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1999
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
AGED
CARE AMENDMENT (OMNIBUS) BILL 1999
EXPLANATORY
MEMORANDUM
(Circulated by
authority of the Minister for Aged Care,
the Hon. Bronwyn Bishop,
MP)
ISBN: 0642 403953
AGED CARE AMENDMENT (OMNIBUS) BILL
1999
OUTLINE
This Bill amends the Aged Care Act 1997 (the Act) and the Aged
Care (Consequential Provisions) Act 1997 by introducing a number of
fine-tuning measures to the aged care structural reforms and addressing some
administrative and procedural issues that have become apparent since the
commencement of most of the new legislation on 1 October 1997.
This Bill
also implements the 1999 Budget initiative to exempt from paying an
accommodation charge those nursing home residents who were in care at the
commencement of the Aged Care Act 1997 and who would otherwise be liable
to pay an accommodation charge on moving to another aged care
service.
The Bill formally introduces a range of resident protection
measures relating to accommodation charges, for care recipients requiring high
level residential care (nursing home). However, the nature and level of the
charge introduced on 6 November 1997 under subordinate legislation will not
change under the proposed amendments. For example, the charge will be continue
to be capped and payable for a maximum of five years. The amendments contained
in the Bill do, however, introduce a number of resident protections in line with
those for accommodation bonds.
This Bill ensures that concessional
resident status applies to a person who has a determination in place that the
payment of an accommodation charge would cause financial hardship. This status
currently only applies to a person for whom a determination is in place for a
waiver of accommodation bond due to financial hardship.
Complementing
this change will be amendments to the Social Security Act 1991 and the
Veterans' Entitlement Act 1986. These amendments will ensure that rental
income will be excluded from the pension income test, and the value of the home
will be exempted from the pension assets test where the former home is being
rented to pay the accommodation charge.
Residents can be asked to pay an
accommodation bond or charge when they enter residential care, if they have
sufficient assets. The resident’s home can be excluded from the asset
test in certain circumstances. The Bill reduces the period for which a carer
must have lived in the family home before the home is excluded from the asset
test from 5 to 2 years.
Other important resident protection measures are
introduced to provide greater protections for residents who are unable to enter
agreements due to incapacity. Concessional resident status is extended to cover
residents whose home is occupied by dependent grandchildren and residents are
protected from being charged for pre entry leave fees prior to their agreement
to enter a service.
The Bill also addresses anomalies in the Act in
relation to the revocation of approved provider status and the imposition of
sanctions for breaches of provider responsibilities under previous aged care
legislation. The Bill introduces provisions that will enable the Commonwealth
to more easily take action against such providers, for example, where they have
been convicted of serious crimes such as abuse of residents or
fraud.
Lastly, the Bill makes minor amendments to the Veterans'
Affairs Legislation Amendment (Budget & Simplification Measures) Act
1997 to correct cross referencing anomalies between this legislation and the
Aged Care Act 1997.
FINANCIAL IMPACT
The amendments have financial implications to departmental costs for the
Department of Health and Aged Care as a result of new systems that will need to
be implemented to administer the new arrangements.
The Departments of
Health and Aged Care and Veteran’s Affairs will have additional
administered costs for charge exempt supplement payments.
The Department
of Family and Community Services will have additional administered costs as a
result of increased pension payments, primarily due to the exclusion of rental
income and the value of the home from the income and assets test where a person
rents their home to pay an accommodation charge.
Centrelink will
have departmental costs to administer the new arrangements to pensioners. These
are yet to be agreed between the Minister for Finance and Administration and the
Minister for Family and Community Services.
The administered costs and
departmental costs for the next four years for each agency are shown
below.
Budget Measures – Charge Exempt Residents
99/00 00/01 01/02 02/03
(Residents
in nursing home care on implementation of the Aged Care Act
1997)
Health and Aged Care
Administered $3.8m $2.6m $2.8m $3.0m
Departmental $0.7m $0.6m $0.2m $0.2m
Veteran’s
Affairs
Administered $0.4m $0.3m $0.3m $0.3m
99/00 00/01 01/02 02/03
Family
and Community
Services
Administered $3.835m $9.510m $12.726m $14.618
Departmental Yet
to be agreed between the Minister for Finance and
Administration and the
Minister for Family and
Community Services.
Introduction
The Aged Care Act 1997 established,
from 1 October 1997, the broad framework for the operation of the aged care
structural reforms which ensure that older people have equitable access to aged
care services that provide high quality standards of care and accommodation.
The Aged Care Amendment (Omnibus) Bill 1999 (the Bill) amends the
Aged Care Act 1997 and the Aged Care (Consequential Provisions) Act
1997 as a result of announcements made by the Government.
It was
announced that care recipients requiring a high level of residential care who
could afford to do so would pay a daily accommodation charge instead of the
accommodation bond. The introduction of an accommodation charge for high level
care residents was implemented through the User Rights Principles on 6 November
1997. This Bill introduces formal provisions relating to the accommodation
charge into legislation.
In the 1999 Budget, the government announced
that people residing in nursing homes when the Aged Care Act 1997 was
introduced, who would be liable to pay an accommodation charge on moving to
another service, would be exempted from paying the charge.
The Bill also
amends the Social Security Act 1991, the Veterans' Entitlement Act
1986 and the Veterans' Affairs Legislation Amendment (Budget and
Simplification Measures) Act 1997, however, these amendments relate to the
pension income and assets tests and do not impact on business.
The
Changes and Their Impact
i Pre-entry Leave
Problem: It
has come to the Government’s attention that the potential exists for aged
care providers to charge residents extra amounts that are contrary to the
intention of the Aged Care Act 1997. For example, the potential exist
for providers to charge fees of intending residents once the person has been
notified of a vacancy but before the person has formally agreed to take up a
place.
Objective: to clarify pre-entry leave provision and prevent
inappropriate charges being levied.
The Bill will clarify the provisions
in the Aged Care Act 1997 that relate to pre-entry leave that is
available to intending residents before they enter a service. This type of
leave is designed so that people can make the necessary arrangements to enter a
service without fear of losing their place as the provider receives Commonwealth
subsidy for the days of pre-entry leave taken.
The Government has become
aware that the potential exists for misuse of these provisions through providers
claiming Commonwealth subsidy and charging intending residents fees even where a
resident has not agreed to enter the service.
Pre-entry leave will now
only be available where a resident has actually agreed to enter a service to
provide greater certainty to residents and to end the misuse of these provisions
by providers.
Options:
1. do not legislate, and retain the current
provisions; or
2. legislate to ensure that inappropriate fees are not able to
be charged of frail and aged Australians who are awaiting a place in residential
care.
Recommendation: Option 2. The objective cannot be achieved without
legislation.
Impact:
1. elderly people in the community are protected
from being charged fees before accepting a place in residential care;
2. care providers will be advantaged through greater certainty regarding pre
entry leave provisions;
3. there will be no impact on
government.
ii. New provisions to facilitate revocation of approved
provider status where the approved provider is no longer considered
suitable
Problem: Since the introduction of the Aged Care Act
1997 and the Aged Care (Consequential Provisions) Act 1997 on 1
October 1997 it has become apparent that the current legislation has been
drafted in a way that unintentionally made it difficult in a practical sense to
impose sanctions or to revoke the approval of a provider for breaches of
responsibilities that occurred prior to 1 October 1997. This is because the
relevant provisions of the preceding legislation, the National Health Act
1953 and the Aged or Disabled Persons Care Act 1954, have been
repealed.
The Government is strongly committed to ensuring that only
people who meet stringent suitability requirements are able to enter and remain
in the aged care industry to ensure that only high quality care is provided to
older Australians. Similarly, the Government maintains its commitment to take
firm and decisive action against those providers who breach their
responsibilities to either consumers or the Commonwealth.
Objective: to
facilitate revocation of approved provider status where the provider is no
longer considered suitable.
There are currently provisions in the Aged
Care Act 1997 which allow the Secretary to revoke the approval of a provider
where there is evidence that the provider is no longer suitable to provider care
to older Australians. This would occur, for example, where the provider has
been convicted of a serious crime such as abuse of residents or
fraud.
The new provisions will rectify an unintended constraint on the
Secretary in the current legislation which makes it difficult to take any
revocation action in these circumstances, due to the need to find alternative
accommodation for all residents before the revocation takes place. This may
impose a practical difficulty where it is necessary to identify alternative
accommodation for a large number of residents at the same time. The new
provisions will allow the Secretary to determine when a revocation takes effect
and to allow for revocation to be undertaken in stages as alternative care
arrangements are made progressively for care recipients.
This will impact
on the very small number of providers who are no longer considered to be
suitable to be aged care providers by removing their approval to operate aged
care services in a staged way.
The amendment confirms the stand that
only people who meet stringent suitability requirements are able to provide
services to frail, older Australians in order to ensure that the best possible
services are provided.
Options:
1. do not legislate, and retain the
current provisions; or
2. legislate to ensure that only suitable people are
able to provide residential care to the frail and aged Australians who require
such care.
Recommendation: Option 2. The objective cannot be achieved
without legislation.
Impact:
1. care recipients will be advantaged, as
unsuitable providers are removed from the industry, thereby increasing the
protections for care recipients; and
2. suitable care providers will be
advantaged through taking up places vacated by unsuitable providers, and by the
transfer of residents from their facilities;
3. there will be negligible
enforcement costs for government.
The Bill also introduces the following
resident protection measures:
iii. Accommodation charge for
high level (nursing home) residents and related matters
Issue
in the current system: There is a need to formalise the accommodation charge in
principal legislation and to implement resident protection measures that are
similar to those in place for residents who pay the accommodation bond. The
Government undertook to do this at the time it announced the introduction of the
charge.
Objective: to formalise accommodation charges in principal
legislation and introduce resident protections and compensation for providers
where charge hardship waivers are approved.
The Government announced that
from 6 November 1997, the accommodation bond was replaced with a daily
accommodation charge for people entering high level residential care, who can
afford to pay the charge. However, people requiring a high level of care who
enter an extra service place can be asked to pay a bond. The amendments do not
affect the quantum or the basic nature of the charge that was introduced on 6
November 1997 through subordinate legislation.
The amendments also
introduce a number of resident protection measures. The Bill extends the same
kinds of resident protections to payments of accommodation charges as the
Aged Care Act 1997 currently contains for the payment of accommodation
bonds. For example, providers and residents will be required to enter into
agreements about the accommodation charge just as they currently do for
accommodation bond payments.
The Bill ensures that providers will receive
payment of concessional resident supplement for successful charge hardship
applicants, and will be able to count these residents towards their concessional
resident ratio enabling some providers to access the highest level of
concessional resident funding. This is the same arrangement that currently
exists for successful bond hardship applicants.
Options:
1. do not
legislate, and leave the User Rights Principles in the existing state;
or
2. legislate, to provide sufficient protections for residents and care
providers regarding accommodation charges. Legal advice was received that the
necessary changes to implement the protections could not be done via the
Principles.
Recommendation: Option 2. The objective cannot be achieved
without legislation.
Impacts
1. the basic mechanisms of the
accommodation charge would remain, without some desirable formal protections for
residents; and
2. care providers could be disadvantaged without the
amendments. Currently, providers are technically unable to receive concessional
resident supplement for charge hardship waiver residents, or to count these
residents towards the concessional resident ratio; and
3. care recipients
could be disadvantaged through not having formalised protections in principal
legislation as currently apply to residents who pay accommodation bonds;
and
4. there is negligible impact on government as these measures have been
operating for the last 18 months through subordinate legislation or through
administrative means.
iv. The qualifying period of co-residence
for carers will be reduced from 5 years to 2 years.
Issue in the
Current System: The Government undertook to reduce the period of carer
co-residence to two years in order to protect the home for bond/charge purposes.
This has been implemented in an interim way through subordinate legislation. To
remove the possibility of legal challenge the Act needs to be
amended.
Objective: to formalise current arrangements and remove the
possibility of legal challenges.
This change will impact on older
Australians by enabling a larger group of people to qualify as concessional
residents and for hardship determinations in relation to paying an accommodation
bond or accommodation charge.
This change will also impact on providers
of residential aged care by enabling them to receive increased payments of
concessional resident supplement in lieu of income that would have been derived
from the payment of accommodation bonds and charges.
Options:
1. do
not legislate, and leave the reference in the Act to 5 years; or
2. legislate to implement the Government’s announcement that the
period of co-residence is 2 years.
Recommendation: Option 2. The
objective cannot be achieved without legislation.
Impact:
1. care
recipients will be advantaged, as a wider group of care recipients will qualify
as concessional residents and not be required to pay accommodation
charges/bonds;
2. care providers will not be disadvantaged, as the greater
number of concessional residents will increase the concessional resident ratio,
entitling providers to increased amounts of concessional resident
supplement.
3. the impact on government will be small in terms of meeting the
additional costs of paying concessional or assisted resident supplement. This
can be met through the special appropriation for which monies under the Act are
appropriated.
v. Refunds and Rollovers
Issue in the
current System: to preserve the current flexibility that exists in subordinate
legislation that allows rollovers of accommodation bonds where a resident moves
from a hostel to a nursing home. This is necessary due to the introduction of
substantive provisions about the charge into the Act.
Objective: to
provide authority in principal legislation for those residents who wish to
rollover a previously paid bond when entering a nursing home instead of paying
an accommodation charge. This will continue to provide residents with the option
of arranging this outcome.
The Bill will provides flexibility for those
residents who have already paid an accommodation bond in a hostel and move to a
nursing home, to choose to either pay another bond of no more than the remaining
bond balance or an accommodation charge based on their level of assets at the
time of the move.
Options:
1. do not legislate, and retain the current
provisions; or
2. legislate to ensure that residents who move from one type
of residential care to another have the same choice as currently on the type of
payment they may choose to make.
Recommendation: Option 2. The objective
cannot be achieved without legislation.
Impact:
1. care recipients
will be advantaged, as those care recipients who have paid a bond and do not
wish to change their financial arrangements to pay a daily charge, will be able
to negotiate to roll over the bond;
2. those care providers will have the
authority in principal legislation to agree to this.
3. there is no impact
on Government.
vi. Agreements where a person has a mental
impairment
Issue in the current system: The Government has become
aware that issues can arise in relation to entering into either resident or
accommodation payment agreements where a resident is unable to sign the
agreement within 7 days of entry because of a mental incapacity.
In
cases where the resident does not already have a legally appointed financial
administrator the 7 day requirement is impossible to meet as it currently takes
several months to have an administrator appointed through State and Territory
Guardianship Boards. The 7 day rule will therefore be qualified so that an
agreement must be entered into within 7 days of a financial administrator being
appointed where the resident has a mental incapacity.
The Bill will also
extend the ability to appoint a legal representative to those residents with a
lesser mental impairment, such as dementia. The new 7 day rule will also apply
to this group of people.
Objective: to ensure that care recipients with a
mental impairment are not disadvantaged and that care providers are not deprived
of an accommodation payment through failure to enter resident or accommodation
payment agreements.
Options:
1. do not legislate, and retain the
current provisions. This leaves potential uncertainty in relation to payments
from people with mental impairments; or
2. legislate to ensure that suitable
protections for both care residents and providers operate in this
situation.
Recommendation: Option 2. The objective cannot be achieved
without legislation.
Impact:
1. care recipients will be advantaged, as
they will have greater certainty as afforded under the Agreements;
2. care
providers will be advantaged through being able to charge accommodation bonds or
charges when a guardian is able to sign an agreement, even where a resident was
unable to sign an agreement on entry.
3. there is no impact on
government.
vii. Extending Definitions
Issue in the current
system: Currently the definition of ‘close relation’ does not
include grandchildren. This unfairly disadvantages the small number of
residents whose grandchildren remain in their homes when they enter care as the
house is not protected for bond/charge purposes. The definition of
‘dependent child’ also unfairly disadvantages the small number of
residents who have a financial responsibility for children even though they do
not have daily care of the child for bond/charge purposes. This can be addressed
under the hardship provisions but it is preferable to include a provision in the
Act to clarify this issue and define these people as a class through the
definitions of concessional and assisted residents.
Objective: to
recognise the responsibilities of non-custodian care recipients who have
financial responsibilities to children, to dependent grandchildren residing in
the care recipient’s home.
The definitions used for 'concessional
resident' and 'assisted resident' will be expanded. Where residents fall within
these definitions providers will receive greater amounts of Commonwealth subsidy
in lieu of payment of income tested fees or accommodation payments they would
otherwise have received.
A 'grandchild’ will be included in the
definition of 'close relation' which forms part of the definition of a
concessional and assisted resident, and will impact on the method used under
section 44-10 for calculating the value of a person’s assets. Where a
'close relation' has lived in the resident’s house for 5 years or more the
resident’s home will not be included in the asset test to determine if the
resident will be able to qualify as a concessional or assisted resident.
The 'dependent child' component of the definitions of concessional and
assisted residents and asset value calculations under section 44-10, will be
expanded to include the situation where a person has a legally based financial
responsibility for a child without having actual daily care of the child, for
example, where there is a commitment to pay child
support.
Options:
1. do not legislate, and retain the current
provisions; or
2. legislate to ensure that suitable protections for both care
recipients and providers operate in this situation.
Recommendation:
Option 2. The objective cannot be achieved without
legislation.
Impact:
1. care recipients will be advantaged, as a wider
group of care recipients will qualify as concessional residents and not be
required to pay accommodation charges/bonds;
2. care providers will be
advantaged, as the greater number of concessional residents will increase the
concessional resident ratio, entitling providers to increased amounts of
concessional resident supplement.
3. the impact on government will be small
in terms of meeting the additional costs of paying concessional or assisted
resident supplement. This can be met through the special appropriation for
which monies under the Act are appropriated.
viii. Amendments to the
Aged Care (Consequential Provisions) Act 1997
The Bill also
introduces some amendments to the Aged Care (Consequential Provisions) Act
1997 as follows:
a. Sanctions for pre 1 October 1997 breaches of
responsibility
Problem: there is currently no mechanism to apply
sanctions to providers who have breached their responsibilities under former
legislation where these breaches come to light post 1 October 1997.
Objective: to facilitate imposition of sanctions where the provider has
breached responsibilities under former legislation..
The Department is
currently unable to impose sanctions in cases where a condition of approval was
breached under previous aged care legislation and action was not taken before
the new Act commenced due to the repeal of the preceding legislation.
The
Government has maintained its stated policy to take firm action against those
providers who breach their responsibilities in relation to care
recipients.
The Bill will amend the Aged Care (Consequential
Provisions) Act 1997 to enable the Department to take action to impose
sanctions under the Aged Care Act 1997 where an approved provider did not
comply with a condition of approval as an approved operator under either the
National Health Act 1953 or with the standards of care under the Aged
or Disabled Persons Care Act 1954.
These amendments will ensure the
provision of quality care to older Australians by taking action against those
providers who breach the responsibilities that they have either to consumers or
to the Commonwealth.
Options:
1. do not legislate, and retain the
current provisions; or
2. legislate to ensure that only suitable people are
able to provide residential care to the frail and aged Australians who require
such care.
Recommendation: Option 2. The objective cannot be achieved
without legislation.
Impact:
1. care recipients will be advantaged, as
unsuitable providers are placed under sanction or removed from the industry,
thereby increasing the protections for residents;
2. suitable care providers
will be advantaged through taking up places vacated by unsuitable providers, and
by the transfer of residents from their facilities;
3. there are minor costs
to Government in additional enforcement costs.
b Additional Recurrent
Funding
Problem: provisions allowing the extension of approvals in
principle for additional recurrent funding were inadvertently
repealed.
Objective: to extend the period of approval-in-principal as
appropriate, to ensure continued funding to providers.
The Bill will
allow for the extension of approvals-in-principle (AIPs) for additional
recurrent funding for new and rebuilt and upgraded facilities defined as nursing
homes as defined under the National Health Act 1953.
Currently no
extensions can be granted to providers where construction has not yet been
completed. The commitments the Commonwealth has in relation to these payments
would lapse even if it were considered appropriate to allow the provider extra
time to complete construction.
Options:
1. do not legislate, and
retain the current provisions; or
2 legislate to ensure that the
Government’s announced protections are implemented
Recommendation:
Option 2. The objective cannot be achieved without
legislation.
Impact:
1. care residents will be advantaged, due to the
higher standard of facilities;
2. care providers will be advantaged, as they
have further time to complete their work without loss of funding.
3. there is
no cost to Government.
Consultation
The Government has
consulted widely during the development of the Act and the Principles, and
subsequently during their operation. The consumer protection mechanisms that
are proposed in this Bill have resulted from views expressed to the Government
either directly or through the complaints units that have been established under
the Aged Care Act 1997.
Industry representatives (providers,
consumers, etc) were consulted about the changes through the Aged Care Working
Group, and its predecessor, the Funding and other Issues Working Group.
Most amendments have been in operation for the last 18 months through
subordinate legislation so they are commonly known in the industry and by
consumers. Most of the contents of this Bill (except the 1999 Budget
initiative) were tabled in the House of Representatives in early 1998. This
provided the opportunity for comment to be made.
Monitoring and Review
of the Reforms
While the Government has taken action in these areas,
the importance of ongoing review of the reforms to residential aged care is
recognised. The Government's commitment to monitoring the reforms will
remain.
The Minister for Aged Care is required to report annually to
Parliament on the operation of the Aged Care Act 1997 on issues such as
unmet demand for places, adequacy of subsidies, compliance of providers with the
legislation, amounts of accommodation bonds charged and imposition of sanctions
for non-compliance.
There is also an ongoing, independent review of the
reforms being conducted over two years. While the review is investigating a
similar range of issues as the annual report it has a broader role, including
the consideration of overall policy and its implementation. The terms of
reference encompass a diverse range of issues such as access, affordability,
adequacy of funding, quality of care, complaints mechanisms and impact on other
services such as community care.
NOTES ON CLAUSES
CLAUSE 1 - SHORT TITLE
This Clause provides that this Bill
may be cited as the Aged Care Amendment (Omnibus) Act
1999.
CLAUSE 2 - COMMENCEMENT
This Clause provides that
the Act will commence on proclamation, or if it has not commenced within 6
months of receiving Royal Assent, it commences on the first day after that time,
except that:
. Schedule 4 is taken to have commenced immediately after
the commencement of Schedule 2 to the Veterans' Affairs Legislation Amendment
(Budget and Simplification Measures) Act 1997. This will ensure that the
technical amendment provided for in Schedule 4 is taken to have been operating
since 1 January 1998, as was the original intention; and
. Items 3 and 4
of Schedule 5 are taken to have commenced immediately after the commencement of
Schedule 1 to the Aged Care (Consequential Provisions) Act 1997. This
ensures that an unintended anomaly relating to Additional Recurrent Funding is
removed. It ensures that approvals-in-principle for additional recurrent
funding can be extended in appropriate circumstances, so that approved providers
are not prevented from receiving their capital funding where, for legitimate
reasons, construction has not been completed within the agreed time frame.
CLAUSE 3 - SCHEDULES
This Clause provides that, subject to
the commencement provisions in Clause 2, each Act specified in a Schedule to
this Bill is amended or repealed as set out in the relevant items and any other
item has effect according to its terms.
SCHEDULE 1 - AGED CARE ACT 1997
SUMMARY
This Schedule amends the Aged Care Act 1997
to make provision for the payment of accommodation charges as announced by the
Government on 5 November 1997. These provisions were contained in subordinate
legislation and it is now proposed that they will be included in the Bill. The
Bill also makes consequential changes to some of the rules about payment of
accommodation bonds. It also provides for clarification and changes required as
a result of experience of the operation of the Act since 1 October 1997. It
also implements the 1999 Budget initiative to exempt people who were residing in
nursing homes when the Aged Care Act 1997 was introduced from paying an
accommodation charge on moving to another service.
ITEM 1
This Item adds a reference to charging an accommodation charge if a
service is certified under Chapter 2, which deals with a range of prerequisites
for paying subsidy.
ITEM 2
This Item repeals Subsection
10-3(2) which requires revocation of approved provider status not to take effect
until alternative care has been arranged for all the care recipients. This
protection is now covered in Item 4, where revocation can be undertaken in a
staged process. Staged revocation is required so that more time and flexibility
is available to make alternative care arrangements for residents.
ITEM
3
This Item amends Paragraph 10-3(3)(c) and in conjunction with Item
4 provides greater flexibility in the timing of revocation where no submission
has been made in response to a notice to the approved provider of the
Secretary's intention to revoke approved provider status. The previous
provision required revocation to take effect on the day after the end of the
period for making submissions, if there was no submission. This amendment now
provides that an approved provider is notified that revocation may take effect
at any time provided there is at least 7 days between the end of the period for
making submissions against revocation and the day when revocation takes
effect.
ITEM 4
This item allows revocation of approved
provider status to occur in a managed way in recognition that many providers
operate a number of services providing care to large numbers of care recipients,
and that arrangements must be made to ensure current care recipients continue to
receive appropriate care. The item also allows for revocation to take effect
without a gradual limitation on approvals, for example, where all care
recipients in a residential aged care service can be found alternative
accommodation at the same time.
This Item repeals Subsection 10-3(7)
which gave effect to revocation as a single action. It is replaced with a
provision allowing the Secretary to give the provider notices specifying
limitations of approval in the move to final revocation. These notices may limit
the provider's approval to provide one or more types of aged care (e.g.
residential care or community care), to provide one or more services if the
provider operates several, or to provide care to particular classes of care
recipient. Examples of the limitation might include any combination
of:
. care recipients receiving a particular level of care;
. a
particular type of care recipient, such as concessional or assisted residents or
those in residence on a particular day (thus limiting the provider’s
ability to take in new care recipients); or
. care recipients in the
service at, before or after a specified event or time.
The Subclause
provides that notices of such limitation of approval can be given at different
times.
This provision also allows the Secretary to give notice of
revocation of approval without imposing any limitations.
Subclause 7A
specifies that the notice takes effect on the day stated in the notice, which
must be at least 7 days after the day the notice is given.
Subclause 7B
picks up, for this staged process, the requirement repealed by Item 2. It
ensures that a notice of the effect of the revocation of approval cannot be
given until the Secretary is satisfied appropriate arrangements for care are in
place for the care recipients who will be affected.
Subclause 7C requires
that where the Secretary has imposed any limitation of approval, the approval of
the provider must eventually be revoked.
ITEM 5
This Item
adds a reference to accommodation charges to the existing reference to bonds, to
the description of what this part is about. It sets out that bonds or charges
can only be levied where a service is certified.
ITEM
6
This Item adds to Paragraph 38-6(2)(d) the requirement to notify of
the responsibilities relating to accommodation charges as well as accommodation
bonds.
ITEMS 7, 8 AND 9
These Items amend Subsections
42-2(2) and (3) to provide that “hospital leave” covered by
Subsection (2) can only be taken after a resident has entered a service. In
combination with section 42-3, the effect of these items is that a person can be
in a hospital and on leave for up to 7 days before they enter a service, but
that leave will be taken out of the 52 days of leave for other purposes covered
by Subsection (3).
ITEM 10
This Item adds to Subsection
42-3(3) a requirement that, for leave to be taken before a person enters a
service, the person must not only be advised that there is a vacancy, but must
also have agreed to enter the service. This is to prevent providers charging
residents fees where they have only been notified of a place and have not
actually agreed to enter.
ITEM 11
This Item introduces the
charge exempt resident supplement as a primary supplement payable in respect of
a care recipient who is a charge exempt resident (as defined under Item 19).
This ensures that providers will be compensated for not receiving an
accommodation charge from a charge exempt resident.
ITEM
12
This Item amends the note in that not all primary supplements are
taken into account for the purposes of the income test under Subdivision 44-E.
ITEM 13
This Item adds a reference to the accommodation
charge as a matter based on which the Minister may determine different amounts
of concessional resident supplement.
ITEM 14
This Item
reduces from 5 years to 2 years the time during which a resident's carer must
have been occupying the resident's home in order for that home not counted in
the value of the resident's assets for the purpose of determining status as a
concessional resident. This provision was originally included in subordinate
legislation and it is now proposed that it be included in the Bill. The period
of co-residence of a close relation for the home to be excluded as an asset is 5
years.
ITEM 15
This Item expands the Note to Subsection
44-7(1) to make clear that a concessional resident cannot be required to pay an
accommodation charge.
ITEM 16
This Item includes in
subsection 44-7(3) a reference to accommodation charge hardship determinations.
This ensures that where an accommodation charge is waived on the grounds of
financial hardship, the resident is considered to be a concessional resident.
This allows providers to then be compensated through receiving concessional
resident supplement paid by the Commonwealth. This amendment ensures
consistency with waivers of accommodation bonds due to financial
hardship.
ITEM 17
This item reduces from 5 years to 2 years
the length of time during which a resident's carer must have been occupying the
resident's home in order for that home not to count in the value of the
resident's assets when determining status as an assisted resident. This
provision was originally included in subordinate legislation and it is now
proposed that it be included in the Bill. The period of co-residence of a close
relation for the home to be excluded as an asset is 5 years.
ITEM
18
This Item adds to the Note to Subsection 44-8(1) a reference to
the fact that an assisted resident can be required to pay an accommodation
charge.
ITEM 19
The matters dealt with in Item 19 are
summarised below.
This Item provides for the creation of a charge exempt
resident supplement, to compensate providers for not receiving an accommodation
charge from charge exempt residents in permanent residential care. A charge
exempt resident is a person who was in an approved bed in an approved nursing
home on 30 September 1997 (under s40AA of the former legislation – the
National Health Act 1953). The person must have been receiving either
permanent or respite care, who then subsequently moves to a high care place
(nursing home place equivalent) after that date, and is otherwise eligible to be
charged an accommodation charge on entry to the relevant aged care service.
The item provides that a charge exempt resident is also someone who
would not otherwise be a concessional resident on entry to the new aged care
service. If a charge exempt resident enters an extra service place, the
resident can continue to pay a bond in that extra service place.
The
supplement is payable in respect of a charge exempt resident, either before or
after the introduction of this Bill, for any day on which the charge exempt
resident was receiving permanent care that is not extra service care and the
service is certified and thus able to levy an accommodation charge. This
provision will allow the subsidy to be paid even if the resident has not been
classified (for example where an assessment under the Resident Classification
Scale has not been received on time), or in respect of a charge exempt resident
who entered the service before it gained certification and then commenced paying
the charge on certification.
The amount of the charge exempt resident
supplement is $12.17 per day unless another amount is determined by the
Minister. This is equivalent to the current maximum rate of concessional
resident supplement. Providers will receive this current maximum rate for the
period between 1 October 1997 and 30 June 1998 when the then maximum
concessional supplement rate was $12, and the maximum rate of charge payable by
a resident was $12 per day. In these circumstances, the payment of $12.17 per
day in charge exempt resident supplement therefore represents a small gain for
providers, and avoids disadvantaging providers.
The Minister may
determine other amounts including nil amounts, based on the maximum rate of
concessional resident supplement when it rises from current levels, or on
whether the assisted resident supplement was already paid in respect of the care
recipient.
The Minister may also determine that a nil amount of charge
exempt resident supplement is payable to the provider (who will then retain
accommodation charges paid by the resident). This could include, for example,
where the provider cannot locate the resident or there is no estate, legal
representative or other specified person to whom the repayment can be made. In
these cases the Secretary must use her or his best endeavours to find the
resident, legal representative or other person to whom the repayment should be
made. If the Secretary’s best endeavours are unsuccessful in finding the
care resident, a legal representative, or other person as specified, no refund
will occur and the Commonwealth’s liability for repayment will cease at
that point.
The Minister may also determine other amounts based on
matters in the Residential Care Subsidy Principles. This provides the
flexibility for the Minister to specify other relevant matters such as classes
of people for whom a different rate may be payable.
The matters to be
specified in the Residential Care Subsidy Principles may include where the
Secretary determines that an amount of charge exempt supplement should not be
paid to the provider in respect of a charge exempt resident. This covers
circumstances where a care recipient may have left the service or died and the
provider is unable to locate the person or make the necessary repayments. This
enables the Secretary to make any repayments of accommodation charges previously
paid directly to the care recipient or the care recipient’s legal
representative or an estate.
ITEM 20
This Item reduces
from 5 years to 2 years the period during which the resident's home must have
been occupied by their carer in order for that home not to count in working out
the value of their assets at the date of entry to the residential aged care
service. This provision was originally included in subordinate legislation and
it is now proposed that it be included in the Bill. However, the period of
co-residence of a close relation for the home to be excluded as an asset remains
at 5 years.
ITEM 21
This Item adds ‘grandchild’
to the definition of “close relation” that appears in the definition
of concessional and assisted resident and in the method of calculating the value
of a person’s assets.
ITEM 22
This Item widens the
definition of “dependent child” to include a person who may not
actually be caring for the young person but is under a legal obligation to
provide financial support, for example, through Child Support. This impacts on
the definition of concessional and assisted resident and on the method for
calculating the value of a person’s assets.
ITEM
23
This item ensures that no care recipient is asked to pay income
tested fees as a result of being classed as a charge exempt resident. No subsidy
is payable for residents with a Resident Classification Scale (RCS) of 8, where
no RCS was received, or following long hospital stays when the RCS defaults to 8
under the current legislation. These residents are not asked to pay an income
tested fee because under step 4 of the income tested fee calculator, there is no
Commonwealth subsidy payable that could be reduced by the amount of any income
tested reduction.
A care recipient for whom no other supplement had been
payable and who was not charged income tested fees, could become eligible to pay
income tested fees under paragraph 44-21(c) of the Act as a result of the
Commonwealth paying a primary supplement (charge exempt supplement). This item
protects charge exempt residents whose only eligibility for income tested fees
would result through the payment of charge exempt resident supplement.
ITEM 24
This item adds compliance with the rules relating
to accommodation charges to the list of responsibilities of approved providers
of residential care.
This Item adds a new responsibility to the existing approved
providers’ responsibilities, that is to take reasonable steps to find any
charge exempt resident who had paid an accommodation charge and left the service
or, if the care recipient has died, to make reasonable efforts to find a legal
representative or other specified person and to make repayments of the charges
as directed by the Secretary. This ensures that charge exempt residents will be
repaid for any accommodation charges that they already paid to the provider.
This item allows flexibility for no direction to be given to a provider
to repay where a repayment is more appropriately made directly to the care
recipient or the care recipient’s estate, legal representative or other
appropriate person by the Department.
ITEM 26
This item adds
compliance with any rules under the Act relating to the charging of
accommodation charges to the existing responsibilities of a provider of flexible
care.
ITEM 27
This Item adds a new responsibility for an
approved flexible care provider to take reasonable steps to find any charge
exempt resident who had paid an accommodation charge and left the service or, if
the care recipient has died, to make reasonable efforts to find a legal
representative or other specified person, and to make repayments of the charges
as directed by the Secretary. This ensures that charge exempt residents will be
repaid for any accommodation charges that they have already paid to the
provider.
This allows flexibility for no direction to be given to a
provider where a repayment is more appropriately made directly to the care
recipient, the care recipient’s estate or legal representative by the
Department.
ITEM 28
This Item adds a rule about when
accommodation bonds are payable. This is a responsibility with which providers
must comply. The rule is that, at the time the person enters the service, at
least one of the following must be true in order for an accommodation bond to be
charged:
. the person is not eligible to pay an accommodation charge
(that is, the person does not require a high level of care);
. the
service, or the distinct part of the service, where the care recipient is to
live, must have extra service status; or
. section 57-23 allows the
provider to charge a bond in circumstances where an accommodation charge would
normally be payable. This will be in the case where a care recipient has moved
from one service to another (where an accommodation charge would otherwise be
payable) and the care recipient has agreed with the second provider to pay an
accommodation bond. In this case, the maximum bond which can be paid is the
balance received from the first service.
. the person is not a charge
exempt resident.
The note to the section explains that a concessional
resident cannot be required to pay an accommodation bond.
ITEM
29
This Item adds a Note to Paragraph 57-2(e) which refers to another
provision that deals with the timing of accommodation bond agreements. The Note
explains that the time limit is extended if certain legal processes relating to
the resident's mental impairment are in progress.
ITEM 30
This
Item adds another reference in Paragraph 57-2(g) to include reference to Section
57-23 which deals with additional rules about accommodation bonds on transfer
between services where an accommodation charge is otherwise
payable.
ITEM 31
This Item adds a provision to extend the
time allowed for making an accommodation bond agreement where it has been
delayed because there is no legally authorised person so far appointed to sign
on behalf of a resident with a mental impairment. The Item provides that, where
the 7 days allowed has expired, but a process is in progress for a legally
authorised representative (other than the approved provider) to be appointed for
a resident with a mental impairment, the 7 day time limit is extended until 7
days after:
. the appointment is made; or
. a decision is made not
to make the appointment; or
. the process ends for some other
reason.
The time limit in this case can also be extended for any further
period allowed by the Secretary, taking into consideration any matters specified
in the User Rights Principles.
ITEM 32
This Item amends
Note 2 to Subsection 57-16(2) to make allowance for the extra time in the
situations described in Item 31.
ITEM 33
This Item adds a
new Subdivision 57-H - Charging an accommodation bond instead of an
accommodation charge.
Clause 57-23 Charging an accommodation bond
instead of an accommodation charge
This provision applies where a
person:
(a) agreed to pay an accommodation bond to a residential care
service;
(b) left that service and within 28 days moved into another where an
accommodation charge would be payable, and
(c) the resident and the provider
agreed before the resident entered the second service that an accommodation bond
would be payable instead.
In this case, the second service provider can
charge an accommodation bond even though in any other circumstances they would
only be able to charge that resident an accommodation charge. The maximum bond
that can be charged in this situation is either the balance refunded or payable
in accordance with Section 57-21, or the bond amount agreed less any retention
amounts if the accommodation bond has not been paid fully as a lump
sum.
ITEM 34
This Item inserts a new Division 57A - What
are the responsibilities relating to accommodation charges?
Clause
57A-1 What this Division is about
This Clause explains the effect of
the new Division 57-A.
Subdivision 57A-A - The basic
rules
Clause 57A-2 - Basic rules about accommodation
charges
Subclause (1) lists the basic rules applying to charging an
accommodation charge for a care recipient's entry to a residential care service
as follows:
(a) At the time of entry all the following must be
true;
. the care recipient requires a high level of residential care;
. at the time of the care recipient’s entry to the service, the
care recipient’s approval under section 22-2 is not limited to a low level
of care;
. the service or distinct part of the service where the care
recipient has a place does not have extra service status; and
. the
application of Section 57-23 does not allow the provider to charge an
accommodation bond.
The Note to this item explains that a concessional
resident cannot be required to pay an accommodation charge.
(b) No
accommodation charge can be charged if the person is a charge exempt
resident.
(c) No accommodation charge can be charged if the person enters
to receive respite care only.
(d) Before the care recipient enters the
service, the provider must supply any information about the accommodation charge
which is specified in the User Rights Principles.
(e) The care recipient
and the provider must sign an accommodation charge agreement within 7 days of
the care recipient's entry. A Note explains that this time limit is extended in
some cases of mental impairment referred to in Subsection
(2).
(f) Another person must not be required to pay the accommodation
charge as a condition of the care recipient's entry.
(g) The daily amount
of the charge must not exceed the maximum set in Section 57A-6 and the care
recipient must not be asked to pay more than one accommodation charge for
entering the service.
(h) The accommodation charge cannot accrue for a
total of days in excess of 5 years as set out in Section 57A-7, or in
contravention of Section 57A-8 which deals with certification of the
service.
(i) An accommodation charge must not be charged if there is a
hardship determination in force under Section 57A-9.
(j) The approved
provider must comply with the requirements of Section 57A-11 which relates to
not requiring payment more than a month in advance.
(k) The care
recipient may be required to pay interest on late payment of the charge in
accordance with Section 57A-12.
(l) The provider must use the money from
the accommodation charge to meet capital works costs related to residential
care, to retire debt relating to residential care, or, where no capital
expenditure is reasonably required in relation to certification and
accreditation purposes, to improve the quality and range of aged care
services.
(m) The approved provider must not charge an accommodation
charge if prohibited by a sanction under Part 4.4.
(n) Any other rules
specified in the User Rights Principles.
The note after subsection 57A-2
explains that a concessional resident cannot be required to pay an accommodation
charge.
Subclause (2) extends the 7 day time limit imposed by paragraph
(1)(e) for signing accommodation charge agreements, in certain circumstances.
These are where the care recipient has a mental impairment and a process is in
progress to appoint a legally authorised representative (other than the
provider). The time limit is extended until:
. 7 days after the
appointment is made or a decision is made not to make the appointment or the
process ends for any other reason; or
. for a further period which the
Secretary allows, having considered any matters specified in the User Rights
Principles.
Subdivision 57A-B Accommodation charge
agreements
Clause 57A-3 Contents of Accommodation charge
agreements
Subsection (1) provides that an agreement between a
provider and a resident or intending care recipient of a residential care
service is an accommodation charge agreement if it sets out the
following:
(a) the amount of the accommodation charge which accrues for
each day, including days of leave;
(b) the date, or proposed date of
entry;
(c) how the accommodation charge is to be paid;
(d) when
the accommodation charge is payable;
(e) whether payment of the charge
entitles the resident to specific accommodation or additional
services;
(f) any financial hardship provisions that apply to the
resident;
(g) any other matters specified in the User Rights
Principles.
Subsection (2) provides that the User Rights Principles may
specify, but are not limited to, matters relating to:
(a) specific
entitlements of a care recipient which arise from signing an accommodation
charge agreement;
(b) provision of information to others about
accommodation charges and related matters;
(c) a care recipient’s
obligations;
(d) alleviating financial hardship.
Clause 57A-4
Accommodation charge agreements may be incorporated into other
agreements
This Clause has the effect that, if the content
requirements are met under clause 57A-3, an accommodation charge agreement can
be incorporated in another agreement (for example, a resident agreement).
Clause 57A-5 Agreements cannot affect requirements of this
Division
This Clause ensures that the requirements of this Division
apply, despite any provisions to the contrary in any
agreement.
Subdivision 57A-C Daily accrual amounts of accommodation
charges
Clause 57A-6 - Maximum daily accrual amount of
accommodation charge
This sub-clause provides that the maximum daily
accrual amount of an accommodation charge is the lowest of the
following:
(a) the daily accrued amount stated in the accommodation
charge agreement;
(b) the value of the resident's assets at entry, minus
the minimum permissible asset value under Subsection 57-12(3), and then that
figure divided by 1,825 (5 years worth of days);
(c) an amount specified
in, or worked out in accordance with, the User Rights
Principles.
Subclause (2) provides that, if a resident does not give
asset information to the provider to work out the value of their assets at
entry, paragraph (b) in Subclause (1) above is not considered for working out
maximum daily amount of accommodation charge.
Subclause (3) provides that
the value of the resident's assets is worked out according to Section 44-10,
that is, in the same way as for concessional and assisted resident
status.
Clause 57A-7 Maximum period of daily accrual of accommodation
charge
This Clause provides that an accommodation charge cannot
continue for any days after the resident leaves the service or dies. In any
case, the accommodation charge can only accrue for a maximum of 5 years in a
service, starting on the later of the entry day or the date of certification.
Because of the effect of section 57A-8, where a resident enters an uncertified
service and agrees to pay an accommodation charge, that charge cannot begin to
accrue until the service becomes certified.
The 5 years total includes
all days of leave, but no day when the resident was not in a residential care
service. The period of 5 years during which the charge can accrue in any service
is reduced by the number of days a charge has already accrued in another
service.
Clause 57A-8 Accommodation charge not to accrue while
residential service not certified
This Clause provides that an
accommodation charge cannot accrue for any day on which a service was not
certified. This will apply whether the day in question is a day at the
beginning of a care recipient’s residence or during the course of the
residence.
Clause 57A-9 Accommodation charge not payable in cases of
financial hardship
This Clause provides that the Secretary may
determine, in accordance with the User Rights Principles, that a person must not
be charged an accommodation charge because its payment would cause financial
hardship. A Note explains that a refusal to make such a determination is
reviewable. Circumstances constituting financial hardship include, but are not
limited to, any specified in the User Rights Principles.
Subsection (3)
provides that determinations end at a time or on the occurrence of an event, if
this is specified in the determination. A Note states that such inclusions in
the determination are reviewable. The resident or the service provider can
apply, in a form approved by the Secretary, for a hardship determination. If
the Secretary needs more information to make the determination, this may be
requested in a notice. The information must be supplied within 28 days of the
notice or another time specified in the notice. The notice must also advise
that the application will be taken to be withdrawn if the information is not
supplied in the time. A notice of the Secretary's decision must be given to the
resident and the provider within 28 days of the application or of receiving
further requested information. If the determination is made, the notice must
contain any time or event after which it will cease to be in
force.
Clause 57A-10 Revocations of determinations of financial
hardship
This Clause provides that, in accordance with the User
Rights Principles, the Secretary may revoke a hardship determination. A Note
states that this decision is reviewable. Before revoking the determination, the
Secretary must give the resident and the provider a written notice stating that
revocation is being considered. The notice must invite submissions within 28
days of receiving the notice and inform recipients that, if no submission is
received within that period, revocation will occur on the day after the end of
the period for making submissions. The Secretary must consider any submissions
in making the decision and the decision must be made within 28 days of the end
of the submission period.
The Secretary must give written notice of the
decision to the resident and the provider within 28 days of the end of the
submission period and if no notice is given the Secretary is taken to have
decided not to revoke the determination. The revocation takes effect on the day
after the resident and the provider have both received their notices.
Subdivision 57A-D Payment of accommodation
charges
Clause 57A-11 Accommodation charges may be payable not
more than one month in advance
An accommodation charge can be paid up
to one month before it accrues, but, if it does not in fact accrue, any advance
payments must be refunded, for example, where a care recipient does not in fact
enter care.
Clause 57A-12 Approved provider may charge interest for
late payment
This Clause provides that if, under an accommodation
charge agreement, a resident is required to pay an accommodation charge and the
resident does not pay some or all of the charge until more than one month until
after the charge accrued, the resident may be required to pay interest on the
outstanding balance. However, such interest can only be charged if it is
specified in the accommodation charge agreement. The rate of interest must not
exceed that specified in the User Rights Principles.
ITEM
35
This Item adds a reference to an accommodation charge agreement to
the Note at the end of Subsection 59-1(3), mentioning that a charge agreement
can be incorporated into other agreements (for example, a resident
agreement).
ITEM 36
This Item amends paragraph 62-1(b)(ii)
to allow for disclosure of personal information in limited circumstances. This
is to allow one provider to provide information to another provider on how much
of the 5 years maximum possible accrual of the accommodation charge is left
where a care recipient is moving to a new service.
ITEM
37
This Item amends Paragraph 63-2(2)(d) to include information about
amounts of accommodation charges in the information to be included in the annual
report to Parliament on the operation of the Act.
ITEM
38
This Item amends Paragraph 66-1(j) to add to the list of sanctions
that may be imposed on approved providers. Sanctions will include the
prohibition of charging of accommodation charges. A similar sanction currently
exists in relation to prohibiting the charging of accommodation
bonds.
ITEM 39
This Item amends the table in Section 85-1
to provide that the following decisions under the following provisions of the
Act are reviewable decisions:
. subsection 57A-9(1) - that paying an
accommodation charge would not cause financial hardship;
. subsection
57A-9(3) - that a hardship determination will cease at a specified time or on
the occurrence of a specified event; and
. subsection 57A-10(1) - to
revoke a determination that paying an accommodation charge would cause financial
hardship.
ITEM 40
This Item amends Paragraph 86-9(1)(e) to
add information about accommodation charges to the list of information which the
Secretary can make freely available about a service.
ITEM
41
This Item adds records about accommodation charges to the list of
examples of types of records the retaining of which may be required in the
Principles.
ITEM 42
This Item amends Paragraph 96-5(b), in
line with the provisions in this Bill extending the time for signing
accommodation bond or accommodation charge agreements in certain cases of mental
impairment. It replaces the concept of mental incapacity with that of mental
impairment, to cover cases where residents may have a lower level of mental
deficiency than is implied by incapacity, but nevertheless are not in a position
to make their own decisions about signing agreements. It also covers
circumstances where residents are physically unable to enter
agreements.
ITEM 43
This Item amends the Note to Section
96-5 to include accommodation charge agreements in the range of agreements that
a person representing the care recipient can enter on the care recipients behalf
where that person is unable to enter into the agreement.
ITEM
44
This Item ensures that funds appropriated under Chapter 3 of the
Act can be directed to either approved providers, the care recipient, the care
recipient’s estate or legal representative where funds are paid as charge
exempt resident supplement.
ITEM 45
This Item amends the
definition of accommodation bond in Clause 1 of Schedule 1 of the Act to make
clear that, in contrast to an accommodation charge, an accommodation bond does
not accrue daily.
ITEM 46
This Item amends Clause 1 of
Schedule 1 of the Act to include a definition of ‘accommodation
charge’.
ITEM 47
This Item amends Clause 1 of
Schedule 1 to the Act by adding a definition of ‘accommodation charge
agreement’.
This Item amends Clause 1 of Schedule 1 to the Act by adding a definition
of ‘charge exempt resident’.
ITEM
49
This Item amends Clause 1 of Schedule 1 to the Act by adding a
definition of “low level of residential care”.
SCHEDULE 2 - SOCIAL SECURITY ACT 1991
ITEM 1
This Item amends section 3 (index of
definitions) to include a reference to the new definition of "accommodation
charge", that is being inserted in subsection 11(1) by clause 4 below, and
a new definition of “charge exempt resident”.
ITEM 2
This Item makes a consequential amendment to a note to provide that
exempt bond amounts and amounts refunded to charge exempt residents do not count
as income.
ITEM 3
This Item inserts a new paragraph
8(8)(zn). Subsection 8(8) provides for certain amounts to be excluded from the
income test.
New paragraph 8(8)(zn) provides that rental income from a
person's principal home is to be excluded from the social security income
test:
· while the person is accruing an accommodation charge;
and
. while the person, or the person's partner, receives rent
from a third person in respect of their principal home.
The new provision
provides that any rental income exempted under the income test will be exempt
for both the person liable to pay the accommodation charge and the person's
partner (if applicable) while the person is or would be liable to pay a
charge.
Note 1 to the new paragraph refers the reader to the definition
of "rent" in subsection 13(2) of the Social Security Act.
Note 2 advises
the reader that a home may be deemed to be a principal home under subsections
11(6A) and 11(7), notwithstanding that the person liable to pay an accommodation
charge (and the person's partner, if applicable) is residing in another
place.
ITEM 4
This Item provides a definition of
"accommodation charge". The new definition will be the same as that used in the
Aged Care Act 1997. That Act defines an "accommodation charge" as
follows:
accommodation charge, in relation to a person, means an amount
of money that accrues 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.
ITEM 5
This item provides a definition of
“charge exempt resident” which is the same as that used in the
Aged Care Act 1997.
ITEM 6
This Item amends
subsection 11(1) to provide for the new subsection 11(6A) in the definition of
"principal home".
ITEM 7
This Item inserts a new subsection
11(6A) to extend the existing provisions that provide for a residence to be
deemed to be a person's "principal home" even though a person is absent from the
home.
New subsection 11(6A) provides that a residence is taken to be a
person's principal home if the Secretary is satisfied that the person left his
or her principal home for the purpose of going into a "care situation" and for
the period which:
· the person is liable to pay an accommodation
charge for the care (or would be liable except for the fact that the care
provider's right to charge an accommodation charge has been temporarily
withdrawn because of a sanction imposed under Part 4.4 of the Aged Care
Act 1997); and
· the person or the person's partner is receiving
rent from the premises from a third party.
New subsection 11(6A) provides
that, if a premises is deemed to be a person's principal home because of the
operation of subsection 11(6A), the premises is also deemed to be the principal
home of the person's partner.
Subsection 11(6A) will only apply if the
person left the person's principal home to go into a "care situation" (which is
defined in subsection 13(9) and includes the case where a person receives, or is
likely to receive care in a private residence for at least 14 days).
This amendment means that persons who rent out their principal home and
pay an accommodation charge will not have their home assessed under the assets
test.
A note to the provision also clarifies that a person, and the
person's partner cannot have more than one principal home at any one time. That
is, only one residence can be the principal home of a person and the person's
partner.
ITEMS 8 to 12
These Items update various sections
to provide for the new subsection 11(6A) that has been inserted in the
definition of "principal home".
ITEM 13
This Item inserts
a new Division 1D which inserts new sections 1099E to 1099H and a new division
1E which inserts new sections 1099 J to M.
New section 1099E sets out an
overview of the Division. The new Division will apply to two classes of
people.
The first class are those people who became liable to pay for an
accommodation bond between 1 October 1997 and 5 November 1997, would have been
liable to pay an accommodation charge had that been in place, or who would have
been charge exempt residents had that been in place, and who subsequently agreed
to switch to an accommodation charge.
The accommodation bond scheme was
abolished from 6 November 1997 and was replaced with the accommodation charge
scheme. If a person paid an accommodation bond, the person or the person's
partner can request that the nursing home refund the bond. If the bond is
refunded, the person would then, in lieu of the accommodation bond, pay an
accommodation charge. To ensure that persons who paid an accommodation bond are
not disadvantaged, the refunded bond will be exempted from the income and assets
test.
The second class of people are those people who either sold their
home, or became liable to sell their home (that is, there was an exchange of
contracts), prior to 6 November 1997, and the Secretary is satisfied that
the home was sold to pay an accommodation bond, or if the Secretary is satisfied
the person would have been a charge exempt resident. This amendment will ensure
that a person is not penalised by having income assessed against their social
security payments if the person invests the refunded bond or the proceeds of
sale.
It is intended that the beneficial income treatment will also cover
the partners of the recipient.
Subsections 1099E(1) and (2) provide
that the Division applies to a person including one who is a charge exempt
resident who:
· between 1 October 1997 and 5 November 1997
became liable to pay an accommodation bond and the person later made an
agreement to replace the liability for the accommodation bond with a liability
to pay an accommodation charge and an accommodation charge would have been
payable for the entry had the person entered residential care after 5 November
1997; or
· on or before 5 November 1997, sold his or her "principal
home" (as defined in subsection 11(7)) for the sole or principal purpose of
raising money to pay an accommodation bond and an accommodation charge would
have been payable for the entry had the person entered residential care after
5 November 1997.
The requirement that an accommodation charge would
have been payable, had the person entered residential care after 5 November 1997
ensures that the provision applies only to those persons who paid an
accommodation bond to enter a nursing home level of care.
New subsection
1099E(3) provides that the Division applies to partners of a person who sold a
home or purchased an accommodation bond in the above circumstances, even if the
person is deceased. This subsection reflects the fact that the partner was also
likely to be disadvantaged by the above situations.
New subsection
1099E(4) provides that a person is taken to have sold his or her home if the
person had entered into a legal obligation to sell the home as at
5 November 1997. That is, if contracts had been exchanged as at 5 November
1997, the person would be obligated to continue the sale despite the fact that
accommodation bonds may have been abolished at the date that settlement occurs.
This subsection ensures that persons who had entered into a binding agreement to
sell for proper consideration are not disadvantaged.
New section 1099F
provides that a person's "exempt bond amount" (which is calculated in section
1099H) does not count as income for the purposes of the Act.
New section
1099G provides that a person's income will be reduced by an amount that could
subsequently be derived from the refunded bond or the proceeds of sale of a home
as if the amount were a financial asset of the person. This will ensure that
persons are not penalised by having their social security payments reduced if
the person banks or invests the refunded bond or the proceeds of sale. The
reduction will occur until the death of the recipient (or the death of the
recipient's partner), whichever is later.
That is, section 1099G provides
that a person’s (and the person's partner's) income will be reduced by an
amount equal to the income that would be calculated if the social security
deeming rules were applied to a capital amount equal to the amount of the
refunded bond (or the proceeds of sale of the home, if relevant).
New
section 1099H provides a method for calculating the reduction in a person's
income and assets (the exempt bond amount) where:
· a person
receives a refunded accommodation bond or proceeds from the sale of a house;
and
· the person satisfies the criteria in section 1099E (see
above).
Subsection 1099H(2) provides for a situation where a person is
covered by subsection 1099E(1) only. That is, the situation where a
person:
· became liable to pay an accommodation bond during the
period 1 October 1997 until the end of 5 November 1997;
and
· would have been liable to pay an accommodation charge had the
person entered residential care after 5 November 1997; and
· later
entered into an agreement to exchange the bond for an accommodation
charge.
In this case, the person's exempt bond amount is equal to the
amount of the accommodation bond that is refunded to the person under the
agreement.
Subsection 1099H(3) provides for the situation where a person
is covered by subsection 1099E(2) only. That is, the situation where the
Secretary is satisfied that a person sold his or her home for the sole or
principal purpose of raising money to pay for an accommodation charge and an
accommodation charge would have been payable had the person entered residential
care after 5 November 1997.
In this case the person's exempt bond amount
is equal to the net proceeds of the sale of the house. That is, the gross
proceeds of the sale less any costs associated with the sale and less any
mortgage that the person or the person's partner had over the house at the time
of settlement.
Subsection 1099H(4) provides that if both subsections
1099H(2) and 1099H(3) apply to a person, then the person's exempt bond amount is
equal to the greater of the two amounts. This subsection will ensure that no
person is disadvantaged against other persons covered by subsections (2) and
(3).
Subsection 1099H(5) provides that, if a person has an exempt bond
amount, then the partner also has an exempt bond amount.
Subsection
1099H(6) provides that, if the person is a member of a couple and is not
deceased then the amount of the person (and the person's partner's) exempt bond
amount is equal to half of the exempt bond amount. This subsection will ensure
that if, for example, the amount assessed under subsection 1099G(3) is equal to
$10,000, then $5,000 is assessed against the person and $5,000 is assessed
against the person's partner. It is not appropriate, of course, to assess
$10,000 against the person and $10,000 against the person's partner, as this
would result in a doubling up of exempt bond amounts.
If a person is
single (including a person whose partner was a member of a couple but the
partner is now deceased), then the person would have the full amount of the
exempt bond amount attributed to the person.
DIVISION
1E
This division applies to refunds made to a charge exempt resident
for accommodation charges paid to a care service. It ensures that these refunds
do not affect pension payments. The Division provides that, for the purposes of
the Act, the receipt of a refund is not counted as income. The Division also
provides that the refunds cannot affect future pension payments.
This is
achieved by:
• exempting forever deemed income based on the amount of
the refund from the income test; and
• exempting forever the amount of
the refund from the asset test.
This applies in relation to a person who
was a charge exempt resident before or after the commencement of this Division.
This Division does not apply to refunds made to the charge exempt
resident’s estate or to another person.
ITEM 14
This
Item amends note 2 to subsection 1118(1) to provide for the new subsection
11(6A) that has been inserted into the definition of "principal
home".
ITEM 15
This item inserts a new section
1118AB.
New section 1118AB provides that, if a person has an exempt bond
amount (as calculated under section 1099H), then the person's assets are to be
reduced by an amount equal to the exempt bond amount. If a person disposes of
the exempt bond amount, the deprivation provisions will apply to the disposal.
The application of the deprivation provisions may mean that the deprived amount
may be included in the person's assets, which means that the deprived amount
will be offset against the continued asset reduction under section
1118AB.
The new section 1118AC states that the value of the
person’s assets is reduced by the refunded amount if the person is a
charge exempt resident.
ITEM 16
This item inserts a
transitional provision for charge exempt residents who would otherwise have
received income and asset test concessions under items 3 and 7 of this Schedule.
Charge exempt residents no longer satisfy the requirements of these items
because of the removal of accommodation charge liability. Where a charge exempt
resident has been renting their former home since before 1 July 1999 they will
continue to qualify for these concessions while rental income continues.
SCHEDULE 3 - VETERANS' ENTITLEMENTS ACT 1986
Schedule 3 makes consequential amendments to the Veterans’
Entitlements Act 1986 (the VEA) arising from amendments to the Aged Care
Act 1997 and related policy changes. These amendments mirror the amendments
to the Social Security Act 1991 in Schedule 2 to ensure consistency of
assessment of income and assets tests of people who enter an aged care facility
that is approved under the Aged Care Act 1997. The amendments propose
to:
A. exempt the former home (principal home) of an aged care resident
from the assets test where he or she is paying an accommodation charge and is
renting their former home (principal home) to a third party (see Item 12);
B. exempt the former home (principal home) of a charge exempt resident
who became a charge exempt resident before 1 July 1999 from the assets test
where that person is renting their former home to a third party (see Item 21,
new clause 17A); and
C. provide for exemptions under the income and
assets tests to:
. exempt the amount of a refunded aged care
accommodation bond (or the proceeds of sale of a resident’s former home
(principal home) in certain circumstances), where the bond was paid from
1 October until 5 November 1997 by a person receiving high level aged care
(see Item 21, new clauses 12 - 16);
. exempt the amount of a refunded
aged care accommodation charge where the refund is made to a charge exempt
resident. (This term applies to a person who, having been a nursing home
resident at the end of 30 September 1997 and therefore not required to pay an
accommodation bond or charge, subsequently moves to another facility. If, as a
result, apart from paragraph 57A-2(1)(b) of the Aged Care Act 1997, the
person would then have been required to pay an accommodation charge for entry to
the new facility, that person is a charge exempt resident. (See Item 6, and
Item 21, new clauses 17B - 17E.)
. exempt from the income test any
amounts that could subsequently be derived from those amounts (in accordance
with the deeming provisions), if the capital amount was invested (see Item 21,
new clauses 14 and 17C);
. exempt any rental income that a person (or
the person's partner) is receiving from their former home (principal home) if
the person (or the person's partner) is paying an accommodation charge (see Item
5);
. exempt any rental income that a person who became a charge exempt
resident before 1 July 1999 (or that person's partner) is receiving from their
former home (principal home).(See Item 21, new clause 17A.)
ITEMS 1,
8,13, 14, 15, 16 and 17
These items all make minor amendments to
references in the VEA to the definition of “principal home”, as a
consequence of the new subsection being added by Item 12.
ITEM 2
Section 5 (index)
This item adds “accommodation bond”
“accommodation charge” and "exempt lump sum" to the defined terms
listed in the index of definitions.
ITEM 3 Subsection 5H(1) (at the
end of the definition of ordinary income)
This item amends the
definition of "ordinary income" by excluding an exempt lump sum
from the definition (see item 6 below).
ITEM 4 Subsection 5H(1) (at
the end of note 1 to the definition of ordinary income
This
item inserts a cross-reference to the new definition of "exempt lump sum".
ITEM 5 After Paragraph 5H(8)(nb)
This item inserts a new
paragraph 5H(8)(nc) to provide that any rental income from a person's
principal home is to be excluded from the service pension and income support
supplement income tests (and hence the income test applicable to aged fees under
the Aged Care Act 1997) if:
. the person or the person's partner
is accruing a liability to pay an accommodation charge; and
. the person,
or the person's partner, receives rent from a third person in respect of their
principal home.
This new paragraph provides that any rental income
exempted from the income test will be exempt for both the person liable to pay
the accommodation charge and the person's partner (if applicable). The
exemption of the rental income will cease when the person ceases to be liable to
pay an accommodation charge.
This amendment, together with the new
subsection 5L(6A) (item 12 below), allows pensioners flexibility in how they
arrange their affairs to pay an accommodation charge and ensures that these
arrangements neither reduce their income support payments nor increase their
daily fees.
ITEM 6 At the end of section 5H
This
item introduces a new provision that will allow the Repatriation Commission to
determine that certain one-off payments are exempt from the income test. Such a
determination may be made with respect to individual amounts or in relation to
classes of amounts, but not if the amount is a periodic amount of maintenance
income (subsection 5K(1A) of the VEA refers) , nor if the amount is income from
remunerative work undertaken by that person . This will allow the Commission to
declare that refunded accommodation bonds and accommodation charges and, in some
cases, the proceeds of the sale of a person's principal home are exempt lump
sums. In other words, it will allow the Commission to declare that the refunded
exempt bond amount, as defined in new clause 16 of Schedule 5 or a refunded
accommodation charge is exempt from the income test. It will also allow
determinations to be made in relation to other lump sum payments, such as
lottery wins and one-off gifts. This provision mirrors a provision (subsection
8(11)) in the Social Security Act 1991.
ITEMS 7 &
11
These items draw the reader’s attention to the new location
of the definitions of an accommodation bond and an accommodation
charge.
ITEMS 9 & 10 Subsection 5L(1)
These items
insert definitions for “accommodation bond” and “accommodation
charge” in the subsection 5L(1) of the VEA. Both terms have the same
meaning as within the Aged Care Act 1997: "Accommodation bond" is
presently defined in that Act and a definition for "accommodation charge" will
be inserted into that Act by Schedule 1 of this Bill.
ITEM 12 After
subsection 5L(6)
This item inserts a new subsection 5L(6A) to extend
the existing provisions that provide for a residence to be deemed to be a
person's "principal home" even though a person is absent from the
home.
The former home of an aged care resident is taken to be the
person's principal home under the VEA (and therefore not assessed under the
assets test) for a period of two years, from the date the person started to be
either an aged care resident or in a care situation (such as community care):
subsection 5L(7) of the VEA refers. These provisions will continue to
apply where appropriate.
New subsection 5L(6A) provides that the former
home of a person will be taken to be the principal home of the person and the
person’s partner during any period where:
. the person left that
residence to go into a care situation or to be an aged care resident (defined in
section 5NC of the VEA); and
. the person is accruing a liability to pay
an accommodation charge because they are receiving high level (nursing home)
care, or would be accruing such a liability except for the imposition of
sanctions on the provider; and
. is receiving rent for their former home
(principal home) from a third party.
Unlike subsection 5L(7), this
subsection does not require continuity from when the person left his or her
principal home and when he or she became liable to pay an accommodation charge.
If a person leaves their principal home and does not move immediately into high
level aged care, but rather moves into some other form of care situation, then
under this new subsection, the previous residence will regain the status of
principal home when the person becomes liable to pay an accommodation charge (or
would be liable except for sanctions) and is receiving rental income from that
property. It is therefore possible that:
. the principal home status of
a former residence may overlap under subsections 5L(7) and 5L(6A);
or
. there may be a period between the application of the 2 year
principal home status under subsection 5L(7) and the application of
subsection 5L(6A) when the former residence does not have principal home
status and therefore is not exempt from the pension assets test.
The
element of continuity in subsection 5L(6A) is that the person must have
continued in some form of care arrangement after leaving his or her principal
home, up until he or she became liable to pay the accommodation charge (or would
be liable except for sanctions), and is receiving rent from the former home
(principal home). Generally this special principal home status for the former
residence will extend for as long as a person is liable to pay an accommodation
charge under the Aged Care Act (Division 57A to be inserted by Schedule 1
of this Bill). Typically, this will be for five years since the charge is
payable for that period.
New paragraph 5L(6A)(b) provides that, if a
premises is taken to be a person's principal home because of the operation of
paragraph 5L(6A)(a), the premises is also taken to be the principal home of the
person’s partner.
This subsection is not intended to provide a
person, or the person’s partner, with more than one principal home at the
same time.
ITEM 18 After subparagraph 46A(b)(ii)
This item
includes in the list of exemptions from the payments covered by section 46A any
amounts determined to be an exempt lump sum under the new
subsection 5(12), being added by Item 6. This means that the amount of the
exempt lump sum is not taken to be a person's
income for the 12 months from the day the person became entitled to receive the
amount.
ITEM 19 At the end of section 52
This item adds a
note to section 52, which deals with certain assets to be disregarded in
calculating the value of a person’s assets, to inform the reader that the
total value of the person’s assets may be reduced if the person has an
exempt bond amount under the new clause 15 of Schedule 5 or a refunded amount
under the new clause 17D of Schedule 5 (to be inserted by item 20 of this
Schedule).
ITEM 20 Before clause 1 of Schedule 5
This
item inserts a sub-heading, Part 1, into Schedule 5 under which clauses 1 to 11
in Schedule 5 will be grouped. This is a minor technical amendment to improve
the structure of this Schedule.
ITEM 21 Before Part 3 of Schedule 5
This item inserts new Parts 2 and 2A, into Schedule 5 of the VEA,
Saving and Transitional Provisions, to provide special provisions
for:
q aged care residents who entered high level
(nursing home) care in the period 1 October to 5 November 1997 and who paid
an accommodation bond or sold their principal home on or before 5 November
1997 in order to be able to pay an accommodation bond. (On 6th
November 1997 the accommodation bond scheme was abolished for aged care
residents in high level care and replaced with an accommodation charge);
and
q those residents who occupied an approved
nursing home bed in a nursing home on 30 September 1997, who subsequently moved
to another nursing home and started paying an accommodation charge. Charge
exempt residents (see new section 44-8B of the Aged Care Act 1997), will
no longer be required to pay an accommodation charge and any accommodation
charges which have been paid will be refunded.
New Clause 12 of Schedule
5 sets out an overview of new Part 2. The new Part will apply to two classes of
people.
The first class are those people who became liable to pay for an
accommodation bond between 1 October 1997 and 5 November 1997, would have been
liable to pay an accommodation charge had that been in place, and who
subsequently agreed to switch to an accommodation charge.
The
accommodation bond scheme was abolished from 6 November 1997 and was replaced
with the accommodation charge scheme. If a person paid an accommodation bond,
the person or the person's partner can request that the nursing home refund the
bond. If the bond is refunded, the person would then, in lieu of the
accommodation bond, pay an accommodation charge. To ensure that persons who
purchased an accommodation bond are not disadvantaged, the refunded bond will be
exempted from the income and assets test.
The second class of people are
those people who either sold their home, or became liable to sell their home
(that is, there was an exchange of contracts), prior to 6 November 1997,
and the Commission is satisfied that the home was sold to purchase an
accommodation bond.
This amendment will ensure that certain amounts
relating to the amount of the bond refunded or the proceeds of the sale are
excluded from the income and assets tests applied to the assessment of the
person's (and the person's partner's) service pension or income support
supplement.
It is intended that the beneficial income treatment will also
cover the partners of the recipient.
New Clause 13 of Schedule 5 sets
out the scope of new Part 2.
New subclauses 13(1) and (2) provide that
the Part applies to a person who:
· between 1 October 1997 and
5 November 1997 became liable to pay an accommodation bond and the person later
made an agreement to replace the liability for the accommodation bond with a
liability to pay an accommodation charge and an accommodation charge would have
been payable for the entry had the person entered residential care after 5
November 1997; or
· on or before 5 November 1997, sold his or her
"principal home" (as defined in subsection 5L(7)) for the sole or principal
purpose of raising money to pay an accommodation bond and an accommodation
charge would have been payable for the entry had the person entered residential
care after 5 November 1997.
The requirement that an accommodation
charge would have been payable, had the person entered residential care after 5
November 1997, ensures that the provision applies only to those persons who paid
an accommodation bond to enter a nursing home level of care.
New
subclause 13(3) provides that the Division applies to the partner of a person
who sold a home or purchased an accommodation bond in the above circumstances,
even if the person is now deceased. This subsection reflects the fact that the
partner was also likely to be affected by the above situations.
New
subclause 13(4) clarifies at what point in time a person is taken to have sold
his or her home. That time is when the person is under a legal obligation to
transfer the title of the property to the buyer. That is, if contracts had been
exchanged as at 5 November 1997, the person would be obligated to continue the
sale.
New clause 14 provides for a person's ordinary income, for the
purposes of the income test, to be reduced by an amount that could subsequently
be deemed from the refunded bond or the proceeds of sale of a home if the amount
were a financial asset of the person. This will ensure that a person is not
penalised by having the service pension or income support supplement payment
reduced because of deemed income from a banked or invested refunded bond or
proceeds of sale. New clause 14 achieves this result by providing that a
person's (and the person's partner's) ordinary income will be reduced by an
amount equal to the amount of income that would be calculated if the deeming
rules were applied to a capital amount equal to the amount of the refunded bond
(or the proceeds of sale of the home, if relevant).
New clause 15
provides that, if a person has an exempt bond amount (as
calculated under new clause 16), then the person's assets are to be reduced by
an amount equal to the exempt bond amount. If a person disposes of the
exempt bond amount for no or inadequate consideration, the usual
provisions relating to deprivation of assets will apply.
New clause 16
provides a method for calculating the reduction in a person's income and assets
(the exempt bond amount) where:
· a
person receives a refunded accommodation bond or proceeds from the sale of a
house; and
· the person satisfies the criteria in clause 13 (see
above).
New subclause 16(2) provides for a situation where a person is
covered by subclause 13(1) only. That is, the situation where a
person:
· became liable to pay an accommodation bond during the
period 1 October 1997 until the end of 5 November 1997;
and
· later entered into an agreement to exchange the bond for an
accommodation charge; and
· would have been liable to pay an
accommodation charge had the person entered residential care after 5 November
1997.
In this case, the person's exempt bond amount is
equal to the amount of the accommodation bond that is refunded to the person
under that agreement.
New subclause 16(3) provides for the situation
where a person is covered by subclause 13(2) only. That is, the situation where
the Commission is satisfied that a person sold his or her home for the sole or
principal purpose of raising money to pay for an accommodation charge and an
accommodation charge would have been payable had the person entered residential
care after 5 November 1997.
In this case the person's exempt bond
amount is equal to the net proceeds of the sale of the house. That is,
the gross proceeds of the sale less any costs associated with the sale and less
debt of the person or the person's partner that was secured by mortgage over the
property at the time of sale.
New subclause 16(4) provides that if both
subclauses 13(1) and 13(2) apply to a person, then the person's exempt
bond amount is equal to the greater of the two amounts. This subsection
will ensure that the person gains the maximum benefit.
New subclause
16(5) provides that a partner of a person to whom subclause 13(1) or 13(2)
applies, or to whom either provision applied before the person died, has an
exempt bond amount, of the same value as the exempt bond
amount worked out for the person under subclause 16(2),
16(3) or 16(4). This ensures that the exemption continue to apply to the
assessment of the income support payments to the partner after the person has
died. If the person is not deceased, then new subclause will
operate.
New subclause 16(6) provides that, if the person is a member of
a couple and is not deceased then the amount of the person (and the person's
partner's) exempt bond amount is half of what it otherwise would
be. This provision means that the value of the exemption is evenly divided
between each member of a couple. The effect of this subclause is consistent
with the usual apportionment of assets between each member of a couple - see
point SCH6-F2 of the VEA. It will mean that if, for example, a person has an
exempt bond amount of $10 000, new subclause 16(5) will attribute
the person's partner with an exempt bond amount of $10 000 and new
subclause 16(6) will operate to halve each of these amounts to $5 000.
If
a person is single (including a person whose partner is now deceased) , then the
person would have the full amount of the exempt bond amount
assessed against the value of their assets.
New Part 2A will apply to
charge exempt residents. A charge exempt resident is a person
who, having been the occupier of an approved nursing home bed at the end of 30
September 1997 and therefore not required to pay an accommodation bond or
charge, subsequently moves to another facility and, as a result, apart from
paragraph 57A-2(1)(b) of the Aged Care Act 1997, the person would
then have been required to pay an accommodation charge for entry to the new
facility.
New clause 17 specifies that the term charge exempt
resident as used in Part 2A has the same meaning as in the Aged Care
Act 1997.
New subclause 17A(1) specifies that clause 17A only
applies if a person first became a charge exempt
resident before 1 July 1999.
New subclause 17A(2) provides
that if, between the time this person first became a charge exempt
resident and 1 July 1999, that person (or the person's partner) earned,
derived or received any rent from his or her principal home, then while he or
she is a charge exempt resident, the amount of that rent is to be
excluded from income used to assess service pension or income support supplement
of the person, or the person's partner. This exemption of rental income will
cease when the person ceases to be a charge exempt
resident.
New subclause 17A(3) relates to the principal home, for
the purposes of the VEA, of a person who first became a charge exempt
resident before 1 July 1999. If the Repatriation Commission is
satisfied that this person left his or her principal home for the purpose of
going into a care situation or to becoming an aged care resident, and if at any
time between the time of leaving the residence and 1 July 1999 the person (or
the person's partner) received rent from another person for the residence, then
the residence continues to be the person's principal home during the any period
the person is both a charge exempt resident and receiving that
rent.
New paragraph (b) provides that whenever paragraph (a) operates in
relation to a person, then the residence can also be taken to be the principal
home of the partner of that person.
New clause 17B prevents any flow-on
effect on the income or assets tests from a refunded accommodation charge.
This result is achieved through the operation of new clauses 17C and 17D.
New clause 17C operates to reduce the income deemed from a person's
financial assets in respect of refunded accommodation charges in the same way
new clause 14 (described above) operates in respect of an exempt bond
amount.
New clause 17D operates to reduce the total value of a
person's assets by the amount of the refunded accommodation charge in the same
way as new clause 15 (described above) applies in respect of an exempt
bond amount..
New subclause 17B(3) explains that new clauses17C
and 17D do not apply to refunds of accommodation charge if the refunds were paid
to the person's estate or to any other person; the beneficial arrangements are
not transferable.
New clause 17E specifies that new Part 2A applies to a
person who is a charge exempt resident at any time, irrespective
of whether they are a charge exempt resident before or after the
commencement of this Part.
SCHEDULE 4 - VETERANS' AFFAIRS LEGISLATION
AMENDMENT
(BUDGET AND SIMPLIFICATION MEASURES) ACT 1997
ITEMS 1 to 4
Items 1 to 4 of Schedule 2 of the
Veterans’ Affairs Legislation Amendment (Budget & Simplification
Measures) Act 1997 attempted to amend references in the Aged Care Act
1997 to Rate Calculators in the Veterans’ Entitlements Act
1986, in order to reflect the new location of those Rate Calculators from
1 January 1998. The amendments in the Veterans’ Affairs
Legislation Amendment (Budget & Simplification Measures) Act 1997 were
unsuccessful because they referred to the wrong subsections in the Aged Care
Act 1997.
These Items are minor technical amendment to rectify the
misdescribed amendments and ensure the correct references are contained in the
Aged Care Act 1997.
SCHEDULE 5 - AGED CARE (CONSEQUENTIAL PROVISIONS) ACT 1997
This Schedule amends the Aged Care (Consequential Provisions) Act
1997 to remedy unintended effects and oversights in that
Act.
ITEMS 1 and 2
These Items add new Clauses 78A and 81A
at the end of Division 1 and Division 2 of Part 4.4, covering consequences of
non-compliance. These Clauses provide that where a provider of a nursing home
or hostel has failed to comply with conditions prior to the commencement of the
Aged Care Act 1997 but no declaration against that failure had been made,
then action can now be taken under Part 4.4 of the Aged Care Act 1997.
It has always been the stated policy intention to take firm action against those
providers who do not meet their obligations and responsibilities and this
provision remedies a technical deficit.
ITEMS 3 AND 4
These
Items add new Clauses 45A and 49A to Schedule 1. These clauses address an
unintended consequence of the transitional provisions relating to additional
recurrent funding for new and rebuilt and upgraded nursing
homes.
Effectively these clauses reverse the repeal of Subsection 52C(3)
and Subsection 58CA(3) of the National Health Act 1953. This will restore
the power to extend the time for approvals-in-principle for additional recurrent
funding where construction has not been commenced within the time. The
withdrawal of this power was never intended and would have had unfair
consequences.