Bills Digest no. 84 2005–06
Aged Care (Bond Security) Levy Bill 2005
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Passage History
Aged
Care (Bond Security)
Levy Bill 2005
Date introduced: 8 December 2005
House: House of Representatives
Portfolio: Ageing
Commencement: Commencement: The Bill’s formal
provisions commence on Royal Assent. The substantive provisions commence
at the same time as Schedule 5 to the Aged Care Amendment (2005 Measures
No. 1) Act 2005.(1)
The Aged Care (Bond Security) Levy Bill 2005 (the Levy Bill or the Bill)
will enable the Commonwealth to impose a levy on approved providers of
aged care if it needs to recover its costs (including administrative costs)
after repaying accommodation bonds to aged care residents whose approved
providers become insolvent and default.
The Levy Bill is part of a suite of three Bills. The other Bills are
the Aged Care (Bond Security) Bill 2005 (the Bond Security Bill) and the
Aged Care Amendment (2005 Measures No. 1) Bill 2005 (the No. 1 Bill).
An overview of the purpose of the three Bills is found in the Bills Digest
for the Bond Security Bill.
This Digest should be read in conjunction with Bills Digests Nos. 83
and 85 of 2005–06.
For a background on aged care in Australia and a summary of the financial
implications of the three Bills, see the Bills Digest for the Bond Security
Bill (Bills Digest No. 83, 2005–06).
The Levy Bill, which enables a levy to be imposed, is a stand-alone Bill
separate from the related Bond Security Bill. This separation is done
for an abundance of constitutional caution and is designed to forestall
legal challenges and ensure that the legislation is not invalidated by
the High Court.(2)
Clause 3 applies the legislation to all the States and the internal
Territories (ie the Australian Capital Territory, the Northern Territory
and Jervis Bay Territory).
Clause 4 provides that the Crown in each of its capacities (ie
Commonwealth, State and Territory) is bound by the legislation but not
liable to be prosecuted for breaches of it.
A levy can be imposed on approved providers(3) of aged care
once a costs recoupment determination is made by the Minister (clause
6). Such a determination is made when the Commonwealth has not recouped
money it has paid out in compensation to aged care residents entitled
to bond refunds from a defaulting approved provider or when the
Commonwealth wants to recover associated administrative costs. The Bond
Security Bill provides for the making of costs recoupment determinations
and contains a process via which defaulting approved providers are identified
and arrangements are made for the Commonwealth to compensate affected
aged care residents and recoup its costs.
As stated above, the Bill does not actually impose a levy. Instead, the
rate of any levy will be determined by regulation (clause 7). The
rate cannot exceed the costs recoupment determination amount in any particular
case (clause 8). As the second reading speech for the Levy Bill
points out:
… each default event is likely to be different, [so]
the Government will take the necessary steps to work out the details
of the levy when the situation occurs, including the rate at which the
levy will be recouped. This will enable the Government to consider all
the factors which will influence how and when the levy is to be imposed
and ensure that costs to Government are recouped without jeopardising
quality of care for residents.(4)
While any levy imposed may apply different rates to different classes
of approved provider, it cannot discriminate between providers on the
basis of their location in a particular State or part of a State (clause
9). This proviso has been included with section 99 of the Commonwealth
Constitution in mind. Section 99 reads:
The Commonwealth shall not, by any law or regulation
of trade, commerce, or revenue, give preference to one State or any
part thereof over another State or any part thereof.
Clause 10 is a standard regulation-making clause. Note, however,
any regulations necessary or convenient for facilitating the collection
of the levy-such as who pays the levy, when it is payable, how it is paid,
penalties for late payment, repayment etc-will be made under the proposed
Bond Security Bill.
- Schedule 5 commences six months after the Aged Care Amendment (2005
Measures No. 1) Bill 2005 receives Royal Assent unless commenced earlier
by proclamation. Schedule 5 requires approved providers to provide the
Secretary with written information about such things as accommodation
bonds when requested to do so. This commencement of Schedule 5 is integral
to the effective operation of both the Levy Bill and the Bond Security
Bill.
- As stated elsewhere in this Digest, the Bill does not actually impose
a levy. Rather it enables a levy to be imposed. However, general drafting
practice is followed ie that bills imposing a levy (tax bills) are stand-alone
bills. Even in relation to imposition bills, High Court jurisprudence
suggests that bills imposing taxation may be validly combined with legislation
for the assessment, collection and recovery of taxation (see Permanent
Trustee Australia Pty Ltd v. Commissioner of State Revenue 211 ALR
18). However, bills are separated for an abundance of constitutional
caution springing from section 55 of the Commonwealth Constitution which
reads:Laws imposing taxation shall deal only with the imposition of
taxation, and any provision therein dealing with any other matter shall
be of no effect.
- The expression, ‘approved provider’ is defined in the Aged Care
Act 1997 as ‘a person or body in respect of which an approval under
Part 2.1 is in force, and, to the extent provided for in section
8-6, includes any State or Territory, authority of a State or Territory
or local government authority.’
- Second reading speech, House of Representatives, Hansard,
8 December 2005, p. 15
Jennifer Norberry
Law and Bills Digest Section
Greg McIntosh
Social Policy Section
31 January 2006
Bills Digest Service
Information and Research Services
This paper has been prepared to support the work of the Australian Parliament
using information available at the time of production. The views expressed
do not reflect an official position of the Information and Research Service,
nor do they constitute professional legal opinion.
IRS staff are available to discuss the paper's contents
with Senators and Members and their staff but not with members of the
public.
ISSN 1328-8091
© Commonwealth of Australia 2005
Except to the extent of the uses permitted under the Copyright Act
1968, no part of this publication may be reproduced or transmitted
in any form or by any means, including information storage and retrieval
systems, without the prior written consent of the Parliamentary Library,
other than by members of the Australian Parliament in the course of their
official duties.
Published by the Parliamentary Library, 2005.
|
