Bills Digest 132 1996-97
Aged Care Bill 1997
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
Aged Care Bill 1997
Date Introduced: 26 March 1997
House: House of Representatives
Portfolio: Health and Family Services
Commencement: If the Act receives the Royal Assent by 1 July 1997,
it commences on 1 July 1997. If not, it commences on a day to be fixed
by Proclamation. If it has not been proclaimed to commence within 6 months
after the date of Royal Assent, it commences on the first day after that
period.
The purpose of this Bill is to:
- enable the Commonwealth government to reduce its capital funding involvement
in the aged care industry
- align the classification and funding arrangements for nursing homes
and hostels with a view to improving the standard of accommodation and
care, particularly in respect of nursing homes
- place a greater onus on older people with higher income and assets
to make a greater contribution to the cost of their care.This is achieved,
at least to a large extent, by:
- imposing income testing on all people who receive residential
care, and
- allowing residential care services to negotiate with care recipients
for the payment of accommodation bonds by recipients
- establish an accreditation system for residential care facilities.
The present aged care funding regime differs as between nursing homes
and hostels.
Since the 1950's hostel operators have been permitted to levy charges
on intending residents upon their entry into approved hostel accommodation.This
has resulted ingenerally well maintained accommodation and services for
hostel residents.
Nursing homes have not had the same opportunities to generate sufficient
funds to make capital alterations to premises.Government funding and resident
contributions provide little more than is necessary to cover the daily
cost of providing care.
Readers are referred to the Parliamentary Library's Current Issues Brief
No.27 of 1996–97, entitled Proposed changes to Institutional Residential
Aged Care in Australia for a comprehensive explanation of the background
to this Bill.
It is worth noting that an exposure draft of this Bill was circulated
on 10 February 1997.
This bill consists of 7 Chapters.Chapter 1 is an Introduction.Chapters
2 to 5 are the substantive provisions dealing with subsidies, grants and
the responsibilities of approved providers of aged care.Chapters 6 and
7 are administration and miscellaneous provisions.
The Bill makes provision for the creation of 23 set of principles which
will provide further detail in respect of the matters contained in the
Bill(1)An exposure draft of a number of the principles has been released
and comments on that draft may be made until 15 May 1997.
The Bill uses the basic age pension amount in a number of formulae;
for example the maximum amount of an accomodation bond.For reference purposes
the current basic age pension amount is $347.80 per fortnight or $9,042.80
per year.
Chapter 2 - Preliminary matters relating to subsidies
There are a number of concepts which are fundamental to the scheme of
the legislation.They are:
- 'approved provider' - is a person approved under Part 2.1 as an approved
provider of aged care services.
- 'place' - a capacity of an aged care service to provide care to an
individual.Places are allocated under Part 2.2 and a subsidy can only
be paid under Chapter 3 where an approved provider provides aged care
services in respect of a place which has been allocated.
- 'care recipient' - a person who receives aged care services.Care recipients
must be approved under Part 2.3 before an approved provider can be paid
certain subsidies for providing care.
The Bill contemplates 3 types of care:
- Residential Care - personal care or nursing care or both provided
in a residential facility in which the person is provided with accommodation
and meals (clause 41-3).
- Community Care - personal care and assistance provided to a person
who is not being provided with residential care
- Flexible Care - care provided in a residential or community setting
through an aged care service that addresses the needs of care recipients
in alternative ways to the care provided through residential care services
and community care services.
Part 2.1 - Approval of providers
Regardless of what types of aged care is to be provided, approval is
a precondition to receiving a subsidy under Chapter 3 (clauses
7-1, 42-1, 46-1 and 50-1).
A corporation (not an individual) may apply to be approved as a provider
of aged care (clause 8-2).The Secretary (of the Department of Health
and Family Services) must approve the application if he/she is satisfied
the applicant is suitable to provide aged care (clause 8-1).
In deciding whether an applicant is suitable to provide aged care the
Secretary must consider:
- the suitability and experience of the applicant's key personnel
- the applicant's ability to provide and experience in providing aged
care
- the applicant's ability to meet relevant standards for the provision
of aged care (under Part 4.1)
- the applicant's commitment to the rights of the recipients of aged
care
- the applicant's record of financial management
- if the applicant has been a provider of aged care - its conduct as
a provider, and its compliance with its responsibilities as a provider
and its obligations arising from the receipt of any payments from the
Commonwealth for providing that aged care.
An applicant may be approved in respect of all types of aged care or
may be limited to specified types of aged care or aged care services.The
period during which the approval is in force may or may not be limited
(clause 8-1).
Approved providers are obliged to:
- notify the Secretary, within 28 days, of any change of circumstances
that materially affects the approved provider's suitability as a provider
of aged care and of any change to the approved provider's key personnel
(clause 9-1)
- provide the Secretary, within 28 days of the request, with specified
information relevant to the approved provider's suitability as a provider
of aged care.
Failure to notify or provide information on request is an offence (punishable
by 30 penalty units) and may result in sanctions being imposed under clause
66-1.
An approval will lapse if the approved provider does not provide any
aged care during a continuous period of 6 months (clause 10-2).The
Secretary must revoke an approval if satisfied the approved provider has
ceased to be suitable for approval.However, before revoking approval,
the Secretary must ensure that appropriate arrangements are made for the
continuation of care for the care recipients of the approved provider
(clause 10-3).
Part 2.2 - Allocation of Places
As is mentioned above, a subsidy can only be paid under Chapter 3 where
an approved provider provides aged care services in respect of a place
which has been allocated.
Planning
The Minister determines, for each financial year, how many places
are available for allocation in each State or Territory (clause 12-3).The
Secretary then distributes those places among the regions within the State
or Territory (clause 12-4).The Secretary must also determine, for
the places available for allocation, the proportion of care to be provided
to (clause 12-5):
- people with special needs (i.e. Aboriginal and Torres Strait Islander
communities, people from non-English speaking backgrounds, people in
rural and remote areas and people who are financially or socially disadvantaged)
- concessional residents and assisted residents
- recipients of respite care
- people needing a particular level of care.
The Secretary may establish Aged Care Planning Advisory Committees and
may request advice from a Committee about the distribution of places among
regions and the making of determinations under clause 12-5.
Making Allocations
Where places are available for allocation for a financial year
and have been distributed to a region, the Secretary may invite applications
for allocations of those places (clause 13-2).The invitation must
specify the regions and types of subsidy in respect of which allocations
will be considered, the number of places available in respect of each
types of subsidy and the proportion of care available for allocation that
must be provided to:
- people with special needs
- concessional resident and assisted residents
- recipients of respite care
- people needing a particular level of care.
A person may apply in writing for an allocation of places in response
to an invitation (clause 13-1).
The Secretary may allocate places to an approved provider, in respect
of a particular type of subsidy, to provide aged care services for a region.The
allocation must be one that the Secretary is satisfied would best meet
the needs of the aged care community in the region (clause 14-1).In
deciding which allocation would best meet the needs of the aged care community,
the Secretary must consider (clause 14-2):
- the expertise and experience of the people who manage the aged care
service
- whether the premises used to provide the care are suitably planned
and located
- the ability of the applicant to provide the appropriate level of care
- the measures to protect the rights of care recipients
- the provision of appropriate care for care recipients who are people
with special needs.
The allocation is made subject to such conditions as the Secretary specifies
in writing.Those conditions may include:
- the proportion of care to be provided to people with special needs,
concessional and assisted residents, recipients of respite care, and
people needing a particular level of care
- the period within which the aged care service is to be operational
- the professional planning of the aged care service.
The allocation is also subject to such conditions as are from time to
time determined by the Secretary in writing.
The Secretary may make allocations of places in situations of emergency
(clause 14-9).
Allocations take effect when the Secretary determines that the approved
provider is in a position to provide care.If an allocation is made without
such a determination being made at the same time, the allocation is a
provisional allocation.A subsidy cannot be paid on a provisional
allocation (clause 15-1).
Places may be transferred with the approval of the Secretary.However,
the transferee must be an approved provider and the transfer must not
have the effect of the care to which the place relates being provided
in a different State or Territory (clause 16-1).
An allocation of a place ceases to have effect when the place is relinquished
by the approved provider or when the place is revoked.A place can be revoked
in 2 circumstances:
- where care has not been provided in respect of the place for a continuous
period of 12 months (clause 18-5)
- by way of a sanction for failure to fulfil a responsibility (clause
66-1).
Part 2.3 - Approval of Care Recipients
(Note: Approval of care recipients will also be dealt with in the Approval
of Care Recipients Principles)
Care recipients must be approved under this Part before an approved
provider can be paid a residential care subsidy or community care subsidy
for providing care to the recipient.The recipient of flexible care must
be approved under this Part or fall within a class of people who, under
the Flexible Care Subsidy Principles, do not need approval before an approved
provider can be paid a flexible care subsidy for providing care to the
recipient (clause 20-1).
A person is eligible to be approved as a care recipient of a certain
type of care if the person is eligible to receive that type of care (clause
21-1).
A person is eligible to receive residential care if (clause
21-2):
- the person has physical, medical, social or psychological needs that
require the provision of care
- those needs cannot be met more appropriately through non-residential
care services, and
- the person meets the criteria specified in the Approval of Care Recipients
Principles.
A person is eligible to receive community care if (clause
21-3):
- the person has physical, social or psychological needs that require
the provision of care
- those needs can be met appropriately through non-residential care
services, and
- the person meets the criteria specified in the Approval of Care Recipient
Principles.
A person is eligible to receive flexible care if (clause 21-4):
- the person has physical, social or psychological needs that require
the provision of care
- those needs can be met appropriately through flexible care, and
- the person meets the criteria specified in the Approval of Care Recipient
Principles.
The Secretary must approve a person as a care recipient if an application
is made and the Secretary is satisfied the person is eligible to receive
that type of aged care (clause 22-1).
Before a person can be approved, the care needs of the person must be
assessed unless there are exceptional circumstances which justify making
a decision without an assessment (clause 22-4).
The Secretary may limit the approval to a particular kind of aged care
service, respite care or care for a specified period (clause 22-2).Where
the approval is for residential care, approval may be limited to one or
more levels of care corresponding to the classification levels (see below).
An approval ceases to have effect when it expires (where approval was
granted for a specified period), lapses (if the person is not provided
with care within 12 months of approval) or is revoked (the person has
ceased to be eligible to receive aged care) (clauses 23-1 to 23-4).
Part 2.4 - Classification of care recipients
(Note: The classification of care recipients will also be dealt with
in the Classification Principles)
Care recipients approved under Part 2.3 for residential care, or for
some kinds of flexible care, are classified according to the level of
care they need.The classifications may affect the amounts of subsidy payable
to the approved provider for providing care.
Clause 25-3 obliges the approved provider to appraise the level
of care needed by a care recipient relative to the needs of other care
recipients. The Classification Principles specify the criteria, in respect
of each classification level for determining which level applies to the
care recipient.The types of criteria which may be specified are:
- a care recipient's clinical needs
- the assistance a care recipient requires with the activities of daily
living
- the assistance a care recipient requires with personal care
- the assistance a care recipient requires with communication or sensory
processes
- the care recipient's needs for social or emotional support.
The appraisal must be over a minimum period of 21 days and must be in
a form approved by the Secretary.If (clause 25-4):
- an approved provider gives false, misleading or inaccurate information
in a substantial number of appraisals,
- the classifications made in connection with those appraisals were
changed, and
- after those classifications were changed, the approved provider continued
to give false, misleading or inaccurate information in other appraisals,
the Secretary may suspend the provider from making appraisals and authorise
another person to make appraisals of the care recipients to whom the approved
provider provides care.
Upon receipt of the classification, the Secretary must classify the
care recipient (clause 25-1).
A classification ceases to have effect on its expiry date (12 months
after it took effect) unless it is renewed.
Classifications are renewed by the approved provider notifying the Secretary
of a reappraisal of the level of care needed by the care recipient.If
the care needs of the care recipient change significantly during the period
during which the classification has effect, the reappraisal may be made
at any time during that period (clause 28-2).
Part 2.5 - Extra service places
Extra service places are places in respect of which a significantly
higher standard of accommodation, food and services are provided to care
recipients.Extra service places can attract higher resident fees, but
a lower amount of residential care subsidy is payable.
Extra service places, if provided, must be provided in a distinct part
of the residential care service which must include separate living space
(clause 30-3).
A place is an extra service place where:
- the place is included in a residential care service or a distinct
part of a residential care service which has extra service status
- an extra service fee is in force for the place
- residential care is provided to a care recipient on an extra service
basis, and
- the place meets any other requirements set out in the Extra Service
Principles.
The Secretary invites applications for extra service status by regions
(as with the allocation of places).To be granted extra service status,
the applicant must already have an allocation of places or have applied
for an allocation (clauses 32-1 to 32-3).
The Secretary must be satisfied of the following before granting an
application:
- granting the extra service status would not unreasonably reduce access
to residential care by people living in the region concerned who:
- are concessional residents, or
- are included in a class of people specified in the Extra Service
Principles
- the proposed standard of accommodation, services and food in respect
of each place will be significantly higher than the average standard
in residential care services that do not have extra service status
- if the applicant has been a provider of aged care - the applicant
has a very good record of conduct as such a provider and compliance
with its responsibilities
- if, at the time of the application, residential care is being provided
through the residential care service -the service is certified and the
service meets its accreditation requirements.
Where the total number of extra service places applied for exceeds the
number available, the Secretary must give preference to those applications
that best meet the criteria above and must have regard to the level of
extra service fees proposed in each application (clause 32-5).
Conditions attached to the grant of extra service status are found in
3 places:
- the Bill - clause 32-8 provides the grant of extra service
status is subject to meeting any standards set out in the Extra Service
Principles.It also provides that residential care can only be provided
on an extra service basis through the service or the distinct part of
it except where the care recipient was being provided with residential
care through the service or distinct part before extra service status
was granted
- the Extra Service Principles may set out conditions
- the notice granting extra service status may set out further conditions.Clause
32-8(5) provides that these conditions may relate to:
- minimum standards of food, accommodation and services
- entering into an agreement relating to capital repayment deductions
(see below)
- agreement with care recipients setting out the terms on which
they will receive care on an extra service basis
- the level of the extra service fee.
Fees charged in respect of extra service places must be approved by
the Secretary under clause 35-1.The extra service fee, when calculated
on a daily basis, must be at least $10 per day or such other amount as
is specified in the Extra Service Principles.
New fees can not be approved more than once each year (clause 35-3).
For residential care to be provided on an extra service basis, there
must be an extra service agreement between the care recipient and the
approved provider.Such an agreement must not be entered into in circumstances
under which the care recipient is subject to duress, misrepresentation
or threat of disadvantage or detriment (which includes a threat to cease
to provide care to an existing resident unless the recipient signs an
extra service agreement). An extra service agreement must set out (clause
36-3):
- the level of the extra service amount in respect of the place concerned
(i.e. the extra service fee plus 25%)
- how the extra service amount may be varied
- the standard of accommodation, services and food to be provided to
the care recipient.
Part 2.6 - Certification of residential care services
(Note: The certification of residential care services will also be
dealt with in the Certification Principles)
An approved provider cannot charge accommodation bonds (see below) or
receive concessional resident supplements if the service has not been
certified under this Part.
An application for certification is made to the Secretary (clause
38-1).In considering the application the Secretary must consider:
- the standard of buildings and equipment used by the residential care
service
- the standard of residential care being provided by the residential
care service, and
- if the applicant has been a provider of aged care - its conduct as
such a provider.
The Secretary can require an assessment of the residential care service
by a person or body authorised by the Secretary (clause 38-4).
A certification ceases to have effect when it:
- lapses - as a result of a change in location at which the residential
care is provided
- is revoked - as a result of the Secretary being satisfied that the
service has ceased to be suitable for certification (clause 39-3)
or a request from the approved provider (clause 39-5), or
- is revoked or suspendedunder clause 66-1 - as a result of a
failure to fulfil one or more of the responsibilities of an approved
provider.
The Secretary is empowered to review the certification of a residential
care service at any time and the Secretary may require an assessment upon
such a review (clause 39-4).
Chapter 3 - Subsidies
There is a different subsidy for each type of care, i.e. residential,
community and flexible.
Part 3.1 - Residential care subsidy
Eligibility for a Residential Care Subsidy
An approved provider is eligible for a residential care subsidy
in respect of a day, where during that day:
- the approved provider holds an allocation of places for a residential
care subsidy
- the approved provider provides residential care to an approved residential
care recipient (a care recipient can be taken to be provided with residential
care while he or she is on leave from that care - see below), and
- the residential care service meets its accreditation requirement (see
below).
A care recipient is taken to be provided with residential care when
the recipient is attending a hospital to receive treatment (no limit on
the number of days) and for up to 52 days each financial year (i.e. recreation
leave).
For a residential care service to meet its accreditation requirement:
- it must, before 1 January 2000, apply to an accreditation body for
accreditation of the service
- there must be in force an accreditation of the service or a determination
that the service is taken to meet its accreditation requirement by 1
January 2001 (or another day specified in the Residential Care Subsidy
Principles)
Amount of the Residential Care Subsidy (clause 44-2)
Amount= Basic Subsidy Amount+ Primary Supplements
- Reductions In Subsidy - Income Test Reductions + Other
Supplements The basic subsidy amount (clause 44-3) is the
amount determined by the Minister.Different amounts can be determined
based on:
- the classification levels of care recipients
- whether the residential care is respite care
- the times at which the recipient entered the residential care service
- the State or Territory in which the service is located.
For the purpose of calculating the basic subsidy amount, a patient's
classification level is reduced when the patient is on extended hospital
leave (i.e. 30 days or more) (clause 44-4).
Primary supplements are such of the following supplements that
apply to the care recipient:
- concessional resident supplement - the amount is determined by the
Minister and different amounts can be set based on a number of factors
(clause 44-6(5)).A care recipient is eligible for this supplement
where:
- the recipient's classification level is not the lowest classification
level
- the care service is certified (see above at Part 2.6)
- the care recipient is a concessional resident (i.e. receiving
an income support payment, not a homeowner for 2 years or owns a
home occupied by long term carer eligible for income support, partner
or dependent, and assets worth less than 2.5 times the basic age
pension) or an assisted resident (i.e. concessional resident
but assets can be up to 4 times the basic age pension)
- care provided is not on an extra service basis
- respite supplement - the amount is determined by the Minister and
different amounts can be set based on a number of factors (clause
44-12(4)).A care recipient is eligible for this supplement where:
- they were provided with respite care
- the recipients approval was not limited so as to preclude the
provision of respite care
- the number of days that the recipient has been provided with respite
care does not exceed the maximum set under the Residential Care
Subsidy Principles
- oxygen supplement (clause 44-13) - the amount is determined
by the Minister.It is for the Secretary to determine whether the care
recipient is eligible for this supplement having regard to any matters
specified in the Residential Care Subsidy Principles.
- enteral feeding(2) supplement (clause 44-14) - the amount is
determined by the Minister.It is for the Secretary to determine whether
the care recipient is eligible for this supplement having regard to
any matters specified in the Residential Care Subsidy Principles.
- additional primary supplements (clause 44-16) - the Residential
Care Subsidy Principles may provide for additional primary supplements.The
amount of each supplement is to be determined by the Minister.
There are 3 types of reductions in subsidy:
- extra service reduction (clause 44-18) - this reduction applies
for every day on which care is provided in respect of a place that is
an extra service place.The reduction is an amount equal to 25% of the
daily rate of the extra service fee approved under clause 35-1
(see Part 2.5- Extra Service Places above).
- adjusted subsidy reduction (clause 44-19) - this reduction
applies where the Minister has determined in writing (presumably published
in the Gazette) that the residential care service through which the
care is provided is an adjusted subsidy residential care service.
- compensation payment reduction (clause 44-20) - this reduction
applies for every day which is covered by a compensation entitlement.A
day is covered by a compensation entitlement where the care recipient
is entitled to compensation and the compensation
-
- takes into account the costs of providing residential care (provided
the total compensation payment reductions do not already exceed the
part of the compensation that relates to residential care).
The income test reduction (clauses 44-21 to 44-26)
is calculated as the sum of the income tested reductions for each day
of the payment period.The daily income tested reductions are calculated
as follows:
- calculate the recipient's ordinary income
- calculate the recipient's ordinary income free area
- if the recipient's ordinary income does not exceed their ordinary
income free area, the income tested reduction is zero
- if the recipient's ordinary incomes exceeds their ordinary income
free area, the smallest of the following amounts is the daily income
tested reduction:
- an amount equal to 25% of the excess
- (3 x standard pensioner contribution (i.e. 85% of the basic pension))
less recipient's standard resident contribution ($26.40 or 85% of
the basic pension - clause 58-3)
- the amount calculated by adding the basic subsidy amount and primary
supplements and subtracting the reductions in subsidy.
The other supplements (clause 44-27) are such of
the following supplements as apply to the care recipient:
- pensioner supplement -the amount of this supplement is determined
by the Minister.A recipient is eligible for a pensioner supplement on
a particular day if the recipient was receiving an income support payment,
had a dependent child or was included in a class of people specified
in the Residential Care Subsidy Principles
- The pensioner supplement is not payable where the recipient paid an
accommodation bond (see below) of more than 10 times the basic age pension,
unless the recipient has a dependent child
- viability supplement - the amount of this supplement is determined
by the Minister and different amounts may be determined based upon a
number of factors (clause 44-29(9)).A viability supplement is
payable in respect of a recipient where the Secretary has made a determination
under the section, in accordance with the Residential Care Subsidy Principles,
having regard to the size of the service, the population it serves and
the degree of isolation of the service's location.
- hardship supplement (clause 44-30) - The amount of this supplement
is determined by the Minister and different amount may be determined
based on any matters determined by the Minister.A recipient is eligible
for this supplement where:
- they fall within a class of recipients specified in the Residential
Care Subsidy Principles as recipients for whom paying the maximum
daily amount of resident fees would cause financial hardship, or
- the recipient is determined under clause 44-31 by the Secretary
to be a recipient for whom paying the maximum daily amount of resident
fees would cause financial hardship.
Part 3.2 - Community Care Subsidy
An approved provider is eligible for a community care subsidy in respect
of a day, where during that day:
- the approved provider holds an allocation of places for community
care subsidy
- the care recipient is approved in respect of community care
- a community care agreement is in force under which the care recipient
is to be provided with community care
- the approved provider provides the care recipient with community care
as is required under the community care agreement.
A care recipient can request the approved provider to suspend, on a
temporary basis, the provision of community care (clause 46-2).The
approved provider is taken to provide community care:
- on each day that the recipient attends a hospital for treatment
- on each day on which the recipient is provided with care, other than
by the approved provider, of a type and at a level specified in the
Community Care Subsidy principles
- on each day that the Community Care Subsidy Principles provide that
care is taken to be provided.
The Community Care Subsidy Principles may specify a maximum number of
days for which a recipient may be taken to have been provided with community
care.
The amount of community care subsidy that is payable in respect of a
day is determined by the Minister (clause 48-1).
Part 3.3 - Flexible Care Subsidy
An approved provider is eligible for a flexible care subsidy in respect
of a day, where during that day (clause 50-1):
- the approved provider holds an allocation of places for flexible care
subsidy
- the care recipient is approved in respect of flexible care or is included
in a class of people who, under the Flexible Care Subsidy Principles,
do not need approval
- the flexible care is of a kind for which flexible care subsidy is
payable
The kinds of care for which the flexible care subsidy will be payable
are to be specified in the Flexible Care Subsidy Principles (clause
50-2).The notes to clause 50-2 recite the following
examples:
- care of people with special needs
- care provided in small or rural communities
- care provided through a pilot program for alternative means of providing
care
- care provided as part of coordinated service and accommodation arrangement
directed at meeting several health and community service needs.
The amount of flexible care subsidy is determined by the Minister (clause
52-1).
Chapter 4 - Responsibilities of Approved Providers
The responsibilities of approved providers relate to:
- quality of care
- user rights for people to whom the care is provided
- accountability for the care that is provided.
Part 4.1 - Quality of Care
- (Note: Quality of care will also be dealt with in the Quality of
Care Principles)
The responsibilities of an approved provider in relation to the quality
of aged care are(clause 54-1):
- provide such care and services as specified in the Quality of Care
Principles
- maintain an adequate number of appropriately trained staff to ensure
care needs are met
- provide care and services of a quality consistent with rights and
responsibilities of care recipients specified in the User Rights Principles
- if the care is residential care, comply with Accreditation Standards
(as set out in the Quality of Care Principles - see clause 54-2)
or Residential Care Standards (as set out in the Quality of Care Principles
- see clause 54-3) as appropriate
- if the care is community care or flexible care, comply with the Community
Care Standards(as set out in the Quality of Care Principles - see clause
54-4) or Flexible Care Standards respectively (as set out in the
Quality of Care Principles - see clause 54-5)
- such other responsibilities as specified in the Quality of Care Principles.
These responsibilities only apply in respect of persons to whom care
is provided through an aged care service where:
- subsidy is payable for the provision of the care, or
- the person is approved as a care recipient of the type of aged care
provided to them.
Part 4.2 - User Rights
The responsibilities of an approved provider to a residential care
recipient are to (clause 56-1):
- comply with the requirements in relation to accommodation bonds (see
below)
- charge no more than the permitted amount for the provision of care
(see below)
- charge no more than the permitted amount under the User Rights Principles
by way of a booking fee for respite care
- charge no more for any other care or service than an amount agreed
beforehand
- to provide such security of tenure as is specified in the User Rights
Principles
- to offer to enter into a resident agreement with the care recipient.
The responsibilities of an approved provider to a community care
recipient are (clause 56-2):
- not to charge for the care recipient's entry to the service
- to charge no more than the amount permitted for the provision of care
- charge no more for any other care or service than an amount agreed
beforehand
- to provide such security of tenure as is specified in the User Rights
Principles
- to offer to enter into a community care agreement with the care recipient.
The responsibilities of an approved provider to a flexiblecare
recipient are (clause 56-3):
- comply with the requirements of the User Rights Principles in relation
to an accommodation bond charged for the recipient's entry to the flexible
care service
- charge no more than the permitted amount for the provision of care
(see below)
- charge no more for any other care or service than an amount agreed
beforehand
- to provide such security of tenure as is specified in the User Rights
Principles
- to comply with any requirements of the User Rights Principles relating
to offering to enter into an agreement with the care recipient in relation
to the provision of care.
Approved providers must establish a complaints resolution mechanism
for an aged care service under clause 56-4.
Accommodation Bonds
Basic Rules (clause 57-2)
The rules relating to charging an accommodation bond for the entry into
a residential care service are:
- the residential care service must be certified (see Part 2.6
above)
- entry must not be for the provision of respite care
- the approved provider must comply with the prudential requirements
(there are general prudential requirements which are set out in the
User Rights Principles and specific prudential requirements approved
in relation to an approved provider (clause 57-3 to 57-6))
- the approved provider must have entered into an accommodation bond
agreement with the care recipient within 7 days after the recipient
enters the service
- another person cannot be required to pay the accommodation bond as
a condition of the care recipient entering the service
- the accommodation bond cannot exceed the maximum amount determined
(see below)
- the accommodation bond cannot be charged if a determination is in
force under clause 57-14 that its payment would cause financial
hardship to the recipient
- the approved provider is entitled to income derived from investing
the accommodation bond balance
- amounts must not be deducted from the accommodation bond balance except
in accordance the Act (see below).
Accommodation Bond Agreements (clauses 57-9 to 57-11)
An agreement is an accommodation bond agreement if it sets out the following:
- the amount of the accommodation bond
- the care recipient's date of entry to the service
- how the accommodation bond is to be paid
- when the accommodation bond is payable
- the amount of each retention that will be deducted from the accommodation
bond balance
- when retention amounts are to be deducted
- whether agreeing to pay the accommodation bond entitles the recipient
to specific accommodation or additional services
- any additional resident fees payable as a result of the amount of
accommodation bond disqualifying the care recipient from a pensioner
supplement
- any financial hardship provisions that apply to the recipient
- the circumstances in which the accommodation bond balance must be
refunded.
Amounts of Accommodation Bonds (clause 57-12)
The maximum amount of the accommodation bond is the lowest of the following:
- the amount specified in the accommodation bond agreement (i.e. agreed
by negotiation)
- the amount equal to the value of the recipient's assets less 2.5 times
the basic age pension amount
- the amount specified in, or worked out in accordance with the User
Rights Principles.
Writer's Comment: It is interesting to note that the third limit on
a accommodation bond, i.e. the amount specified in or worked out in
accordance with the User Rights Principles, is an addition to the draft
Bill.It is a significant addition allowing the Minister to cap the amount
of accommodation bonds without the need to pass legislation.
If an accommodation bond is paid by a recipient and the recipient moves
to another care facility, the recipient cannot be required to pay more,
in respect of entry to the new service, than the accommodation bond balance
refunded to the recipient.However, this only applies where the recipient
enters the new service within 28 days after leaving the first (clause
57-13).
A recipient cannot be required to pay an accommodation bond before the
end of the period specified in the User Rights Principles or, if no period
is specified, before the end of 6 months after entering the care service
(clause 57-16).However, amounts representing income derived and
retention amounts are payable from the date of entry into the service
(clause 57-18(2)).
The accommodation bond can be paid in whole or in part by periodic payments,
at the election of the recipient (clause 57-17).
Rights of Approved Providers in Respect of Accommodation Bonds
Approved providers are entitled to retain income derived from the investment
of accommodation bond balances (clause 57-18).
If the care recipient is provided with care for 2 months or less he
or she can be required to pay the amount the approved provider could have
derived through investing the accommodation bond balance for 3 months,
unless the user rights principles specify a lesser amount.
A retention amount may be deducted from an accommodation bond balance
each month or part of month during which the care recipient is provided
with care.The amount of the retention must not exceed the amount specified
in the UserRights Principles (clause 57-20).
Retention amounts may only be deducted for a period of 5 years commencing
on the date on which the recipient entered the care service.The periods
during which retentions are made in respect of the recipient are accumulated
when the recipient moves from one service to another (clause 57-20
and note 57-13).
Refunds
Accommodation bond balances must be refunded when:
- the care recipient dies
- the care recipient ceased to be provided with residential care by
a residential care service conducted by the approved provider (other
than because the care recipient is on leave)
- the residential care service ceases to be certified.
Resident Fees
The resident fee in respect of any day must not exceed the sum of the
maximum amount calculated under clause 58-2(see below) and such
other amounts as are specified in the User Rights Principles.
The maximum amount calculated under clause 58-2 is as follows:
- the standard resident contribution - an amount of $26.40 (indexed)
for those:
- not receiving an income support payment, or
- receiving an income support payment, with no dependent children and:
a) who paid an accommodation bond of more than 10 times the basic
age pension;
or
b) who elected not to supply information for the purpose of determining
ordinary income for the purpose of calculating the income test reduction
(see above).
For those not receiving an income support payment who do not fall within
2), the amount is 85% of the standard age pension (clauses 58-3
and 58-4).
- Add the compensation payment reduction - see calculation
of the residential care subsidy, specifically the reductions in subsidy
(clause 44-20).
- Add the daily income tested reduction - see calculation
of the residential care subsidy, specifically the income test reduction
(clauses 44-21 to 44-26)
- Subtract the amount of any hardship supplement - see
calculation of residential care subsidy, specifically the other supplements
(clause 44-30)
- Add any other amount agreed between the care recipient
and the approved provider in accordance with the User Rights Principles
- If the place in respect of which the residential care is provided
has extra service status, Addthe extra service amount
- which is the extra service fee approved under clause 35-1 (see
Part 2.5- Extra Service Places above) plus 25% of that fee (clause
58-5).
Where a recipient is absent from his or her residential care service,
is not attending a hospital for treatment and has exceeded the limit of
52 days (during which a residential care subsidy is payable notwithstanding
the absence), the recipient can agree to pay a fee to the approved provider
to reserve the recipient's place in the service.The amount of that fee
is limited by clause 58-6 to the sum of:
- the amount that would have been payable if the recipient had been
provided with care (as calculated above), and
- the amount that would have been the residential care subsidy under
clause 44-2 (see above) had the recipient been provided with
care.
A care recipient cannot be required to pay resident fees more than one
month in advance and any fees paid in advance must be refunded upon the
death or departure of the recipient from the service.
Community Care Fees (clauses 60-1 and 60-2)
The maximum daily amount of community care fees are specified in or
determined in accordance with the User Rights Principles.The User Rights
Principles may specify different levels of fees having regard to:
- the recipient's income
- the nature and level of the care and service to which the fee relates
- reduced levels of community care fees for a recipient who would suffer
financial hardship if required to pay the full amount.
A care recipient cannot be required to pay fees more than one month
in advance and any fees paid in advance must be refunded upon the death
of the recipient or the cessation of care.
Part 4.3 - Accountability
Clause 63-1 sets out a list of responsibilities of approved providers.None
of the responsibilities listed are 'new', i.e. they all appear as obligations
elsewhere in the Bill.The significance of them appearing as a collective
list is that clause 65-1 (see below) operates so that non-compliance
with any of the listed responsibilities can attract a sanction under clause
66-1.
Part 4.4 - Consequences of non-compliance
(Note: The imposition of sanctions on approved providers will also
be dealt with in the Sanctions Principles.)
Clause 65-1 provides that the Secretary may impose a sanction
on an approved provider who fails to comply with one or more of its responsibilities
under Part 4.1 (Quality of care), Part 4.2 (User rights)
or Part 4.3 (Accountability).
In deciding whether it is appropriate to impose a sanction, the Secretary
must consider:
- whether the non-compliance is minor or serious
- whether it has occurred before and, if so, how often
- whether the non-compliance threatens the health, welfare or interests
of care recipients
- whether the approved provider has failed to comply with any undertaking
to remedy the non-compliance
- any other matter specified in the Sanctions Principles.
The types of sanctions that may be imposed include (clause 66-1):
- revoking or suspending the approved provider's approval
- restricting the approved provider's approval to aged care services
being conducted at the time the sanction is imposed
- restricting the approved provider's approval as a provider of aged
care services to care recipients to whom care is being provided at the
time the sanction is imposed
- revoking or suspending the allocation of some or all of the places
allocated to the approved provider or varying the conditions attaching
to the approved provider's places
- prohibiting the further allocation of places
- revoking, suspending or prohibiting the grant of extra service status
- revoking or suspending the certification of a residential care service
- prohibiting the charging of accommodation bonds
- requiring the repayment of some or all of the grants paid under Chapter
5 (below) in respect of which the approved provider has not complied
with its responsibilities.
The Secretary is obliged to follow certain steps before imposing a sanction.These
are set out in clause 67-1.
Chapter 5 - Grants
There are 6 specific types of grants;
- residential care grants
- community care grants
- assessment grants
- accreditation grants
- advocacy grants
- community visitors grants.
There is also provision for the Secretary to make other grants, which
in his or her opinion, further the objects of the Act.
Part 5.1 - Residential Care Grants
The Secretary may invite applications for the allocation of residential
care grants.Application for grants can only be made in response to such
an invitation (clauses 71-1 and 71-2).
The allocation must:
- meet the criteria for allocations.These are (clause 72-2):
- a majority of care recipients who receive, or who will receive,
the care to which the grant relates must be either concessional
residents (i.e. receiving an income support payment, not
a homeowner for 2 years or owns a home occupied by long term carer
eligible for income support, partner or dependent, and assets worth
less than 2.5 times the basic age pension) or assisted residents
(i.e. concessional resident but assets can be up to 4 times the
basic age pension)
- a majority of care recipients who receive, or who will receive,
that care must be people with special needs or people of a kind
specified in the Residential Care Grant Principles
- such other criteria as specified in the Residential Care Grant
Principles.
- be the one that best meets the needs of people with special needs.In
deciding this, the Secretary must consider the following (clause
72-3):
- the proportion of care recipients, to whom the care to which the
grant would relate, who are concessional residents or assisted residents
- whether the service to which the grant would relate is located
in a rural or remote area
- the availability of other aged care services in the area
- the need for the grant in order to assist in establishing or upgrading
the service, particularly the building or upgrading of premises
- whether there is an urgent need for the grant because of unforeseen
circumstances.
The grant is not payable until the approved provider enters into an
agreement with the Commonwealth under which the approved provider agrees
to comply with the conditions to which the grant is subject (clause
73-1).Clause 73-2 sets out a number of examples of the types
of conditions to which the grant may be subject.
The amount of the grant is calculated in accordance with the Residential
Care Grant Principles.
Part 5.2 - Community Care Grants
Community care grants may be allocated for:
- establishing a new community care service
- extending an existing community care service to cover additional areas.
The criteria for allocations which must be met are:
- whether there is a need for the community care service
- whether the grant would assist people in rural or remote areas or
Aboriginal and Torres Strait Islander communities
- such other criteria as are specified in the Community Care Grant Principles.
The grant is not payable unless the approved provider enters into an
agreement with the Commonwealth under which the approved provider agrees
to comply with the conditions to which the grant is subject (clause
77-1).Clause 77-2 sets out examples of the types of conditions
to which a grant may be subject.
The amount of the community care grant is the amount specified in, or
worked out in accordance with, the Community Care Grant Principles (clause
78-1).The Principles limit grants to $50,000 per grant and set out
a number of matters for the Secretary to consider in determining the amount
of the grant.
Part 5.3 - Assessment Grants
The Minister may make a grant to a State, Territory or another body
for the purpose of (clause 79-1):
- assessment of the care needs of people seeking approval as a recipient
of residential care, community care or flexible care
- helping people to obtain the types of care and service that best meet
their needs
- monitoring an evaluating the effectiveness of the assessment service
that are provided
- conducting research relevant to the care needs of people and the approval
of people as recipients of care.
Such a grant is an assessment grant.
Part 5.4 - Accreditation Grants
The Secretary may enter a written agreement with a body corporate under
which a grant is made for the following purposes (clause 80-1):
- accreditation of residential care services in accordance with the
Accreditation Grant Principles
- any other purposes specified in the Accreditation Grant Principles,
including the performance of any of the functions of the Secretary under
this Act that are specified in the Accreditation Grant Principles.
Such a grant is an accreditation grant.
Part 5.5 - Advocacy Grants
The Secretary may enter a written agreement with a body corporate under
which a grant is made for the following purposes (clause 81-1):
- encouraging understanding of and knowledge about the rights of recipients
and potential recipients of aged care services on the part of people
who are, or may become:
- care recipients
- people caring for care recipients, or
- people who provide aged care services
- enabling care recipients to exercise those rights
- providing free, independent and confidential advocacy services in
relation to the rights of those people who are care recipients or representatives
of care recipients.
Such a grant is an advocacy grant.
Part 5.6 - Community Visitors Grants
The Secretary may enter a written agreement with a body corporate under
which a grant is made for the following purposes (clause 82-1):
- facilitating frequent and regular contact with the community by care
recipients to whom residential care is provided
- helping care recipients to maintain independence through contract
with people in the community
- assisting such care recipients from particular linguistic or cultural
backgrounds to maintain contact with people from similar backgrounds.
Such a grant is a community visitors grant.
Part 5.7 - Other Grants
The Secretary may enter into an agreement with a body corporate for
the payment of a grant to that body for the purposes specified in the
agreement (clause 83-1).
Chapter 6 - Administration
Part 6.1 - Reconsideration and review of decisions
This Part sets out a consolidated list of the 61 reviewable decisions
which can be made under the Bill.
The Secretary may reconsider a reviewable decision of his or her own
initiative (i.e. without being requested to do so) if he or she is satisfied
that there is sufficient reason to do so (clause 85-4).
A person whose interests are affected by a reviewable decision is entitled
to request the Secretary to reconsider the decision (clause 85-5).The
Secretary must reconsider the decision and either confirm, vary or set
the decision aside and substitute a new decision (clause 85-5).
An application may be made to the Administrative Appeals Tribunal for
the review of a reviewable decision that has been confirmed, varied or
set aside under clause 85-4 or 85-5.
Part 6.2 - Protection of information
This Part prohibits the disclosure of personal information and information
relating to the affairs of an approved provider in certain circumstances
(clause 86-2).It also contains a number of exceptions, being circumstances
in which the Secretary may disclose that information (clause 86-3).
Part 6.3 - Record keeping
(Note: Obligations of approved providers in relation to record keeping
are also dealt with in the Records Principles)
Approved providers must keep records that enable claims for payments
of subsidy to be properly verified and proper assessments to be made of
whether the approved provider has complied with its responsibilities.Those
records must be kept for 3 years after the 30 June of the year in which
they were made (clause 88-1).
Part 6.4 - Powers of officers
This Part sets out the powers of authorised officers to monitor compliance
with the Act.Certain powers can only be exercised with the consent of
the occupier, whilst others can be exercised without consent where a warrant
is obtained.
Chapter 7 - Miscellaneous
Clause 96-1 empowers the Minister to make the 23 sets of Principles
contemplated by the Bill.Those principles are disallowable instruments
for the purposes of the Acts Interpretation Act 1901.
Notwithstanding its length, the Bill provides a bare outline of the
intended scheme for aged care. The 23 sets of principles will contain
the details of the scheme.
One writer has sought to identify some possible concerns as to the constitutionality
of some aspects of the Bill.In particular the possibility of:
- the appropriation of income and retentions from accommodation bonds
being regarded as a tax
- the appropriation of income and retentions from accommodation bonds
being regarded as a acquisition of property otherwise than on just terms
in contravention of section 51(xxxi)
- discrimination occurring between states or parts of states in contravention
of sections 51(ii) or 99 of the Constitution(3).
Those sponsoring the Bill, however, appear to have taken the view that
none of the proposed fees or charges is a compulsory exaction by the Commonwealth.Similarly,
it is possible to argue that the issue of discrimination does not arise
because the Bill itself does not discriminate between States or parts
of States.Any discriminatory treatment is endemic in the demographics
of the aged population(4).
The Senate Community Affairs Committee is presently inquiring into aged
care funding.Public hearings were held on 17 and 18 April 1997 and the
Committee's report is due on 15 May 1997.A few of the issues raised at
the hearing are as follows:
- it was expressed that there should be greater prescription of the
number of nursing staff and nursing hours given that acquittal of funding
is no longer required ('acquittal' refers to a nursing home accounting
for the expenditure of a subsidy to ensure that all of the subsidy is
spent on providing care)
- there is no obligation on approved providers to apply income or retentions
from accommodation bonds to capital renovations
- Community Services Australia (CSA) - a division of the Uniting Church
(Rev. Harry Herbert) emphasised the significance of the percentage of
concessional residents which a nursing home will be required to take.If
this level is set too low, concessional residents could find themselves
waiting longer for a place than a resident who could afford to pay an
accommodation bond and could also find themselves being forced to move
a considerable distance from their community as a result of an unequal
distribution of available places.
- CSA speculated that a likely accommodation bond would be about $88,000
to be sufficient to generate income to replace current funding.
- Concern was expressed by the Council of the Ageing, that the minimum
level of assets after paying an accommodation bond, i.e. about $22,500,
was too low.
- Accountability Principle
Accreditation Grant Principle
Advocacy Grant Principle
Allocation Principle
Approval of Care Recipients Principle
Approved Provider Principle
Assessment Grant Principle
Certification Principle
Classification Principle
Committee Principle
Community Care Grant Principle
Community Care Subsidy Principle
Community Visitors Grant Principle
Extra Service Principle
Flexible Care Subsidy Principle
Information Principle
Other Grants Principle
Quality of Care Principle
Records Principle
Residential Care Grant Principle
Residential Care Subsidy Principle
Sanctions Principle
User Rights Principles
- Enteral feeding is a method of feeding the appropriate formula to
a patient by means of a tube passed into the stomach from the nasal
passage. It is used for patients who for some reason are unwilling or
unable to masticate or swallow food.
- Pulle, B. Proposed Changes to Financing Aged Care - Some Tax and Constitutional
Issues, Current Issues Brief No.28 of 1996–97.
- Western Australia v. The Commonwealth (Native Title Act Case) (1994–95)183
CLR 373 at 478
Lee Jones
5 May 1997
Bills Digest Service
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whether the subsequent Act reflects further amendments.
IRS staff are available to discuss the paper's contents with Senators
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ISSN 1328-8091
© Commonwealth of Australia 1997
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Published by the Department of the Parliamentary Library, 1997.
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Last updated: 8 May 1997
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