to the
restriction of payment in certain circumstances) applies to sanctions
imposed on or after 1 January 2009 on an approved provider that has not
complied, or is not complying, with one or more of its responsibilities.
Item 200 Application of amendments dealing with sanctions
This item clarifies that the repeal of paragraph 66-1(c) in Item 119 (which
is one of the sanctions that may be imposed by the Secretary) does not
affect the validity of any restriction imposed under that paragraph before
its repeal.
This means that if a sanction has been imposed using an existing sanction
power then this will continue for the life of the sanction and will not be
affected by the amendment that repeals the existing sanctions and replaces
it with a newly worded one.
Item 201 Application of amendment of definition of accommodation bond
This item provides that the amendment made by Item 135 (which amends the
definition of accommodation bond to align with the changes linking approved
provider status to the allocation of places to a service) applies in
relation to amounts of money that are paid or payable on or after 1 July
2009.
Item 202 Application of amendments relating to refund declarations
This item provides that the amendments made by Items 142, 152, 176, 178 and
181 (which relate to refund declarations) apply in relation to the
determination of matters on or after 1 January 2009.
Item 203 Application of amendment relating to insolvency event
declarations
This item provides that the amendment made by Item 169 (namely the repeal
of section 7 of the Aged Care (Bond Security) Act 2006 and replacement of
it with a new section that applies to both approved providers and former
approved providers) applies in relation to insolvency events that occur on
or after 1 January 2009.