Bills Digest no. 85 2005–06
Aged Care Amendment (2005 Measures No. 1) 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 Amendment (2005
Measures No. 1) Bill 2005
Date introduced: 8 December 2005
House: House of Representatives
Portfolio: Ageing
Commencement: The Bill’s formal provisions
commence on Royal Assent. The substantive provisions commence six months
after Royal Assent unless commenced earlier by proclamation.
The Aged Care Amendment (2005 Measures No. 1) Bill 2005 (the No. 1 Bill)
will enable the strengthening of existing prudential requirements related
to accommodation bonds especially in relation to liquidity, record keeping
and disclosure. These new prudential requirements will be developed over
time and will be subject to review.
The No. 1 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 (Bond Security) Levy Bill 2005 (the Levy Bill). An overview
the purpose of the package of 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 84 of 2005–06.
For background information on aged care in Australia and a summary of
the Bills’ financial implications, see the Digest for the Bond Security
Bill (Bills Digest No. 83, 2005–06).
Flexible care services are those that are provided outside the normal
residential and community care system. One example of this is that in
some rural/regional areas there are Multipurpose Services that provide
care more 'flexibly' because some aged and health care services may not
be viable in small communities if provided separately. Economies of scale
can often be achieved in this way. Residential aged care services are
essentially beds (and care) in residential aged care facilities, formerly
called nursing homes and hostels.
The purpose of much of Schedule 1 is to ensure that residents
of flexible care services are afforded the same protections as residents
in residential aged care services.
Item 1 requires approved providers of flexible care services to
comply with not only with the User Rights Principles(1) (the
current requirement) but also with Division 57 of the Aged Care Act
1997 (‘the Aged Care Act’). Division 57 deals with rules about accommodation
bonds that must be complied with by approved providers.
Items 2-49 amend specific provisions in Division 57 so that particular
rules about accommodation bonds apply to approved providers of flexible
care services residents in as well as to approved providers of residential
aged care services. For instance, items 13-17 apply rules about
the content of accommodation bond agreements to approved providers of
flexible care services (currently these rules only apply to approved providers
of residential aged care). Items 40-43 apply the rules about refunding
accommodation bond balances to approved providers of flexible care services.
Item 50 amends existing section 66-1 of the Aged Care Act so that
the charging of accommodation bonds or the accrual of accommodation charges
by either a provider of residential aged care services or a provider of
flexible care services is prohibited if that provider has not complied
with its responsibilities under Parts 4.1, 4.2 or 4.3 of the Act. These
Parts of the Act relate to quality of care, user rights and accountability.
The amendments in Schedule 2 mean that rules applying to approved
providers of residential care services and flexible care services that
hold accommodation bonds will also apply to approved providers that hold
entry contributions paid before 1 October 1997. The Explanatory Memorandum
explains:
This is because entry contributions paid prior to 1 October
1997 are akin to accommodation bonds and should be subject to the same
prudential regulation. Residents who have paid entry contributions should
also be afforded the same protections as residents who have paid accommodation
bonds.(2)
Item 1 of Schedule 3 provides that approved providers will
comply with prudential requirements if they comply with new Prudential
Standards that will be made under proposed new section 57-4. Proposed
new subsection 57-4(1) provides that the User Rights Principles may
set out Prudential Standards. It then defines prudential standards as
standards providing for the protection of accommodation bond balances
and entry contribution balances of care recipients, sound financial management
of approved providers and the provision of financial management information.
Examples of matters that may be dealt with by the Prudential Standards
include corporate governance requirements, financial reporting requirements,
insurance requirements and information retention and provision requirements
(proposed new subsection 57-4(2)).
It is intended that initially there will be three standards; a liquidity
standard, records standards and information standards. The implementation
of the last two standards will assist the operation of the guarantee and
recoupment schemes provided for under the Bond Security and Levy Bills.
For instance, the records standard will mean that approved providers holding
bonds will establish and maintain independently audited accommodation
bond registers.
Items 2 and 3 repeal provisions that will become redundant
with the enactment of the amendments made by item 1.
Items 1-6 of Schedule 4 deal with timeframes and notice
periods for the refund of accommodation bond balances when, for example,
care recipients die or move to other care. For instance, at present if
a care recipient dies an approved provider must refund any bond balance
within 60 days of being shown a grant of probate or letters of administration.
The amendments will reduce the period to 14 days (item 1). In some
other circumstances the notice period will be extended. For example, at
present if a care recipient moves from one residential care service to
another, they must be refunded their bond balance on the date they leave
the first service if they have given their provider at least seven days
notice. Item 2 stipulates that at least 14 days notice be given.
Item 7 provides that where an approved provider refunds an accommodation
bond balance, they must calculate the interest to be paid in accordance
with the User Rights Principles. Further, payment must be made to the
person specified in those Principles. The Explanatory Memorandum explains
that:
This proposed amendment enables a current inequity to
be addressed. Currently residents can be charged interest on the accommodation
bond to be paid to an approved provider from the day the resident enters
a service until the day that the bond is paid, yet approved providers
are not required to pay interest to a resident from the day the resident
leaves the service until the day the bond balance is repaid.(3)
Item 1 of Schedule 5 inserts proposed new section 9-3A
into the Aged Care Act. This new section will enable the Secretary of
the Department to require an approved provider to provide information
including information relating to accommodation bonds, accommodation bond
balances, and entry contributions. This information must be provided within
28 days after the request is made or such shorter time as is specified
in the request. A note alerts the reader to the fact that sanctions are
available under Part 4.4 of the Act if an approved provider fails to comply.
Further, if the approved provider is a corporation, failure to comply
with the request within the specified period is an offence subject to
a maximum penalty of 30 penalty units ($3300).
Item 2 adds an additional exception to the general prohibition
on approved providers disclosing ‘personal information’(4)
relating to a person for whom they provide aged care services. This will
enable approved providers to provide personal information relating to
accommodation bonds and entry contributions etc to the Secretary.
The amendments in Schedule 5 are an integral part of the proposed
scheme for guaranteeing payment of all outstanding bond balances to aged
care recipients and enabling the Commonwealth to recoup its costs as provided
for in the Bond Security Bill and the Levy Bill. They enable the Commonwealth
to require defaulting approved providers to provide information about
outstanding bond balances so that affected aged care recipients can be
recompensed by the Commonwealth. They also provide a basis on which the
Commonwealth can recoup this money via a levy or otherwise.
Item 1 of Schedule 6 changes the latest date for tabling
the annual report on the operation of the Aged Care Act from 30 September
to 30 November.
The Explanatory Memorandum explains that:
As part of the proposed new Prudential Standards to be
made under the User Rights Principles, approved providers will be required
to report certain information about compliance with the new Standards
to the Secretary by 31 October each year. By changing the date for tabling
of the annual report … from 30 September to 30 November … this will
enable analysis of information provided by approved providers to be
undertaken and for relevant results to be included in the annual report.(5)
Item 1 of Schedule 7 contains the standard regulation-making
provision and also specifically allows regulations to be made governing
transitional matters.
- The User Rights Principles are part of the general legislative
framework that covers the Commonwealth's role in aged care. That framework
includes the Aged Care Act 1997 and the Aged Care Principles
that are made under that Act. There are various sets of principles including
those relating to User Rights ie the rights of older people using services
provided under the Aged Care Act. For more detail see the following
link - http://www.health.gov.au/internet/wcms/publishing.nsf/Content/ageing-legislat-legindex.htm
- Explanatory Memorandum, p. 5.
- Explanatory Memorandum, p. 8.
- The Aged Care Act defines ‘personal information’ as ‘information
or an opinion (including information or an opinion forming part of a
database), whether true or not, and whether recorded in a material form
or not, about an individual whose identity is apparent, or can reasonably
be ascertained, from the information or opinion.’
- Explanatory Memorandum, p. 10.
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
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Published by the Parliamentary Library, 2005.
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