Introductory Info

Date introduced: 2 December 2020
House: House of Representatives
Portfolio: Health
Commencement: Sections 1 to 3 on Royal Assent. Schedules 1 and 2 on the later of 1 April 2021 or the eighth day after Royal Assent. Schedule 3 immediately after the later of: the commencement of Schedules 1 and 2; or the commencement of the Federal Circuit and Family Court of Australia Act 2020. If the Federal Circuit and Family Court of Australia Bill 2019 is not enacted and does not commence, then Schedule 3 does not commence.

Purpose of the Bill

The purpose of the Aged Care Legislation Amendment (Serious Incident Response Scheme and Other Measures) Bill 2020 (the Bill) is to amend the Aged Care Act 1997 (the Act) and the Aged Care Quality and Safety Commission Act 2018 (the Commission Act) to establish a Serious Incident Response Scheme (SIRS) to deal with incidents of abuse and neglect in residential aged care.

The Bill also expands the Aged Care Quality and Safety Commission’s (the Commission) powers to enforce the responsibilities of aged care providers.

Background

The aged care system supports older people who can no longer live without assistance in their own homes. Care is provided in people’s homes, in the community and in aged care homes by a range of not-for-profit, for-profit and government providers. The Australian Government is the primary funder and regulator of the aged care system.[1]

Residential care is provided in aged care homes (also known as residential aged care facilities or nursing homes) on a permanent or respite (short-term) basis. Services include personal care, accommodation, laundry and meals, nursing and some allied health services.[2]

Flexible aged care caters for older people who need different care arrangements than those offered by mainstream home and residential services.[3] Some types of flexible care may be offered in a residential setting.

Reportable assaults

Approved residential care providers are required to report incidents, suspicions or allegations of assaults on residents to local police and the Commission within 24 hours.[4] Police are responsible for substantiating the allegation, and providers are responsible for ensuring they have systems in place to maintain a safe environment for residents.[5] A reportable assault is:

• unreasonable use of force on a resident, ranging from deliberate and violent physical attacks on residents to the use of unwarranted physical force
• unlawful sexual contact, meaning any sexual contact with residents where there has been no consent.[6]

In 2019–20 there were 5,718 notifications of assaults under the Act:

Of those 4,867 were recorded as alleged or suspected unreasonable use of force, 816 as alleged or suspected unlawful sexual contact, and 35 as both. With 244,363 people receiving permanent residential care in 2019–20, the incidence of reports of suspected or alleged assaults was 2.3 per cent.[7]

Resident on resident exemption

Suspected assaults do not need to be reported when the assault is perpetrated by a resident with a cognitive or mental impairment, and arrangements are put in place within 24 hours to manage the resident’s behaviour.[8]

It appears that many suspected assaults in residential aged care are not currently reported due to this ‘resident on resident’ exemption. A 2019 KPMG study commissioned by the Department of Health (DoH) estimated that nationally in a year there were around:

• 39,000 resident on resident incidents that met the definition of a reportable assault but were exempt from being reported and
• 14,000 other resident on resident incidents that didn’t meet the definition of a reportable assault.[9]

Recommendations for a Serious Incident Response Scheme (SIRS)

Australian Law Reform Commission (ALRC)

In 2016, then Attorney-General Senator George Brandis asked the Australian Law Reform Commission (ALRC) to inquire into existing Commonwealth laws to prevent elder abuse.[10] The ALRC handed down its final report, Elder Abuse – a national legal response in May 2017.

The ALRC noted that the current reportable assault provisions in the Act ‘place no responsibility on the provider other than to report an allegation or suspicion of an assault’ and that ‘no obligation is placed on the provider to record any actions taken in response to an incident’.[11]

The ALRC recommended a new approach to serious incidents of abuse and neglect in aged care, with the emphasis changing from reporting assaults to requiring providers to investigate and respond to incidents. The ALRC recommended that this investigation and response should be monitored by an ‘independent oversight body’ with powers to conduct investigations of incidents.[12]

The ALRC proposed a SIRS which would continue to cover physical and sexual abuse but also expand to cover a wider range of incidents, including:

• financial abuse
• serious incidents committed by staff in home care and
• in residential care: inhumane or cruel treatment, unexplained serious injury and neglect, and serious resident on resident violence.[13]

Review of National Aged Care Quality Regulatory Processes (Carnell Paterson review)

Serious failures of care identified at the Oakden Older Persons Mental Health Service in Adelaide led the Australian Government to commission the independent Review of National Aged Care Quality Regulatory Processes (Carnell Paterson Review).[14] The review concluded that the current reportable assaults scheme does not provide adequate safeguards to protect aged care residents from abuse and neglect:

The Aged Care Act is a weak framework for promoting the rights of older people, including the right to be free from abuse and exploitation, since it only provides for the reporting of serious physical and sexual assaults. The requirement of reporting to police can lead to a belief that nothing more needs to be done, since the matter is in the hands of the police. There is a sense from individual submissions that the process following on from the obligatory report is flawed. People are left in the dark.[15]

Carnell and Paterson endorsed the ALRC’s recommendation for a new SIRS for aged care, overseen by an independent body. They recommended that this body should be the Aged Care Quality and Safety Commission.[16]

House of Representatives Standing Committee on Health, Aged Care and Sport

In October 2018, the House of Representatives Standing Committee on Health, Aged Care and Sport noted that the Government was considering the ALRC’s recommendation for a SIRS in aged care.[17] The Committee recommended that the current resident on resident exemption from the requirement to report assaults be removed.[18]

Royal Commission into Aged Care Quality and Safety

The Royal Commission into Aged Care Quality and Safety (the Royal Commission) is due to hand down its final report by 26 February 2021.[19] In October 2020, Counsel Assisting the Royal Commission proposed an extensive set of recommendations for aged care reform. This included a proposed recommendation that the Government, in developing a new and expanded SIRS should:

• ensure all serious incidents are included
• support the matching of names of individuals accused of being involved in a serious incident with previous serious incident reports
• require the quality regulator to publish quarterly data on serious incident reports and
• confer powers on the quality regulator to require action and obtain evidence from providers.[20]

Development of the SIRS

Then Aged Care Minister Ken Wyatt announced on 18 April 2018 that the Government would develop ‘options, in consultation with the aged care sector, for a Serious Incident Response Scheme to ensure the right systems are in place to identify an incident and prevent it from occurring again’.[21]

The 2018–19 Budget provided ‘$32.6 million over four years from 2018-19 to enhance the regulation of aged care provider quality to better identify risks and respond more quickly to care failure’.[22] This included an unspecified amount for the design of an SIRS to protect aged care recipients from abuse and mistreatment.[23] Subsequent Budgets have included further funding for the SIRS, as detailed in the ‘Financial implications’ section of this digest.

Consultation and model development

In late 2018 DoH engaged KPMG to develop models and options for a SIRS for aged care. KPMG undertook a rapid literature review, analysis of current arrangements and stakeholder consultations.[24] KPMG’s February 2019 report outlined five policy options, of which the latter three were a form of SIRS:

Option 1: involves no change to the current arrangements.

Option 2: involves developing guidance material to better enforce the current arrangements.

Option 3: involves introducing a reportable conduct scheme which would require all aged care service providers to report abuse or neglect by a staff member against a consumer to the Aged Care Quality and Safety Commission (the Commission).

Option 4: involves expanding Option 3 to include unexplained serious injury in residential aged care as a serious incident.

Option 5: involves expanding Option 3 to include aggression and abuse between consumers in residential aged care settings as a serious incident.[25]

KPMG noted wide stakeholder support for Option 3 (a SIRS that captures reportable conduct by staff members). KPMG stated that including unexplained serious injury (Option 4) and including resident on resident incidents (Option 5) were complex issues warranting further consideration.[26] KPMG noted that any substantial change to current arrangements (Options 3 to 5) would require more resourcing for the Commission, and would ‘increase the regulatory burden on providers to report and respond to serious incidents’.[27]

Following on from the KPMG report, the Government undertook further consultation on the finer details of the proposed model for the SIRS. The selected model was based on options 3 to 5 of the KPMG report, requiring reporting of:

• abuse or neglect by a staff member of a Commonwealth funded residential aged care home against a consumer; and
• incidents of abuse and aggression between consumers receiving Commonwealth funded residential aged care.[28]

The consultation process received 45 responses including from consumer groups, aged care providers and peak bodies, workforce groups and state or territory governments.[29]

Key themes in stakeholder submissions included:

• support for a strong framework for reporting and responding to serious incidents
• agreement that serious incidents should be included regardless of who the perpetrator is
• support for removing the resident on resident exemption for consumers with cognitive impairment
• the need for clear definitions of serious incidents, including a clear threshold for reporting and examples and guidance to support reporting
• the importance of clearly stating the objective of the SIRS, including a shift in focus from reporting to response and
• the potential for public reporting of serious incidents to drive accountability in residential care.[30]

Key concerns expressed by stakeholders included:

• a lack of clarity regarding words used in definitions
• the degree of interpretation required to determine whether an incident is ‘serious’ and
• how the SIRS will interact with other regulatory frameworks and processes (such as reporting to the Coroner).[31]

Stakeholders also expressed concern about abuse of staff by consumers and family members, and questioned whether such abuse would be captured by the SIRS.[32]

Final model

In June 2020, Aged Care Minister Senator Richard Colbeck announced that a SIRS would be introduced in residential aged care. He also announced that a prevalence and feasibility study for a SIRS for in home care would be undertaken.[33]

The Government subsequently released the details of the final SIRS model for implementation (subject to legislative processes). The SIRS will cover both residential care and flexible care delivered in a residential setting. The SIRS will require providers to:

• identify, record, manage and resolve all incidents affecting residents
• report all alleged, suspected or actual serious incidents to the Commission
• notify police and family members as required
• support and engage consumers affected by an incident
• conduct or contribute to an investigation
• implement corrective actions and use incident data to prevent similar incidents from reoccurring.[34]

The Commission, as regulator of the SIRS, will:

• assess providers’ compliance with incident management obligations
• receive incident reports, monitor how providers investigate and respond to serious incidents, and require further responses when needed
• respond to incidents using the full range of regulatory treatments
• undertake risk profiling and identification of trends and
• provide feedback to the sector, publish performance reporting and identify improvements to the SIRS.[35]

Further details of the SIRS model, as implemented by the Bill, are provided in the ‘Key issues and provisions’ section of this Digest.

The Government intends for the SIRS to commence on 1 April 2021.[36]

Committee consideration

Senate Standing Committee for Selection of Bills

At the time of writing, the Senate Standing Committee for Selection of Bills had deferred consideration of the Bill to its next meeting.[37]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee) considered the Bill in Scrutiny Digest 18 of 2020.[38] The Committee noted that:

• item 2 of Schedule 1 provides for significant matters relating to the management of reportable incidents to be included in the Quality of Care Principles 2014 (the Quality of Care Principles) and
• item 3 of Schedule 1 provides for rules relating to how the Commissioner deals with reportable incidents to be included in the Aged Care Quality and Safety Commission Rules 2018 (the Rules).

The Scrutiny of Bills Committee asked for the Minister’s advice as to why it is considered reasonable and necessary to leave these important matters to delegated legislation. The Committee also asked whether the Bill could be amended to provide at least high-level guidance on how the Commissioner deals with reportable incidents.[39]

Schedule 2 of the Bill inserts a range of provisions into the Commission Act which are enforceable under the Regulatory Powers (Standard Provisions) Act 2014 (the Regulatory Powers Act). These relate to civil penalties, infringement notices, enforceable undertakings and injunctions. The Commissioner is the authorised person for these provisions. Schedule 2 also provides for the Commissioner to issue compliance notices and require a person to give information or documents. The Commissioner may delegate these functions or powers to any staff member of the Commission.[40]

The Scrutiny of Bills Committee asked for the Minister’s advice as to why it is considered necessary and appropriate to allow such a broad delegation of powers, and whether the Bill could be amended to give guidance as to the scope of powers that might be delegated or the categories of people to whom they might be delegated.[41]

Policy position of non-government parties/independents

To date little comment has been made by non-government parties and independents specifically on the Bill, however members of the Australian Greens and Australian Labor Party (ALP) have called for a serious incident response scheme for some time.[42]

Speaking on the issue of elder abuse in February 2018, Shadow Attorney-General Mark Dreyfus outlined that:

A future Labor Government would also look at amending the Aged Care Act to provide for a new serious incident response scheme for aged care.

As recommended by the ALRC, 'serious incident' should, at a minimum, be defined to cover the manifestations of elder abuse which I discussed earlier: physical, sexual or financial abuse.[43]

Since this speech, members of the ALP have reiterated the commitment to introduce a SIRS in line with recommendations of the ALRC report.[44]

Senator Siewert of the Australian Greens has pursued lines of inquiry concerning the SIRS through the Senate Community Affairs Committees.[45] In questioning witnesses before the inquiry into the Aged Care Quality and Safety Commission Bill 2018 and the Aged Care Quality and Safety Commission (Consequential Amendments and Transitional Provisions) Bill 2018 (2018 Bills) Senator Siewert explored whether a serious incident reporting system similar to the New Zealand system should be developed for Australia.[46] Senator Siewert reiterated support for an expanded definition of serious incident reporting, similar to one employed in New Zealand, in her second reading speech for the 2018 Bills and during the 2020–21 Budget Estimates hearings.[47] In questioning representatives from the Department of Health, Senator Siewert sought clarification from the Government as to why the SIRS does not include falls that are not the result of neglect.[48]

Both the ALP and the Greens have criticised the Government’s timeline to implement a SIRS and how long it has taken to reach implementation.[49]

At the time of writing, no other comments by non-government parties or independents specifically in relation to the Bill had been identified.

Position of major interest groups

At the time of writing, no stakeholder comment specifically relating to the Bill had been identified. However, since the release of the ALRC report in 2017 stakeholders have expressed support for an improved reportable incidents scheme.[50] Notably, the CEOs of provider peak bodies Leading Age Services Australia (LASA) and Aged & Community Services Australia (ACSA) have previously raised concerns as to whether a SIRS will improve residents’ quality of care more than refining the existing system.[51]

As detailed in the ‘Background’ section of this Digest, a consultation on the finer details of the proposed SIRS model was undertaken in August to October 2019 with a summary paper presenting the concerns of participants. The summary paper found broad support for ‘a strong framework for reporting and responding to serious incidents’ across submissions.[52]

Seven aged care advocacy bodies involved in the consultation released their submissions, these were:

• LASA, ACSA and Catholic Health Australia (CHA), representing predominately not-for-profit aged care providers[53]
• Dementia Australia (DA) and Aged Care Crisis (ACC) representing consumers[54]
• Australian Association of Gerontology (AAG) and Celebrating Ageing Older People And SexuaLity Institute’s (OPAL) joint submission concerning sexual abuse in residential aged care[55] and
• the Australian Nursing and Midwifery Federation (ANMF) representing members of the aged care workforce.[56]

The main areas of concern raised in these submissions were in regard to definitions of incidents and how staff could be expected to interpret these; how the SIRS would interact with other reporting systems; and whether acts committed by certain persons would be captured or not.

Notably, out of the three provider representatives CHA did not support the inclusion of ‘incidents perpetrated by family and/or visitors’ arguing that providers have limited powers to take action against these persons or investigate these incidents.[57] Both LASA and ACSA supported the inclusions of acts by family and/or visitors under the SIRS reporting framework.[58] AAG also supports the inclusion of family/visitor-on consumer incidents, in relation to incidents of sexual abuse.[59]

Proportionate reporting was also an area of difference between the providers. Proportionate reporting would allow the Commission to adopt a ‘risk-based’ approach to regulation.[60] This would allow providers with established risk profiles and suitable performance (a ‘proven track record’) to be exempt from reporting certain matters under the SIRS.[61] LASA ‘strongly [rejected] any inclusion of proportionate reporting in the SIRS’, whereas ACSA and CHA were in favour of a proportionate reporting framework.[62] The ANMF considered that the SIRS should be ‘well established before thought is given to the possibility of exemptions from mandatory reporting’.[63]

In submissions to the Royal Commission, the Australian Medical Association (AMA) and ANMF provided brief outlines of their support for the SIRS. The ANMF states that since participating in the SIRS consultation, the Government has adopted many of the recommendations supported by the ANMF.[64] The AMA expressed its support for a SIRS as detailed in the Royal Commission’s Counsel Assisting’s draft recommendations.[65] The AMA called for the development of guidelines for investigations of reported incidents as well as the involvement of a clinician in the screening and assessment of each case. In the AMA’s view this would ‘allow the aged care workforce to have greater confidence that this is really about serious incidents assessed by people who actually understand how challenging it can be working in aged care.’[66]

Financial implications

As noted earlier, there have been several funding announcements for the SIRS. These include:

• an unspecified portion of $32.6 million in the 2018–19 Budget for the design of a SIRS[67]
• $1.5 million in the 2019–20 Budget to undertake preparatory work for the introduction of a SIRS, which at that time was scheduled for July 2022[68]
• $23.0 million over five years from 2019-20, in the July 2020 Economic and Fiscal Update for the introduction of a SIRS[69]
• $29.8 million over three years from 2021–22, in the 2020–21 Budget to administer the SIRS[70] and
• a further $11.1 million in funding for the SIRS, announced in November 2020.[71]

Total investment in the SIRS to date is $67.2 million.[72]

Statement of Compatibility with Human Rights

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.[73]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights made no comment on the Bill.[74]

Key issues and provisions

Incident management and reporting

Under the current reportable assaults scheme, approved providers of residential care must report an allegation or suspicion of a reportable assault to police and the Aged Care Quality and Safety Commissioner (the Commissioner) within 24 hours. The approved provider is responsible for taking reasonable measures to require staff to report reportable assaults. The approved provider is also responsible for ensuring that staff members informants are not victimised, and that their identity is protected. Reportable assaults include unlawful sexual contact with or unreasonable use of force against a resident.[75] Assaults committed by a resident with a cognitive or mental impairment do not need to be reported if arrangements are put in place within 24 hours to manage the resident’s behaviour.[76]

Item 4 of Schedule 1 repeals the reportable assault provisions in the Act.[77]

The Act provides protection for staff or approved providers making disclosures of reportable assaults in good faith. The discloser is not subject to any civil or criminal liability for making the disclosure; contractual remedies cannot be enforced and contractual rights can’t be exercised against the person for making the disclosure; the discloser has qualified privilege[78] in proceedings for defamation relating to the disclosure; and a court can order that the discloser be reinstated or compensated if they are sacked for making the disclosure. A person must not victimise the discloser for making a protected disclosure.[79]

Item 10 of Schedule 1 repeals the protection for reporting reportable assaults provisions in the Act.[80]

Approved providers have responsibilities under the Act relating to the quality of care they provide.[81] Item 1 of Schedule 1 adds a responsibility for providers of residential care (or flexible care provided in a residential setting) to manage incidents and take reasonable steps to prevent incidents. This includes through implementing an incident management system that complies with the Quality of Care Principles, and through complying with any other requirements relating to incidents that are specified in the Quality of Care Principles. According to the Explanatory Memorandum, the ‘Quality of Care Principles will specify requirements relating to the management of incidents, the process and procedure requirements with a focus on preventing re-occurrence’.[82]

Item 2 of Schedule 1 inserts proposed sections 54-3 to 54-8 into the Act. These sections establish a scheme for reporting incidents under the SIRS and establish protections for people reporting incidents.

Proposed section 54-3 specifies that the Quality of Care Principles must make provision for dealing with reportable incidents. A reportable incident is defined as any of the following incidents that have occurred, or are alleged or suspected to have occurred, to an aged care resident:

• unreasonable use of force
• unlawful sexual contact or inappropriate sexual conduct
• psychological or emotional abuse
• unexpected death
• stealing or financial coercion by a staff member
• neglect
• use of physical or chemical restraint,[83] other than in circumstances set out in the Quality of Care Principles or
• unexplained absence from the residential care service.

The Quality of Care Principles may:

• define or clarify terms used in the definition of a reportable incident (other than terms relating to physical or chemical restraint, as these are already defined in the Quality of Care Principles)[84] and
• provide that a specified act, omission or event is, or is not, a reportable incident.

According to the Explanatory Memorandum, this will ‘allow for the Quality of Care Principles to provide clarity about reportable incidents and to specify certain events that do not fall within the definition of a reportable incident’. The Explanatory Memorandum gives the example of ‘a staff member raising their voice to attract attention or to speak to a residential care recipient with hearing difficulties’ as a circumstance that could be specified as not being a reportable incident.[85]

The Quality of Care Principles may:

• specify the manner and time period within which incidents must be reported to the Commissioner
• specify action that must be taken in relation to incidents, which may include:
  • requiring a provider to give a resident information regarding the use of an advocate in relation to an investigation into an incident
  • requiring a provider to arrange and pay for the cost of an independent investigation into the incident, and
  • providing a copy of an independent investigation report to the Commissioner and
• authorise the provision of information on reportable incidents to the Minister, the Commissioner or other specified bodies.

Proposed section 54-4 provides that a disclosure regarding a reportable incident qualifies for protection if the discloser is:

• an approved provider
• key personnel,[86] a staff member or volunteer of an approved provider or
• a residential care recipient or their family member, carer, representative, advocate or other significant person

and the disclosure is made to one of:

• the Commissioner
• the approved provider
• key personnel or a staff member of the approved provider, or another person authorised by the provider to receive reports of reportable incidents
• a police officer or
• another person in accordance with the Quality of Care Principles

and the discloser providers their name and acts in good faith.

Proposed section 54-5 provides that if a person makes a protected disclosure:

• they are not subject to any civil or criminal liability for making the disclosure
• contractual remedies can not be enforced, and contractual rights can not be exercised against the person on the basis of the disclosure
• they have qualified privilege in proceedings for defamation
• a contract to which they are a party can not be terminated on the basis that the disclosure is a breach of contract and
• if they are fired for making the disclosure, a court can order that they be reinstated or compensated.

Proposed section 54-6 prohibits victimisation of disclosers. A person who causes detriment to another person because that person (or a third party) has made a protected disclosure is liable for a maximum civil penalty of 500 penalty units ($111,000).[87] A person who threatens detriment to a discloser (or a third party) because a protected disclosure has or may be made is liable for a civil penalty of 500 penalty units ($111,000).

Proposed section 54-7 provides that a person who victimises a discloser (or third party) is liable to compensate that person for the damage.

Proposed section 54-8 sets out the responsibilities of approved providers in relation to disclosers. Providers are responsible for ensuring (as far as is reasonably practicable) that contractual remedies are not enforced nor contractual rights exercised; that a contract is not terminated for breach of contract; and that a person is not victimised because a staff member makes a protected disclosure.

The provider is responsible for taking reasonable measures to protect disclosers’ identities. The discloser’s identity may only be disclosed to the Commissioner, a person to which the provider is required by law to disclose their identity, key personnel of the provider or a police officer.

One of the Commissioner’s functions is to ensure compliance with the aged care responsibilities of approved providers.[88] The Rules may provide for the performance of a function of the Commissioner.[89]

Item 3 of Schedule 1 provides that the Rules may make provision for how the Commissioner deals with reportable incidents, including:

• action that may be taken by the Commissioner, including requiring an approved provider to do something
• the circumstances in which the Commissioner may authorise or carry out an inquiry into a reportable incident and
• how information received by the Commissioner regarding reportable incidents may be dealt with.

Enforcement powers

Schedule 2 of the Bill primarily amends the Commission Act to expand the range of enforcement powers available to the Commissioner. It triggers various regulatory powers contained in the Regulatory Powers Act in relation to civil penalties, infringement notices, enforceable undertakings and injunctions.

The Regulatory Powers Act contains a standard suite of provisions containing investigative, compliance monitoring and enforcement powers which can be applied to individual pieces of Commonwealth regulatory legislation. It must be triggered by an Act in order to apply to a particular legislative scheme.[90]

Currently, the Commission Act triggers the monitoring and investigation powers under the Regulatory Powers Act, subject to some minor modifications. This enables an authorised officer to enter a premises, either with consent or a warrant, and:

• exercise the monitoring powers provided for under Part 2 of the Regulatory Powers Act for the purposes of determining whether an approved provider is complying with their responsibilities and providing correct information under the Aged Care Act and
• gather material using the investigation powers under Part 3 of the Regulatory Powers Act, in relation to offences against the Commission Act, Aged Care Act, or related offences under the Crimes Act 1914 or Criminal Code.[91]

Item 10 of Schedule 2 extends the application of the investigation powers under Part 3 of the Regulatory Powers Act, to civil penalty provisions of the Commission Act or Division 54 of the Aged Care Act (which contains the responsibilities of approved providers in relation to quality of care).

Item 1 of Schedule 2 inserts proposed sections 74EA to 74ED into Part 8A of the Commission Act. Each section triggers an additional set of powers under the Regulatory Powers Act.

Civil penalty orders

Proposed section 74EA triggers the civil penalty powers under Part 4 of the Regulatory Powers Act, in respect of civil penalty provisions under both the Commission Act and Division 54 of the Aged Care Act. This enables the Commissioner (as the authorised applicant)[92] to apply to a relevant court (defined by the Bill as the Federal Court, Federal Circuit Court or a state or territory court with jurisdiction)[93] for a civil penalty order against a person who has contravened one of the relevant civil penalty provisions.[94] The court may order the person to pay such pecuniary penalty as the court deems appropriate, as long as it is not more than:

• in the case of a body corporate, five times the penalty specified for the relevant civil penalty provision or
• in any other case, the penalty specified for the relevant provision.[95]

A pecuniary penalty is a debt payable to the Commonwealth.[96] The Regulatory Powers Act specifies that a relevant court must not make a civil penalty order against a person where the person has been convicted of an offence for the same (or substantially the same) conduct.[97]

Infringement notices

Proposed section 74EB triggers the infringement notice powers under Part 5 of the Regulatory Powers Act, in respect of: civil penalty provisions under the both the Commission Act and Division 54 of the Aged Care Act; an offence under proposed section 74GA (in relation to the provision of information and documents—discussed further below); or an offence provision in Division 9 of the Aged Care Act (in relation to the obligations of approved providers).

This enables the Commissioner (as the infringement officer for the purposes of the Regulatory Powers Act)[98] to issue a person with an infringement notice if the Commissioner believes on reasonable grounds that they have contravened one of the relevant provisions. The infringement notice must be given within 12 months of the day on which the contravention is alleged to have taken place.[99] It must contain the matters specified in section 104 of the Regulatory Powers Act, including details of the alleged contravention, the amount payable under the infringement notice, and a statement to the effect that if the person pays the amount within 28 days, they will not be liable to prosecution in court in respect of the alleged contravention.[100]

The maximum amount which may be sought through an infringement notice in respect of an alleged contravention is the lesser of:

• one-fifth of the maximum penalty that a court could impose on a person for that contravention and
• 12 penalty units for an individual (currently, $2,664), or 60 penalty units for a body corporate (currently, $13,320).[101]

A person who receives an infringement notice may make written representations to the Commissioner (as chief executive for the purposes of the Regulatory Powers Act)[102] seeking the withdrawal of the notice. The Commissioner may also withdraw the notice on the Commissioner’s own motion.[103]

Enforceable undertakings

Proposed section 74EC provides the provisions of Chapter 4 of the Aged Care Act (which sets out the responsibilities of approved providers) are enforceable under Part 6 of the Regulatory Powers Act. This triggers the operation of a framework under which the Commissioner (as an authorised person for the purposes of this Part)[104] may accept an enforceable undertaking relating to compliance with one of the relevant Aged Care Act provisions, which may be enforced in court.

Under the framework, the Commissioner may accept a written undertaking given by a person that they will:

• take specified action to comply with a provision under Chapter 4 of the Aged Care Act
• refrain from taking specified action in order to comply with a provision of Chapter 4 or
• take specified action directed towards ensuring that the person does not contravene, or is unlikely to contravene in the future, a provision of Chapter 4.[105]

The person may subsequently withdraw or vary an undertaking, but only with the consent of the Commissioner.[106] The Commissioner may also cancel the undertaking by giving written notice to the person.[107]

Where the Commissioner considers a person has breached an enforceable undertaking, the Commissioner may apply to court for orders, which may include an order:

directing the person to comply with the undertaking

directing the person to pay an amount to the Commonwealth (up to the amount of any financial benefit the person has obtained directly or indirectly that is reasonably attributable to the breach) or

directing the person to compensate any other person who has suffered loss or damage.[108]

Item 8 makes a related amendment to subsection 63N(3) of the Commission Act, which sets out matters to which the Commissioner must have regard in deciding whether it is appropriate to impose sanctions on an approved provider for non-compliance with one or more of the provider’s aged care responsibilities. It inserts paragraph 63N(3)(fa), requiring the Commissioner to consider whether the provider has complied with any undertaking given under section 114 of the Regulatory Powers Act.

Injunctions

Proposed section 74ED provides that Chapter 4 of the Aged Care Act (setting out the responsibilities of providers) is also enforceable under Part 7 of the Regulatory Powers Act, which provides for the making of injunctions. The effect of this is that where a person has engaged, is engaging or proposes to engage in conduct in contravention of a provision of Chapter 4, the Commissioner (as an authorised person for this purpose)[109] may apply to court for a restraining injunction:

• restraining the person from engaging in the conduct and
• if the court believes it is desirable to do so, requiring the person to do a thing.[110]

Alternatively, where a person has refused or failed, is refusing or failing, or is proposing to refuse or fail to do a thing, in contravention of a provision of Chapter 4, the Commissioner may apply to court for a performance injunction which requires the person to do that thing.[111]

The court’s power to grant a restraining injunction is not affected by the issue of whether or not it appears that the person intends to continue to engage, or engage again, in the relevant conduct, or has previously engaged in that conduct, or whether there is imminent danger of substantial damage to any other person. Similarly, the power to grant a performance injunction is not affected by whether or not it appears that the person intends to refuse or fail again to do the relevant thing, or has previously refused or failed to do the thing, or whether there is imminent danger of substantial damage to any other person if the person against whom an injunction is sought refuses or fails to do that thing.[112]

While deciding whether to grant an injunction the court may issue an interim injunction.[113] The court has the power to discharge or vary an injunction.[114]

Proposed subsection 74ED(4) slightly modifies the application of the Regulatory Powers Act, to provide that a court may also grant an injunction under Part 7 by consent of all parties to proceedings, whether or not the court is satisfied that all criteria typically required for the granting of an injunction apply. The Explanatory Memorandum states that this aims to reduce the need for an application to be made to a court in each instance.[115]

Compliance notices—incident management

In addition to the Regulatory Powers Act enforcement powers triggered under the Bill, item 2 of Schedule 2 inserts proposed section 74EE into the Commission Act. This provides that the Commissioner may give a compliance notice to an approved provider, if the Commissioner:

• is satisfied that an approved provider is not complying with their responsibilities under the incident management provisions of the Aged Care Act (contained in proposed paragraph 54-1(1)(e), inserted into the Aged Care Act by item 1 of Schedule 1, as discussed above) or
• is aware of information that suggests an approved provider may not be complying with the incident management provisions.

The compliance notice must contain the information required by proposed subsection 74EE(2). It must specify action that the provider must take, or refrain from taking, in order to address the non-compliance (or possible non-compliance) and specify a reasonable period in which the action must be taken and within which the provider must provide evidence of this to the Commissioner.

Failure to comply with a compliance notice is subject to a maximum civil penalty of 60 penalty units (currently, $13,320).[116] It is also subject to possible sanctions under Part 7B of the Commission Act, and to the Regulatory Powers Act enforcement powers discussed above. The Commissioner may vary or revoke a compliance notice by written notice to the provider.[117]

A decision to give a compliance notice to an approved provider is a reviewable decision under the Commission Act.[118]

Item 7 amends existing section 63N, in respect of sanctions imposed by the Commissioner for non-compliance with a provider’s aged care responsibilities, to provide that the Commissioner may impose sanctions even if they have provided a compliance notice to the provider in relation to the non-compliance (regardless of whether the provider has complied with the notice).[119] However, item 8 inserts proposed paragraph 63N(3)(fb), providing that in considering whether to impose sanctions, the Commissioner must consider whether or not the provider has complied with any compliance notice given.

Commissioner’s power to require information or documents

Item 3 of Schedule 2 inserts proposed section 74GA into the Commission Act, providing the Commissioner with the power to give written notice to a person, requiring them to give the Commissioner any information, and produce to the Commissioner any documents (or copies of documents) specified in the notice, which are required for the performance of the Commissioner’s functions. Information or documents must be produced within a reasonable time stated in the notice—this time may be extended.[120]

A person is only required to comply with such notice where the performance of the Commissioner’s functions relates to the affairs of an approved provider, or former approved provider, that is a corporation.[121] Where a person is required to comply with the notice, and fails to do so, they commit an offence of strict liability subject to a maximum penalty of 30 penalty units (currently $6,660).[122] The Explanatory Memorandum provides the following justification for making this offence one of strict liability (which means there is no fault element, such as intention or recklessness, in connection with the failure to comply): [123]

Applying strict liability to this offence is important to the integrity of the regulatory regime given the Commission’s reliance on information and documents provided by persons in carrying out its functions, where first hand monitoring is not practical.

Applying strict liability to this offence will also help to deter against non-compliance with requests for information. Persons lacking fault deserve to be punished since they will be placed on notice about the strict liability to guard against contravention – a contravention which will be easily determined by reference to clear and objective criteria. The offences are also minor, … and not [punishable] by imprisonment.[124]

Strict liability offences for corporations

In addition to the new strict liability offence for failing to comply with a notice to give information, Schedule 2 amends three existing offences for failure to give information under the Aged Care Act to make them strict liability offences, for which no fault element must be established. Each of these offences only applies to corporations.

Item 4 amends existing sections 9-2 and 9-3A:

• subsection 9-2(3) makes it an offence for an approved provider that is a corporation to fail to comply with a request by the Commissioner for information relevant to the provider’s suitability to be an aged care provider
• subsection 9-3A(3) makes it an offence for a person who is or has been an approved provider, and is a corporation, to fail to comply with a request by the Secretary or Commissioner to give specified information relating to any of the matters specified under subsection 9-3A(1) (which largely relate to various payments including refundable deposits, accommodation bonds, entry contributions and unregulated lump sums).

The applicable maximum penalty for both offences is 30 penalty units (currently $6,660). Item 4 inserts proposed subsections 9-2(3A) and 9-3A(3A) providing that each is a strict liability offence.

Existing subsection 9-3B(5) makes it an offence for an approved provider that is a corporation to fail to comply with a request by the Secretary or Commissioner to give information in relation to matters specified under subsection 9-3B(2) (these largely relate to the provider’s financial suitability to be an aged care provider). A maximum penalty of 30 penalty units (currently $6,660) applies. Item 5 inserts proposed subsection 9-3B(5A) to provide that this is an offence of strict liability.

The Explanatory Memorandum provides a similar justification for these changes as in relation to the proposed strict liability offence under proposed subsection 74GA(4), discussed above, citing the dependence of the Commission on the information provided by aged care providers and the fact that the offences are punishable only by a relatively minor fine and not by imprisonment.[125]

Commissioner’s delegation power

Existing section 76 of the Commission Act permits the Commissioner to delegate any of the Commissioner’s powers and functions to any staff member of the Commission. The Commissioner may also delegate powers relating to the imposition of sanctions under Part 7B of the Commission Act to an APS employee in the Department of Health. The Commissioner must be satisfied that the delegate has suitable training or experience to properly perform the function or exercise the power.[126]

This will therefore enable the Commissioner to delegate any of the enforcement powers and functions proposed under the Bill, including those contained in the Regulatory Powers Act. As discussed above, the Scrutiny of Bills Committee has raised concerns about this, noting:

… any staff member of the commission may be appointed as an authorised applicant, infringement officer or authorised person in relation to Parts 4 to 7 of the Regulatory Powers Act or may give written compliance notices or notices requiring the giving of information or the production of documents.[127]