The Aged Care Amendment (2008 Measures No. 2) Bill 2008

The Aged Care Amendment (2008 Measures No. 2) Bill 2008

1.1        On 16 October 2008 the Senate, on the recommendation of the Selection of Bills Committee, referred the provisions of the Aged Care Amendment (2008 Measures No. 2) Bill 2008 (hereafter 'the bill') to the Community Affairs Committee for inquiry and report by 20 November 2008.

1.2        The inquiry was advertised in The Australian and through the Internet. The committee wrote to interested individuals and groups inviting submissions. The committee received submissions from 16 individuals and organisations, and these are listed at Appendix 1. The committee held a public hearing in Canberra on 14 November 2008. Details of the public hearing are referred to in Appendix 2. The submissions and Hansard transcript of evidence may be accessed through the committee's website at

1.3        The committee notes that the Senate's Finance and Public Administration committee is currently holding a broader inquiry into residential and community aged care in Australia, and has sought not to traverse any such broader issues in discussing the bill before the committee.


Residential aged care

1.4        Many older Australians receive care in residential aged care facilities, and there are now around a thousand organisations providing approved care.[1] Residential aged care comprises a range of supported accommodation services for older people who are unable to continue living independently in their own homes. It includes high level and low level care, depending on the amount of assistance the resident requires. There are also programs that support care in the home or home-like environments, including Community Aged Care Packages and Extended Aged Care at Home.[2]

1.5        Residential aged care is governed by the Commonwealth's Aged Care Act 1997 (hereafter 'the Act') and the User Rights Principles. The legislation, administered by the Department of Health and Ageing (DOHA), does two things. First, it sets out objectives for the aged care sector. These are:

to promote a high quality of care and accommodation for the recipients of aged care services that meets the needs of individuals;

to protect the health and well-being of the recipients of aged care services;

to ensure that aged care services are targeted towards the people with the greatest needs for those services;

to facilitate access to aged care services by those who need them, regardless of race, culture, language, gender, economic circumstance or geographic location;

to provide respite for families, and others, who care for older people;

to encourage services that are diverse, flexible and responsive to individual needs;

to help those recipients to enjoy the same rights as all other people in Australia;

to plan effectively for the delivery of aged care services

to promote ageing in place through the linking of care and support services to the places where older people prefer to live[3]

1.6        Second, the Act underpins Commonwealth funding of aged care. It establishes principles for funding, stating that it will take account of quality, type and level of care; the accessibility of care; the outcomes achieved by service providers; and the need for accountability, both for funding and for care outcomes.[4]

1.7        The Commonwealth's residential aged care program provides funding for aged care services. The program is characterised by 'funding, user charging, and regulatory arrangements that apply across the whole Australian Government funded residential aged care sector'.[5]

1.8        A 2006 paper summarised funding arrangements for aged care:

[T]he Commonwealth provides approximately three-quarters of the total funds available (mainly via residential care subsidies and capital grants to providers). The remaining funding comes from permanent residents in aged care facilities paying accommodation and daily living charges. Most of the funding comes via the Commonwealth Department of Health and Aged Care but there is also specific residential aged care funding via the Department of Veterans’ Affairs for aged veterans.[6]

1.9        The majority of aged care services continue to be provided by not-for-profit organisations,[7] with Catholic Health Australia for example being the 'largest non-government provider grouping of aged care services'.[8]

Approved providers

1.10      In order to receive Commonwealth funding for aged care, the service provider must be an approved provider.[9] Approval as a provider of aged care is granted upon application to the Secretary of the Department of Health and Ageing, provided the service provider meets certain conditions.[10] These conditions include that the applicant:

has shown that specific criteria have been met: the capacity to deliver appropriate standards of care, managerial and financial skills, and that key personnel are not 'disqualified individuals'.[11]

1.11      'Key personnel' is a term defined in the Act, and, in respect of applicants for approved provider status, means:

  1. a member of the group of people who are responsible for the executive decisions of the applicant;

  2. any other person who is concerned in, or takes part in, the management of the applicant;

  3. any person who is responsible for the nursing services provided, or to be provided, by the aged care service conducted, or to be conducted, by the applicant;

  4. any person who is responsible for the day‑to‑day operations of an aged care service conducted by the applicant, whether or not the person is employed by the applicant;

  5. any person who is likely to be responsible for the day‑to‑day operations of an aged care service that the applicant proposes to conduct, whether or not the person is employed by the applicant.[12]

1.12      'Disqualified individual' also has a particular meaning under the Act, and refers to situations where:

  1. the individual has been convicted of an indictable offence; or

  2. the individual is an insolvent under administration; or

  3. the individual is of unsound mind.[13]

1.13      An approved provider may be a corporation, a state or territory government, or a local government authority.[14]

Aged Care Assessment Teams

1.14      While the secretary of DOHA makes assessments of care providers to see whether they qualify to be approved providers, there is also an assessment process of the individuals seeking care, to determine whether they are eligible for subsidy, and what sort of care they require.[15] These assessments are made by an Aged Care Assessment Team (ACAT).[16] ACATs are generally multidisciplinary teams of health professionals, funded by the Commonwealth through the states and territories,[17] as the operational arm of the Commonwealth's Aged Care Assessment Program.[18]

1.15      In 2006, the Council of Australian Governments (COAG) agreed to reform aspects of aged care delivery, including 'that there be more timely and consistent assessments for frail older people by Aged Care Assessment Teams and simplified entry and assessment processes for the Home and Community Care Program'.[19] This resulted in a review of the operation of ACAT teams that, while positive about their role and professionalism, identified issues with consistency of assessment approach, capacity and timeliness, as well as complexity, particularly from the point of view of clients and carers.[20] The Review noted that there may be some unnecessary re-assessments of care needs, stretching resources that are already in heavy demand.[21]

Accommodation bonds

1.16      One of the key elements of the funding arrangements, relevant to the bill before the committee, is accommodation bonds. Accommodation bonds are charges levied on a person when they enter low level approved residential care.[22] Not all low level care recipients pay these bonds: there is an assets test.[23] The bonds are held by aged care providers for as long as the person is in care. The service provider is allowed to draw on the investment income from the bonds to help fund capital works, debt retirement or, in limited circumstances, to improve the quality and range of care services.[24] Unlike accommodation charges, bonds must be refunded (apart from some allowable deductions)[25] when the person leaves low level care.[26]

1.17      Accommodation bonds represent a major asset base within the aged care sector. At 30 June 2007, bonds held by aged care service providers were worth $6.3 billion.[27]

1.18      The Commonwealth's Aged Care (Bond Security) Act 2006 provides, in certain circumstances, a Commonwealth guarantee underpinning aged care accommodation bonds in the event that an approved aged care service provider becomes insolvent.[28]


The bill

1.19      The bill seeks to amend the Act, and the Aged Care (Bond Security) Act 2006, 'to address current legislative inadequacies and maintain effective regulatory safeguards for ensuring high quality care for older Australians'.[29] It reflects the fact that the legislation is over ten years old, and in that time the aged care sector has evolved and changed substantially. In particular,

a different model of aged care has emerged, one in which the owner and operator of a facility have distinct roles and responsibilities and may function quite separately. The last decade has also seen a significant increase in the level of investment in the sector from large corporate entities. The regulatory framework has not kept pace with this shift in business practice.[30]

1.20      The government has indicated that the bill makes changes to aged care regulation in three areas: the regulation of approved providers; the framework for assessments made by Aged Care Assessment Teams; and the protection of residents' accommodation bonds.[31]

1.21      The regulation of approved providers is to be improved in several ways:

1.22      The bill will reduce the number of ACAT assessments needed to ensure that people receiving high level care, respite care or flexible care may continue to be eligible for that care. Currently, older Australians requiring these categories of care are generally assessed every twelve months.[37] The bill will remove this requirement, though 'reassessment should occur at any stage if there has been a change in the care recipient's care needs'.[38]

1.23      The bill amends both the Act and the Aged Care (Bond Security) Act to improve the security of accommodation bonds:

Experience with the operation of the Aged Care (Bond Security) Act 2006 has highlighted that the Guarantee Scheme only operates in regards to current approved providers and does not protect bonds when the approved provider status has lapsed or been revoked before the refund declarations have been made.[39]

1.24      The bill extends the application of the bond scheme's rules (such as time frames for bond refunds), and also extends the reach of the government's Guarantee Scheme.[40]

1.25      In addition to these changes, there are a range of other more minor amendments, such as the introduction of an additional mechanism for transferring provisionally allocated aged care places in exceptional circumstances.[41]


Departmental consultations

1.26      The Department advised the committee that the bill had been

the subject of extensive consultation with the aged care sector through the Aged Care Assessment Program officials and the Ageing Consultative Committee which comprises peak industry, professional and consumer bodies.[42]

1.27      The Department indicated that some changes were made to proposed amendments as a result of these consultations. Officials at the hearing emphasised that the Consultative Committee is very representative of the industry.[43] However, in response to committee concern raised during the hearing, DOHA undertook to write to stakeholders regarding some of the matters raised during this inquiry.[44]

1.28      DOHA also indicated that two matters have been raised with them since the introduction of the bill. It had discussed these issues directly with concerned stakeholders, but also drew these matters to the attention of the Committee. The first concerned introducing deterrence as a factor in determining sanctions against non-complying service providers. The Department indicated that concerns were raised that 'this amounts to punishment and is inappropriate'. The Department indicated that the purpose of the amendment was to ensure that action can be taken against non-compliance 'even where there may be no immediate impact on the health, safety or well-being of care recipients'.[45] This matter is discussed further below.

1.29      The Department indicated that clarifying material regarding the reforms would be made publicly available in November 2008.[46] Clarification in relation to police check provisions and some other matters was provided to the committee in its supplementary submission to this inquiry.[47]

1.30      Several submitters raised concerns about the public consultations and how DOHA presented them. Some indicated that they had indeed been consulted, but wanted to emphasise that they had not, and did not, agree with some of the proposals they were consulted upon.[48] Others indicated they had not been a part of consultation processes, and hoped that the reform process would be delayed to conduct more extensive discussion and education with the sector.[49]


Support for the bill

1.31      There was support for the measures in the bill. The aged care lobby group were 'pleased to see that amendments are being made' to the Act.[50] The Australian Medical Association (AMA) 'supports the measures in the Bill to reduce the number of unnecessary reassessments for residential respite care and high level residential care'.[51] The NSW Nurses' Association believed that the bill 'offers changes that will benefit care recipients, providers of aged care services and the government'.[52] The Combined Pensioners and Superannuants Association (CPSA) of NSW welcomed the changes to the definition of 'key personnel', changes to the operation of ACAT teams, and new measures to protect residents' bonds.[53] Aged Care Crisis Team also supported the bill.[54] Aged and Community Services Australia (ACSA) indicated that changes to ACAT team operations will be a valuable step forward.[55]

1.32      ACSA also supported some other aspects of the legislation, such as the linking of approved provider status to the allocation of funded places. ECH Inc supported the legislation, 'but believes that several aspects of the amendments require clarification'.[56] Catholic Health Australia (CHA) provided 'broad support' for the bill, but had concerns in particular areas.[57]


Issues with the bill

1.33      A number of stakeholders were critical of elements of the bill. ACSA stated that, while consultation had taken place, 'there was no unanimity between the Government and other stakeholders on some key points', and there are areas where they and other stakeholders 'did not support the final version of the measures proposed in the bill'.[58] The Aged Care Alliance (TACA) is a Queensland-based industry organisation that was sharply critical of the legislation.[59] TACA stated that:

[t]he amendments will impose additional compliance costs upon a highly regulated sector and will have the effect of further increasing the level of regulatory complexity and inefficiency. We submit that the rationale for those particular amendments is flawed and that they represent poor public policy.[60]

1.34      The main areas in which industry stakeholders had concerns were:

The definition, and consideration of the suitability, of 'key personnel'

1.35      The current legislation requires the Secretary to consider whether an applicant for approved aged care places is suitable for the task.[61] In broad terms, that consideration includes whether the applicant can provide quality care, whether the applicant can implement sound financial management, and whether the applicant's 'key personnel' are suitable and experienced.

1.36      'Key personnel' has a particular meaning under the Act. It currently states that such personnel include:

  1. a member of the group of people who are responsible for the executive decisions of the applicant;

  2. any other person who is concerned in, or takes part in, the management of the applicant;

  3. any person who is responsible for the nursing services provided, or to be provided, by the aged care service conducted, or to be conducted, by the applicant;

  4. any person who is responsible for the day‑to‑day operations of an aged care service conducted by the applicant, whether or not the person is employed by the applicant;

  5. any person who is likely to be responsible for the day‑to‑day operations of an aged care service that the applicant proposes to conduct, whether or not the person is employed by the applicant.

(4)  A person referred to in paragraph (3)(c) must hold a recognised qualification in nursing.

The bill proposes to change these arrangements in three respects.

1.37      First, it would allow the Secretary to consider not only the record of the applicant seeking to become an approved provider, but also the record of related approved providers who share key personnel with the applicant.

1.38      Second, it would amend the definition of key personnel. Clause (b), which refers to 'any other person who is concerned in, or takes part in, the management of the applicant' would be replaced with 'any other person who has authority or responsibility for (or significant influence over) planning, directing or controlling the activities of the entity at that time'.[62] The intention behind this amendment is to keep pace with changes to business structures occurring amongst some providers in the sector. The Explanatory Memorandum states:

As business structures have changed it has become more likely that control may be exercised over an approved provider by a variety of individuals and organisations that may be outside the immediate entity that constitutes the approved provider. For example, an approved provider entity may form part of a collection of companies managed by another company.[63]

1.39      The government is proposing to amend the legislation to ensure that those directing or controlling the approved provider, whether or not they might be considered to be directly managing its operations, are recognised as key personnel whose decisions may have a bearing on 'the quality of care and the financial viability of the provider'.[64]

1.40      Third, the bill would provide some guidance as to who are the people responsible for 'executive decisions' under the first clause of the definition. The bill indicates that these would include directors of a body corporate if the applicant is an incorporated entity, and a 'member of the entity's governing body' in all other cases.[65] This provision is intended to clarify the application of the 'key personnel' definition, but not to change it.

1.41      TACA was critical of the proposal to require the Secretary to consider the record of key personnel in related entities when considering the suitability of an applicant for approved provider status. TACA stated:

The proposal ignores the existing criteria under the Aged Care Act 1997 for applications where there are adequate criteria for establishing the responsibilities of key personnel. It is usual in commercial and service organisations for the owners to place responsibility on management to meet the requirements of regulation and compliance.[66]

1.42      TACA was also concerned that the inclusion of 'any other person who has authority or responsibility for (or significant influence over) planning, directing or controlling the activities of the entity at that time' was too broad. TACA suggested this would capture 'all decision-making within the commercial [entity], including, for example, financiers whose influence, while essential, would traditionally fall outside what was considered relevant and operational'.[67] A number of submitters likewise argued the effect of this section would be unclear, in particular in respect of its possible extension to members of church councils in the case of providers that are operational arms of a church organisation.[68]

1.43      CHA pinpointed the use of the expression 'having significant influence over' planning, directing or controlling the aged care provider as a particular issue.[69] They noted that DOHA was indicating that the measure 'is not designed to include those sporadically involved in decision making or all leaders within the organisation, unless they are actively involved in making financial or managerial decisions which affect the aged care service (eg. Church leaders who do not involve themselves in the executive decisions of the aged care service'.[70] They nevertheless were not reassured, arguing that whatever DOHA might indicate was the intention behind the bill, it will not alter the legal effect of the provision, which was potentially very broad.[71]

1.44      DOHA indicated that the general wording of this part of the definition 'is based on the accounting standard AASB124: Related Party Disclosures'.[72] That standard provides a definition of 'significant influence':

The power to participate in the financial and operating policy decisions of an entity, but is not control over those policies. Significant influence may be gained by share ownership, statute or agreement.[73]

1.45      The committee believes that some of the industry's concerns are based on misunderstandings. TACA's first criticism implies that the purpose of this amendment is to deal with the responsibilities of key personnel. TACA argue, for example, that 'Serious non compliance by "common key personnel"' should be rectified by the applicant.[74] That may well be the case, and is indeed the assumption underlying the existing non-compliance provisions of the legislation. However, that is an issue unrelated to the purpose of section 8 of the Act (and bill). This section is about what the Secretary should consider when determining an applicant's suitability, not how the entity should be managed, nor how breaches should be rectified. The committee believes it is appropriate that the Secretary be able to consider the skills, experience and track record of closely related entities in the manner envisaged by the bill.

1.46      TACA's second criticism was that revisions to the definition of key personnel would cast too wide a net. The new definition does potentially broaden the range of key personnel, but it must be kept in perspective by remembering the purpose of the clause. These personnel are only being considered in relation to their suitability and experience as it is relevant to an application to become an approved provider. If the role of the financiers, for example, was not 'relevant and operational', then it would not present a problem for securing approval under the Act. The amendments ensure, however, that players with the potential to have a significant bearing on the quality or financial management of aged care do not escape scrutiny altogether merely because of the nature of providers' business structures.

Missing residents

1.47      ACSA stated that during consultations prior to the introduction of the bill, both service providers and consumers did not support changes concerning the reporting to DOHA of unexplained absences of residents from aged care facilities.[75] ACSA argued:

There is a risk that in seeking to protect potentially vulnerable older people we deny them the freedom to take risks available to other members of the community. We should be very wary of restricting people’s liberty in order to avoid bureaucratic or political embarrassment. We should take pains not to inadvertently compound the institutional character of residential aged care by denying residents the same rights that would be afforded to other members of the community. While this measure specifically is not part of the Bill it should nonetheless be opposed and the changes proposed at Item 112 deleted.

Reporting missing persons to the police (and notifying their relatives, with prior consent) should be sufficient.[76]

1.48      The committee understands that the changes to the Act will make such reporting possible, and that it is proposed to make changes to the Principles that will require such notification of DOHA to take place within 24 hours, adopting the same time frame as used for the reporting of assaults.[77] The committee believes that it might be desirable in certain circumstances for DOHA to be aware of absences reported to police, to assist it in monitoring the operation of aged care homes. It does however accept the concerns of both industry and consumers, that the rights and freedoms of aged care residents should not be curtailed, and that these reporting arrangements should not progress further into unwarranted restrictions on freedom of movement.

Sanctions and deterrence

1.49      The bill contains a number of new provisions relating to sanctions and deterrence. Currently section 65-2 of the Act sets out conditions for the Secretary to consider the appropriateness of imposing sanctions for non-compliance. It currently states:

In deciding whether it is appropriate to impose sanctions on an approved provider for non‑compliance with one or more of its responsibilities under Part 4.1, 4.2 or 4.3, the Secretary must consider the following:

  1. whether the non‑compliance is of a minor or serious nature;

  2. whether the non‑compliance has occurred before and, if so, how often;

  3. whether the non‑compliance threatens the health, welfare or interests of care recipients;

  4. whether the approved provider has failed to comply with any undertaking to remedy the non‑compliance;

  5. any other matters specified in the Sanctions Principles.

1.50      The bill proposes three changes to this section. It proposed to add two new matters for the Secretary to consider when determining whether sanctions should be imposed:

1.51      The bill also proposes to indicate that, when weighing up the factors listed in section 65-2, 'whether the non-compliance threatens or would threaten the health, welfare or interests of current and future care recipients is to be the Secretary’s paramount consideration'.[80] The Explanatory Memorandum states that the purpose of this change is to make it clear that '[t]he interests of any other party, insofar as they are taken to be a relevant consideration, must be given less weight than the health, welfare or interests of current and future care recipients'.[81]

1.52      CHA argued that the focus should be on assisting industry compliance through 'enabling and incentivising' measures, rather than on clarifying the criteria for imposing sanctions. It suggested the new provisions 'could have the effect of resulting in punitive action being taken against operators who may otherwise be unaware of their new obligations'.[82]

1.53      Concerns were also raised by industry stakeholders about the proposal to give paramount consideration to particular factors. ACSA believed that this point indicates 'that the Department need not take the business interests of the provider, the continuing employment of current staff, or other factors, into account when considering sanctions'.[83] It believed that there should be amendment or clarification that would ensure that the Secretary 'must continue to take a balanced view of all factors into account'.[84] TACA made similar observations.[85]

1.54      The committee is aware of some litigation history associated with this section.[86] The Department also acknowledged that concerns had been raised during the consultation process. DOHA stated:

If passed, the legislation would require the Secretary to the Department of Health and Ageing to consider the desirability of deterring future non-compliance when imposing sanctions on an aged care service... For example, the Department may decide it is appropriate to impose sanctions on an approved provider who fails to refund accommodation bonds, where the refund amounts have already been paid to former care recipients through the Government's Accommodation Bond Guarantee Scheme...The amendments to the Act put beyond doubt the appropriateness of imposing a sanction in such cases in order to deter future non-compliance either by the sanctioned provider or others.[87]

1.55      Responding to submissions to the current inquiry, DOHA made further comment on this issue. DOHA highlighted that the objects of the Act are concerned primarily with 'the protection of the interests of care recipients', and the changes to section 65 of the Act are designed to make sure that it is put beyond doubt that this should be the guiding concern in assessing the appropriateness of sanctions.[88]

1.56      The committee recognises that the use of sanctions or punitive measures to ensure compliance should be a last resort. It did not receive any evidence that sanctions or similar measures were over-used. It also notes that there are other procedures that would be followed before the stage of applying sanctions is reached. In most cases, an approved provider would receive a notice of non-compliance, and be given an opportunity to both address compliance issues, and to make a submission to the Secretary in response to the concerns identified in such a notice.[89] If that did not achieve the desired result, a notice of intention to impose sanctions would be issued and, again, the provider would have an opportunity to respond.[90] If there was still no satisfactory action taken by the provider, only then would sanctions be implemented. Furthermore, providers have avenues of review and appeal against this step in the process.[91]

1.57      In addition, the committee understands that the Aged Care Standards and Accreditation Agency provides support to the sector in 'identifying best practice, and providing information, education and training'.[92]

1.58      The proposed changes to section 65-2 do not alter the reasons that sanctions may be imposed, they merely modify the way the appropriateness of sanctions is considered. This fact, together with the existing staged process by which sanctions are threatened, described above, means that there should be no risk (as suggested by CHA) that approved providers could possibly be unaware of their obligations.

1.59      The committee endorses the view that the health, welfare and interests of current and future care recipients should be the over-riding concern in determining whether sanctions are to be applied against an approved provider. It believes the additional factors are relevant and appropriate, and the checks and balances in the legislation are already extensive.

1.60      CHA raised a specific concern in relation to the possible effects of an approved provider having all of their places revoked as a sanction under the Act. The Act contains mechanisms by which an approved provider can seek a review of a decision to implement sanctions against them, including if the sanction is the revocation of their approved provider places.

1.61      The Act also, in section 10-2(1), states in part that 'If an approved provider does not provide any aged care during a continuous period of 6 months, the approval lapses on the day after the end of that period'.

1.62      In 2005, the Administrative Appeals Tribunal upheld a complaint by an aged care provider against the revocation by the Secretary of their approved places. The Secretary of DOHA successfully appealed that decision to the Federal Court. The Federal Court accepted the Secretary's argument that the provider's:

only purpose in bringing the review was to have its approval as a provider and allocations of places restored to it. This result could not be achieved because s 10-2(1) of the Act caused the approval to lapse[93]

and therefore their appeal against the Secretary's decision could not succeed. Because the Secretary's appeal under s.10-2 was successful, the Federal Court did not examine any other aspect of the AAT's original decision.

1.63      CHA noted that the bill seeks to amend 10-2 in such a way that

as soon as an approved provider with one approved service has all their approved places revoked, their approval as a provider would lapse.[94]

This raised the possibility that providers would effectively lose some of their rights of appeal to the AAT because, even if they had a substantive case, there was no remedy available, as their approved provider status would have lapsed.

1.64      DOHA indicated that there were legal mechanisms to ensure the appeal rights would be preserved. It was pointed out that the provider could go to the AAT and seek a stay of the sanction decision.[95] If the AAT agreed to this stay, then the provider would be able to seek a review of the decision and, if successful, could have their places returned to them. Neither the original, nor the proposed new construction of, section 10-2 will prevent providers getting meaningful review through the AAT, provided they first seek a stay of the original decision – something the committee understands the provider involved in the 2005 case did not do.[96]

Police checks

1.65      Submitters raised concerns about possible modifications to the existing arrangements for police checks of staff working in aged care facilities.[97] Industry representatives were concerned about both increased costs, as they must pay for police checks, as well as possible impediments it might create to bringing in contractors (such as tradespeople) at short notice.[98]

1.66      The committee notes that the details of these changes will be the subject of regulations that neither the committee nor stakeholders have yet seen. However, in a supplementary submission, DOHA clarified that 'trades people who perform work otherwise than under the control of the approved provider (as independent contractors) will not be required to obtain a police check'.[99]

Other issues

1.67      The AMA had one particular suggestion, which was that GPs be included in the ACAT assessment process. The committee acknowledges that this may be desirable, but does not think this is a matter for the Commonwealth's legislation.

1.68      ACAA were disappointed that there had not been revision of the provisions associated with subsidy payments following Aged Care Assessment Team re-assessments of resident care needs.[100] DOHA acknowledged there were still issues in relation to ACAT administration. It indicated that the Department is continuing to work on this area, and in particular that it 'will also review the implementation of the Aged Care Funding Instrument after 18 months'.[101]



1.69      The committee notes DOHA's explanation of a number of reasons why it is desirable for the bill to be passed as soon as possible:

First, in response to the joint Commonwealth-State National Review of Aged Care Assessment Teams, the Minister for Ageing undertook to make amendments to the Aged Care Act 1997 to remove unnecessary assessments by Aged Care Assessment Teams (ACATs).  In return the Minister intends to seek improved timeliness of assessments by ACATs.  The Australian Government needs to commence negotiations with State and Territory Governments on the performance indicators for improved timeliness early next year ahead of the next funding agreement with the jurisdictions which is due to be agreed by all Governments by the end of June 2009.  States and Territories will not be prepared to agree to improved performance in the absence of the legislative changes being passed by the Parliament.

Secondly, the Department has commenced the 2008-09 Aged Care Approvals Round and will, early in the new year, be assessing the applications received.  The legislation as currently written does not allow the Department to take into consideration the conduct of related entities when making decisions on the allocation of aged care places.  Given that there are a number of large organisations that have established multiple approved provider entities under their management banner, but essentially operate as the one entity with the parent organisation pulling the strings, the Department should be able to consider any issues, particularly serious compliance problems, that have occurred within the whole group when assessing applications.  Legislative amendments in the Bill are required to allow this.

Thirdly, it came to light through experience in the first operation of the bond guarantee scheme that the scheme does not cover bonds held by former approved providers.  As providers may hand back their approval at any time, or it there is a very serious issue the Department should revoke approved provider status, there is potentially a situation where accommodation bonds are no longer covered by the scheme and this could arise at any time.  This needs to be remedied as soon as possible.[102]

1.70      The committee believes that, as the aged care services sector grows and evolves, this legislation is a valuable step to ensure that legislation and regulation designed to protect residents will keep pace with that evolution.

1.71      The committee does however wish to emphasise the concerns of both industry and consumers, that the rights and freedoms of aged care residents should not be curtailed, and that the reporting arrangements envisaged under the legislation, regarding missing persons, should not progress further into unwarranted restrictions on freedom of movement.

Recommendation 1

1.72      The committee recommends that the bill be passed.



Senator Claire Moore

November 2008

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