6.1
This chapter will consider legislation relating to funder of last resort provisions and discuss issues around the operation of an appropriate funder of last resort practice.
6.2
Part 6-2 of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 provides that where a Commonwealth, state or territory government institution is equally responsible for the child sexual abuse of a person with a now defunct non-government institution, the government will pay the defunct institution's share of redress in addition to any existing liability. A defunct organisation is defined as one ‘which no longer exists. It can be either a government or a non-government institution.’ The legislation is clear that the funder of last resort provision does not apply when institutions choose not to join the National Redress Scheme (NRS).
6.3
The Department of Social Services (DSS) clarified that the legislation requires government involvement, not that the government managed or operated an institution. The department noted this could include an example where children who were a ward of the state were referred to a now defunct care facility. DSS noted that in a situation like this, the relevant government would need to agree to be part of the funder of last resort processes.
6.4
Current operating arrangements are narrower than Recommendation 36 of the Royal Commission into Institutional Responses to Child Sexual Abuse, which stipulated that governments should act as a funder of last resort for all institutions irrespective of whether the government was equally responsible for the abuse.
6.5
There are concerns that current provisions are too restrictive and will prevent significant numbers of survivors from accessing redress through the NRS.
6.6
DSS explained that the process taken to declare an institution defunct is research intensive as they ‘look for any other existing body that could potentially take responsibility for that institution’.
6.7
In February 2020, DSS confirmed that seven institutions have been identified as defunct since the start of the NRS. This means that any applications relating to those organisations can now progress. In March 2020, DSS noted that there are ongoing research activities relating to a further 33 potentially defunct institutions.
6.8
The delay in declaring an institution defunct can affect processing times for a significant number of survivors. In March 2020, DSS confirmed that 76 applications were on hold due to three organisations expected to be categorised as defunct.
6.9
In April 2020, DSS confirmed that for two of those organisations a potential link to government has been identified. As a result, DSS are working with the relevant jurisdictions and seeking legal advice. This would affect the outcome of 58 applications. DSS reiterated that investigation to relation to the third organisation is ongoing.
6.10
A witness stated that he was pursuing redress from an organisation that became defunct in 2011. Despite ongoing advocacy neither the NRS nor the relevant state Attorney-General has been able to confirm if funder of last resort provisions will apply to survivors from that institution. Confounding confusion are reports that survivors from the same institution are receiving different responses to their applications from the NRS.
6.11
The Committee strongly encourages the second anniversary review to assess the approach adopted by Federal and State/Territory governments in relation to the funder of last resort provisions in the operation of the NRS. The review should consider how provisions can be expanded to ensure all survivors have equal access to redress and examine mechanisms so that survivors are not waiting long periods for their financial redress. An option may be that redress payments are made to the survivor once their claim has been determined suitable for redress. The NRS would then seek compensation from the relevant jurisdiction or jurisdictions.
6.12
The Committee recommends the Redress Scheme Governance Board expand the circumstances in which the funder of last resort provision applies so that the relevant participating jurisdiction/s act as the funder of last resort where:
the institution responsible for the abuse is now a defunct institution; and
the defunct institution would not have fallen under the operations of an existing institution.