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2019
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
NATIONAL HEALTH AMENDMENT (SAFETY NET THRESHOLDS)
BILL 2019
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Health, the Hon Greg Hunt MP)
NATIONAL HEALTH AMENDMENT (SAFETY NET THRESHOLDS)
BILL 2019
OUTLINE
The Pharmaceutical Benefits Scheme (PBS) operates under Part VII of the National
Health Act 1953 (the Act) and provides Australians with timely, reliable and
affordable access to necessary and cost-effective medicines.
The National Health Amendment (Safety Net Thresholds) Bill 2019 (the Bill) amends
the Act to implement a Government election commitment to lower the Pharmaceutical
Benefits Scheme (PBS) Safety Net threshold amounts that apply to general and
concessional patients.
Reducing the safety net threshold
The amendment in Schedule 1 will make changes to effect reductions in the PBS
Safety Net threshold amounts for concessional and general patients. This will
implement a 2019 election commitment.
Schedule 1 will amend the definition of 'concessional beneficiary safety net' to lower
the concessional beneficiary charge multiplier, and 'general patient safety net', to
establish a lower safety net amount.
This amendment will improve community access to affordable medicines, as
threshold amounts will be reached sooner by patients, allowing them to qualify earlier
each year for access to PBS medicines either at no cost or at a cheaper price.
The measure to lower the PBS Safety Net thresholds was announced as an election
commitment and at the time was welcomed by stakeholders for its benefits to
consumers of PBS medicines. Ongoing consultation has occurred with Services
Australia and the Department of Veterans' Affairs to ensure successful
implementation of the legislation from the date of commencement.
Financial Impact Statement
The amendments in Schedule 1 are estimated to result in the following costs over the
forward estimates period:
Impact on 2018-19 2019-20 2020-21 2021-22 2022-23
Underlying Cash 0.0 -6.0 -104.3 -107.5 -111.0
Balance ($m)
Fiscal Balance ($m) 0.0 -6.4 -109.8 -107.7 -111.2
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
NATIONAL HEALTH AMENDMENT (SAFETY NET THRESHOLDS)
BILL 2019
This Bill is compatible with the human rights and freedoms recognised or declared in
the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
Overview of the Bill
The National Health Amendment (Safety Net Thresholds) Bill 2019 (the Bill) amends
the National Health Act 1953 (the Act) to implement a 2019 Government election
commitment to lower the Pharmaceutical Benefits Scheme (PBS) Safety Net
threshold amounts that apply to general and concessional patients.
Human rights implications
This Bill is compatible with Articles 2 and 12 of the International Covenant on
Economic, Social and Cultural Rights by assisting with the progressive realisation by
all appropriate means of the right of everyone to the enjoyment of the highest
attainable standard of physical and mental health. The PBS assists with advancement
of this human right by providing subsidised access to medicines for Australians.
The amendment to lower the PBS Safety Net threshold amounts will improve
community access to affordable medicines. The threshold amounts will be reached
sooner by patients, allowing them to qualify earlier each year for access to PBS
medicines either at no cost or at a cheaper price.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
The amendments made by this Bill will have a beneficial impact on human rights,
through reduced out of pocket health costs and improved access to PBS medicines.
The Hon Greg Hunt MP, the Minister for Health
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NATIONAL HEALTH AMENDMENT (SAFETY NET THRESHOLDS)
BILL 2019
NOTES ON CLAUSES
Clause 1 - Short Title
Clause 1 provides for the short title of the Act to be the National Health Amendment
(Safety Net Thresholds) Act 2019.
Clause 2 - Commencement
This clause provides for the whole of the Act to commence on 1 January 2020.
Clause 3 - Schedule(s)
This clause provides that legislation that is specified in a Schedule to the Bill is
amended or repealed as set out in the applicable items in the Schedule concerned, and
any other item in a Schedule has effect according to its terms. The Schedule to the
Bill amends the National Health Act 1953 (the Act).
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SCHEDULE 1 -- Safety Net Thresholds
Item 1
This item amends the definition of concessional beneficiary safety net in section 99F
of the Act, revising the amount from being the equivalent of 60 PBS co-payments to
the equivalent of 48 co-payments.
When this amendment takes effect for the entitlement period commencing
1 January 2020, the concessional beneficiary safety net will be the new concessional
beneficiary charge (as defined in section 99F of the Act) as indexed on
1 January 2020, multiplied by 48.
The concessional beneficiary charge for the entitlement period commencing
1 January 2020 is estimated to be $6.60. Based on this estimate, and subject to
variation in indexation, the concessional beneficiary safety net is expected to be
$316.80.
Item 2
This item amends the definition of general patient safety net to be $1,486.80. The
general patient safety net is currently defined as the amount that was the general
patient safety net immediately before 31 December 2009. The amount of $1,486.80 is
based on the successive annual indexation of the amount that was the general patient
safety net immediately before 31 December 2009. It is appropriate to state its current
amount for clarity.
Item 3
This item inserts a new subsection 99G(1A) into the Act, to provide that the general
patient safety net as amended by item 2 is not indexed on 1 January 2020. The amount
of $1,486.80 for the general patient safety net is based on the expected PBS general
co-payment amount for 2020 and is not intended to be subject to the usual indexation
process on 1 January 2020.
The effect of this amendment is that this general patient safety net amount will not be
subject to indexation on 1 January 2020. Indexation will next take place on 1 January
2021, when the amount of $1,486.80 will be understood as the Current figure as
defined in section 99G(3)(a) of the Act - "an amount that has not yet been indexed"
under section 99G - and should thereafter be indexed in accordance with section 99G.
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