Bills Digest no. 66 2015–16
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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.
Alex Grove
Social Policy Section
19 January 2016
Contents
Purpose of
the Bill
Background
Committee
consideration
Policy
position of non-government parties/independents
Position of
major interest groups
Financial
implications
Statement of
Compatibility with Human Rights
Key issues
and provisions
Concluding
comments
Date introduced: 25
November 2015
House: House of
Representatives
Portfolio: Health
Commencement: The
day after Royal Assent.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can
be found on the Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the ComLaw
website.
The purpose of the Aged Care Amendment (Red Tape Reduction
in Places Management) Bill 2015 (the Bill)[1]
is to amend the Aged
Care Act 1997 (the Act)[2]
to:
- change
the process for transferring places between aged care providers from an
approvals process to one where the transfer will be deemed as approved unless
it is vetoed and
- increase
the timeframe for providers to make provisionally allocated places operational
from two to four years, while also limiting the number of extensions to this
period.
The Australian Government subsidises aged care services
for older people who cannot live independently in their own homes.[3]
The Act and associated Principles provide the regulatory, funding and quality
framework for residential aged care, home care and flexible care services.[4]
As at 30 June 2015, under the Act there were:
- 72,702
operational home care packages providing tailored personal care, support and
clinical services to older individuals in their homes[5]
- 192,370
operational residential care places providing permanent and respite care for
older people in aged care homes[6]
and
- 7,629
operational flexible care places.[7]
The majority of Australian Government expenditure under
the Act in 2014–15 was for residential care ($10.6 billion), with $1.28
billion spent on home care packages and $407.5 million on flexible care
programmes.[8]
Responsibility for the operation of the Act was
transferred to the Department of Health (DoH) from the Department of Social
Services (DSS) in September 2015 as a result of Machinery of Government
changes.[9]
Planning and allocation of aged care
places
The Australian Government controls the supply of subsidised
aged care places. The Government planning framework aims to grow the number of
aged care places in line with the ageing population, and to balance provision
of places across metropolitan, regional, rural and remote areas, including for
people with special needs.[10]
The Government is aiming for an aged care provision ratio of 125 aged care
places per 1,000 people aged 70 years or over by 2021–22.[11]
As at 30 June 2015 there were 111.5 operational aged care places (composed of
81.1 residential and 30.4 home care) per 1,000 people aged 70 years or over.[12]
Aged care places are allocated to providers of aged care who
are approved under the Act, rather than directly to consumers (although the
Government has announced its intention to allocate home care packages directly
to consumers from February 2017).[13]
Existing places held by providers generally continue from year to year. For new
places, the Minister determines the number of additional residential, home care
and flexible care places to be made available in each Aged Care Planning Region
each year, in accordance with the planning framework. Prospective and existing
approved providers then compete for the majority of these places (with the
exception of some flexible care places) through the open Aged Care Approvals
Round (ACAR). The 2014 ACAR was very competitive for home care (with
approximately 17 new places sought by providers for every place available), and
moderately competitive for residential care (approximately two new places
sought for every place available).[14]
Aged care places can be provisionally allocated, for example
if they require the building of a new aged care facility or the extension of an
existing facility, but the provider will not receive a subsidy for the place
until it has become operational and there is a care recipient in place.[15]
Red tape reduction
Prior to the 2013 federal election, the Coalition announced
its aged care policy, which included a commitment to cut red tape and
streamline the administrative burden for service providers:
The complex regulations that plague the sector are not only
costly and onerous but inhibit providers from delivering even higher levels of
quality care. It has been reported that nursing staff spend at least a third of
their time simply doing paperwork. Reducing compliance burdens will also drive
greater efficiencies which will allow better flexibility to enhance quality of
care provided.[16]
As part of this commitment, the Coalition pledged to
‘reduce the complexity for providers seeking aged care places’, noting that at
that time a ‘provider who transfers approved places to another approved
provider’ had to fill out a 39 page form.[17]
Following its election win, the Coalition Government
established the Aged Care Sector Committee (ACSC) to provide advice to
Government on aged care policy and reform. The Committee includes ‘representatives
from across the aged care sector, including peak bodies, large for-profit and
not-for-profit providers, consumers, workforce, the National Aged Care Alliance
and the Department.’[18]
The ACSC worked with the Government to develop a Red Tape Reduction action
plan, which was approved by former Prime Minister Tony Abbott in 2014.[19]
The Red Tape Reduction action plan ‘sets out a range of
actions that can be taken to reduce unnecessary red tape for aged care
providers and consumers’.[20]
Item 11 of the plan proposes a review of places management, including:
- reviewing and revising all places management forms so
that they only seek information that is legislatively required;
- reviewing and revising the requirements in relation
to the transfer of places to ensure that the requirements are fit for purpose;
and
- reviewing and revising the requirements in relation
to managing provisionally allocated places to ensure that the requirements are
fit for purpose.[21]
The intent of these proposed changes to places management
is to ‘lessen the red tape burden on providers and ensure that the Department
is able to more efficiently and effectively manage aged care places.’[22]
The first change, the streamlining of places management forms, has already been
made with new forms released in 2015.[23]
This Bill implements the next two changes by revising the legislative
requirements for transferring places and managing provisionally allocated
places.
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills had
no comment on the Bill.[24]
Shayne Neumann, the Shadow Minister for
Ageing, has indicated that the Australian Labor Party will support the Bill
because Labor is in favour of red tape reduction, and because approved
providers of residential care should not be able to retain provisionally
allocated places for an indefinite period.[25]
No statements by other non-government parties and
independents specifically relating to the Bill have been identified.
No statements by major interest groups specifically
relating to the Bill have been identified. However, given that the Bill
implements elements of the Red Tape Reduction action plan developed by the
Government and the ACSC (including representation from peak bodies, aged care
providers and consumer groups), the changes are likely to be supported by the
aged care sector.
The Minister has also stated that the proposed changes to
the transfer of places between providers were provided to the ACSC and selected
providers for feedback, and that ‘the response to this measure from the
aged-care sector was positive’.[26]
The Explanatory Memorandum states that the Bill has no
financial implications.[27]
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible ‘as it does not raise any
human rights issues’.[28]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights concluded
that the Bill does not raise human rights concerns.[29]
Transferring places between aged
care providers
Aged care providers may make a business decision that they
are no longer in a position to deliver care for some or all of their allocated
places, and therefore seek to transfer these places to another aged care
provider.[30]
Currently, a proposed transfer of places must be approved by the Secretary in
order to take effect.[31]
Applications for transfers are routinely approved in around 80 per cent of
cases.[32]
The Bill replaces this application process with a veto process, under which
transfers will be deemed to be approved unless vetoed by the Secretary.
Item 1 in Schedule 1 repeals Division 16 of
the Act, which sets out the application and approval process for transferring
places between providers, and replaces it with new Division 16 which outlines
the veto process for transfers. The new Division has two subdivisions: proposed
Subdivision 16-A deals with the transfer of places that are not provisionally
allocated, and proposed Subdivision 16-B deals with the transfer of places that
are provisionally allocated.
Proposed sections 16-2 and 16-13 provide that
an approved provider wishing to transfer a place may give a transfer
notice to the Secretary advising of this intent, and set out the
information to be included in the transfer notice. The
information required is similar to that currently required in the application
for approval to transfer places.[33]
Proposed sections 16-3 and 16-14 set out the requirements
that the Secretary must be satisfied of when considering the transfer
notice. This includes:
- whether
the proposed transfer would meet the objectives of the planning process
- whether
the proposed transfer would meet the needs of people with special needs (where
the places have been allocated on this basis)
- the
suitability, financial viability and adequacy of care of the provider receiving
the places (the transferee)
- the
history of satisfactory conduct of the transferee and their staff and
- that
the location of the place will not change as a result of the transfer (for
provisionally allocated places).
Whilst these considerations are very similar to those
currently prescribed in the Act, the Secretary would no longer need to be
satisfied that the transfer was justified in the circumstances (for
non-provisionally allocated places), nor that there were exceptional
circumstances justifying the transfer and that the needs of the aged care
community in the region would best be met by the transfer (for provisionally
allocated places).[34]
Thus, the Secretary would still be concerned with the distribution of the
places under the planning process and the quality of the transferee, but not
with the justification for the transfer. This appears consistent with the
Government’s stated intention to limit its involvement in a ‘business decision
between two already approved providers of residential care’ while still
ensuring ‘that a high-standard and quality aged-care service can be delivered’.[35]
The Secretary may currently make a request for further
information in order to decide whether to approve a transfer.[36]
This is replaced in the Bill by proposed sections 16-4 and 16-15
which provide for the Secretary to issue a notice to resolve any issues
relating to the transfer which are of concern to the Secretary. The notice to
resolve must specify the issue of concern and the action to be taken by the
specified person to resolve the issue. Both parties to the transfer may make
submissions to the Secretary addressing the concerns.
The Secretary must currently either approve or reject a
transfer application.[37]
Under proposed sections 16-6 and 16-17, the Secretary may give a
veto notice rejecting the proposed transfer if they are not satisfied that the
transfer meets the requirements set out in proposed sections 16-3 and 16-14,
if issues raised in a notice to resolve remain of concern, or if the
transfer would result in the places being transferred to a different State or
Territory. Other circumstances in which the Secretary may veto a transfer may
be set out in the Allocation Principles.[38]
If no veto notice is issued, under proposed sections 16-8 and 16-19
the transfer takes effect, generally on the day specified in the transfer
notice (so long as the transferee is an approved provider on that day).
The replacement of an approval process with a veto process
does not appear to greatly alter the transfer requirements for providers, nor does
it materially lessen the powers of the Secretary. The removal of the
requirement for providers to justify the case for the transfer is perhaps the
most significant change.
Timeframes for provisionally
allocated places
Aged care places, especially for residential care, may be
provisionally allocated to providers, for example if they require the building
or extension of an aged care facility. The Act currently provides for such
places to become operational within two years after allocation.[39]
In practice, the time taken can be longer as the provider may be reliant on
‘acquisition of land, finance, planning and construction approvals, and the
availability of builders’.[40]
The median time for providers to make such places operational is around four
years, with 80 per cent operational within six years.[41]
As at 30 June 2014, there were reportedly more than 7,000 provisionally
allocated places that have still not become operational six or more years after
allocation.[42]
The Act does not currently specify an upper limit on the number or duration of
extensions that can be granted to the provisional allocation period.[43]
Item 1 in Schedule 2 changes the provisional
allocation period from two to four years.
Item 3 in Schedule 2 provides that the
Secretary must approve two applications for an extension of the provisional
allocation period if justified, but that the Secretary only has to
approve a third or subsequent application for extension in exceptional
circumstances.
Item 4 in Schedule 2 allows the Minister to
specify by way of the Allocation Principles[44]
matters which the Secretary must consider when determining what constitutes
exceptional circumstances.
Item 8 in Schedule 2 has the effect of
fixing the period of each extension at 12 months.
The increase in the provisional allocation period from two
to four years would appear to align the Act with the average time taken to
build or extend an aged care home and start providing care. The changes to the
extension rules are intended to ensure that after six years ‘an extension to
the provisionally allocated residential aged-care place will only be made in
exceptional circumstances’ so that providers are not holding on to places
indefinitely without providing care.[45]
However, it appears that the Secretary still retains a more general power to
make extensions in other circumstances.[46]
This Bill makes changes to the way in which aged care
providers manage their allocated places. The changes appear to reduce red tape
and increase certainty for providers, without significantly lessening the
powers of the Secretary. Any effect on the supply of new residential aged care
places is not as simple to predict, as the Bill doubles the default time to
make a provisional place operational, but tightens restrictions on extensions.
The Bill has been developed in consultation with the aged care sector and is
supported by the Opposition. The proposed changes are relatively minor in
nature and unlikely to be controversial.
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Parliament
of Australia, ‘Aged
Care Amendment (Red Tape Reduction in Places Management) Bill 2015 homepage’,
Australian Parliament website, accessed 9 December 2015.
[2]. Aged Care Act 1997,
accessed 9 December 2015.
[3]. Department of Social Services (DSS), ‘Using the Guide to Aged
Care Law’, Guide to Aged Care Law, version 1.09, released 4 January
2016, DSS website, last updated 9 February 2015, accessed 9 December 2015.
[4]. Department
of Health (DoH), 2014–15
Report on the operation of the Aged Care Act 1997, DoH, Canberra, 2015,
p. 2, accessed 9 December 2015. The Principles are made under section
96-1 of the Act.
[5]. Ibid.,
pp. 36–37.
[6]. Ibid.,
p. 49.
[7]. Ibid.,
p. 70. Flexible care includes transitional care (to assist people to return
home after a hospital stay), aged care provided by a Multi-Purpose Service (a
service in a rural or remote area that also provides health and community
services), and innovative care (a small number of grandfathered places left
over from a previous home care pilot).
[8]. Ibid.,
p. xiii.
[9]. Ibid.,
p. xii.
[10]. DSS, ‘3.3.2 How does the
Commonwealth plan its allocation of places?’, Guide to Aged Care Law,
version 1.09, released 4 January 2016, DSS website, last updated 19 September
2014, accessed 9 December 2015.
[11]. DSS, Expansion of flexible care initiatives, 2015
Budget fact sheet, DSS, 2015, accessed 9 December 2015.
[12]. DoH,
2014–15
Report on the operation of the Aged Care Act 1997, op. cit., p. 13.
[13]. Ibid.,
p. 42.
[14]. Ibid.,
pp. 14–16; DSS, ‘2015
Aged Care Approvals Round’, DSS website, last updated 2 October 2015, accessed
9 December 2015.
[15]. DoH,
2014–15
Report on the operation of the Aged Care Act 1997, op. cit., p. 14.
[16]. Liberal
Party of Australia and the Nationals, The
Coalition's policy for healthy life, better ageing, Coalition policy
document, Election 2013, p. 5, accessed 10 December 2015.
[17]. Ibid.
[18]. DSS,
‘Aged
Care Sector Committee’, DSS website, accessed 10 December 2015.
[19]. S
Ley (Minister for Health, Minister for Sport and Minister for Aged Care), ‘Second
reading speech: Aged Care Amendment (Red Tape Reduction in Places Management)
Bill 2015’, House of Representatives, Debates, 25 November 2015, p. 13641,
accessed 10 December 2015.
[20]. Aged
Care Sector Committee (ACSC), Red
Tape Reduction Action Plan, DSS, 2015, p. 1, last updated 3 August
2015, accessed 10 December 2015.
[21]. Ibid.,
p. 5.
[22]. Ibid.
[23]. S
Ley, ‘Second
reading speech: Aged Care Amendment (Red Tape Reduction in Places Management)
Bill 2015’, op. cit.
[24]. Senate
Standing Committee for the Scrutiny of Bills, Alert
digest, 14, 2015, The Senate, 2 December 2015, p. 1, accessed 15
December 2015.
[25]. S
Neumann, ‘Second
reading speech: Aged Care Amendment (Red Tape Reduction in Places Management)
Bill 2015’, House of Representatives, Debates, 2 December 2015, pp. 14541–43.
[26]. S
Ley, ‘Second
reading speech: Aged Care Amendment (Red Tape Reduction in Places Management)
Bill 2015’, op. cit., p. 13642.
[27]. Explanatory
Memorandum, Aged Care Amendment (Red Tape Reduction in Places Management)
Bill 2015, p. 1, accessed 30 November 2015.
[28]. The
Statement of Compatibility with Human Rights can be found at page 2 of the
Explanatory Memorandum to the Bill.
[29]. Parliamentary
Joint Committee on Human Rights, Thirty-second
report of the 44th Parliament, 1 December 2015, p. 1,
accessed 15 December 2015.
[30]. S
Ley, ‘Second
reading speech: Aged Care Amendment (Red Tape Reduction in Places Management)
Bill 2015’, op. cit., p. 13641.
[31]. Aged
Care Act 1997, section 16-1.
[32]. S
Ley, ‘Second
reading speech: Aged Care Amendment (Red Tape Reduction in Places Management)
Bill 2015’, op. cit.
[33]. Aged
Care Act 1997, sections 16-2 and 16-14.
[34]. Aged
Care Act 1997, sections 16-1, 16-4, 16-13 and 16-16.
[35]. S
Ley, ‘Second
reading speech: Aged Care Amendment (Red Tape Reduction in Places Management)
Bill 2015’, op. cit., p. 13642.
[36]. Aged
Care Act 1997, sections 16-3 and 16-15.
[37]. Aged
Care Act 1997, sections 16-5 and 16-17.
[38]. Allocation Principles 2014,
accessed 18 January 2016.
[39]. Aged
Care Act 1997, section 15-7.
[40]. DoH,
2014–15
Report on the operation of the Aged Care Act 1997, op. cit., p. 14.
[41]. S
Ley, ‘Second
reading speech: Aged Care Amendment (Red Tape Reduction in Places Management)
Bill 2015’, op. cit., p. 13642.
[42]. R
Ramsey, ‘Second
reading speech: Aged Care Amendment (Red Tape Reduction in Places Management)
Bill 2015’, House of Representatives, Debates, 2 December 2015, p. 14548.
[43]. Aged
Care Act 1997, section 15-7.
[44]. Allocation Principles 2014,
accessed 11 January 2016.
[45]. S
Ley, ‘Second
reading speech: Aged Care Amendment (Red Tape Reduction in Places Management)
Bill 2015’, op. cit., p. 13643.
[46]. Aged
Care Act 1997, paragraph 15-7(2)(a).
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