1.1
On 21 October 2021 the Senate referred the provisions of the Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 (the bill) to the Community Affairs Legislation Committee (the committee) for inquiry and report by 16 November 2021. The referral was pursuant to a recommendation of the Selection of Bills Committee.
Conduct of the committee's inquiry
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Details of the inquiry were advertised on the committee's website. The committee also wrote to relevant organisations inviting submissions by 3 November 2021. Submissions continued to be accepted after this date.
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The committee received 23 submissions. Submitters are listed at Appendix 1.
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The committee held a public hearing in Canberra on 9 November 2021. The witnesses who gave evidence at the hearing are listed at Appendix 2.
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The committee thanks all those who contributed to the inquiry.
Structure of this report
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This report consists of two chapters:
This chapter outlines the key provisions of the bill and administrative details relating to the inquiry.
Chapter 2 examines the key issues raised in evidence and provides the committee's view.
Purpose of the bill
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The bill is intended to respond to recommendations of the Royal Commission into Aged Care Quality and Safety (the Royal Commission). The Minister for Health and Aged Care, the Hon Greg Hunt MP, said the bill is 'the second stage of aged-care legislative reform to deliver the high quality and safe aged care that our senior Australians deserve'.
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The Royal Commission was established on 8 October 2018. Its final report became publicly available on 1 March 2021 and made 148 recommendations. The Government's response to the Royal Commission's report was published on 11 May 2021 and cited a proposed $17.7 billion aged care reform package as part of the 2021-22 budget.
Amendments to the bill
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The Minister for Health and Aged Care introduced the bill into the House of Representatives on 1 September 2021. When introduced, the bill contained eight schedules.
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On 25 October 2021 the House of Representatives agreed to government amendments moved by the Assistant Minister to the Minister for Industry, Energy and Emissions Reduction, the Hon Tim Wilson MP. These amendments amended schedules 1, 5 and 8, and added a new schedule 9. The House of Representatives passed the bill, as amended, on the same day.
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Further amendments have been circulated by Senator Rex Patrick, which are intended to require that approved aged care providers ensure a registered nurse is on duty at all times in a residential facility. The bill has not yet been introduced into the Senate.
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This inquiry considered the bill as amended by the House of Representatives, as well as the possibility of other amendments such as those proposed by Senator Patrick.
Key provisions of the bill
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The bill contains nine schedules that would amend the following seven Acts:
Aged Care Act 1997 (Aged Care Act)—schedules 1 to 9.
Aged Care Quality and Safety Commission Act 2018 (Quality and Safety Commission Act)—schedules 2 to 8.
Aged Care (Transitional Provisions) Act 1997—schedule 1.
National Health Reform Act 2011—schedule 8.
Veterans' Entitlements Act 1986—schedule 6.
Military Rehabilitation and Compensation Act 2004—schedule 6.
Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988—schedule 6.
Schedule 1—Residential aged care funding
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Schedule 1 would amend the Aged Care Act and the Aged Care (Transitional Provisions) Act 1997.
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Currently, Australian Government subsidies for approved providers of residential aged care are calculated using the Aged Care Funding Instrument (ACFI). Schedule 1 of the bill would enable the introduction of a new model for calculating subsidies, known as the Australian National Aged Care Classification (AN-ACC), to replace the ACFI from 1 October 2022.
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The Minister for Health and Aged Care said the AN-ACC model 'has been developed in consultation with the aged-care sector and consumer groups over several years and it will encourage innovation and investment in the sector'.
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According to the explanatory memorandum, the AN-ACC model is derived from the Resource Utilisation and Classification Study conducted by the University of Wollongong. The AN-ACC 'is based on six key design elements', as follows:
1. Resident assessment for funding to be separate from resident assessment for care planning purposes
2. Assessment for funding purposes to be undertaken by external assessors capturing the information necessary to assign a resident to a payment class
3. Assessment related to care planning to be undertaken by the residential aged care facility based on resident needs and underpinned by consumer directed care principles
4. Provision of a one off adjustment payment for each new resident that recognises additional, but time-limited, resource requirements when someone initially enters residential care
5. A fixed price per day for the costs of care that are shared equally by all residents. This may vary by location and other factors
6. A variable price per day for the costs of individualised care for each resident based on their AN-ACC casemix class.
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The explanatory memorandum clarifies the three components of a subsidy under the AN-ACC:
Under the AN-ACC, the subsidy paid to the provider would consist of a fixed component and a variable component for each resident. Providers would also be paid an adjustment payment on a time-limited basis when a new resident enters the facility.
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Schedule 1 would build on the passage of the Aged Care Amendment (Aged Care Recipient Classification) Bill 2020, which amended the Aged Care Act to enable the classification of residential aged care recipients using the AN-ACC without affecting how subsidies to providers are calculated. When that bill was before the Parliament, the then Minister for Aged Care and Senior Australians, Senator the Hon Richard Colbeck, advised that the legislative basis of the AN-ACC would be similar to that of the ACFI:
A legislative framework already exists and has been in place for some time, which enables classifications under ACFI. The structure of these provisions is that there is enabling legislation in Part 2.4 of the Aged Care Act 1997 (Act) supported by more detailed provisions in the Classification Principles. The current bill [the Aged Care Amendment (Aged Care Recipient Classification) Bill 2020] simply continues and mirrors the same legislative approach and framework with enabling provisions for AN-ACC in the new Part 2.4A of the Act supported by more detailed provisions in the Classification Principles.
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The explanatory memorandum explains that schedule 1 'will now enable AN‑ACC classifications to affect calculation of basic subsidy'.
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The explanatory memorandum states that schedule 1 responds to recommendation 120 of the Royal Commission.
Schedule 2—Screening of aged care workers, and governing persons, of approved providers
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Schedule 2 of the bill would establish legislative authority for nationally consistent screening of aged care workers, and governing persons, of approved providers.
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It would amend the Aged Care Act to impose a responsibility on approved providers to comply with requirements of the Accountability Principles 2014 relating to screening. The explanatory memorandum states that the Accountability Principles will be amended to provide further detail on this responsibility, including the categories of aged care workers and governing persons who will need to be screened. An approved provider that is a corporation 'may also be subject to a civil penalty if they fail to comply with the new screening responsibilities'. The new screening responsibilities are intended to replace existing police check requirements 'following a suitable transition period'.
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Schedule 2 would also amend the Quality and Safety Commission Act to require the Aged Care Quality and Safety Commissioner (the Commissioner) to establish, maintain and operate the Aged Care Screening Database. The explanatory memorandum says that the database 'will contain information about screening applicants, their screening applications and decisions made by Worker Screening Units (WSUs) under an aged care screening law'.
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The bill would increase the Commissioner's powers to share protected information contained in the database, including with registered National Disability Insurance Scheme (NDIS) providers, the NDIS Quality and Safeguards Commission, WSUs, and state and territory health complaints bodies. The explanatory memorandum says this will:
…allow for providers to check that workers and governing persons are screened and will enable WSUs to access the information for purposes related to conducting the screening. It will also enable relevant regulators to have oversight of the Database and be informed of screening decisions.
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Finally, the explanatory memorandum says schedule 2 would also 'facilitate mutual recognition of screening checks across the aged care and disability support sectors'.
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According to the explanatory memorandum, schedule 2 'responds in part' to recommendation 77 of the Royal Commission.
Schedule 3—Code of conduct and banning orders
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Schedule 3 of the bill would enable the introduction of a code of conduct for approved providers, their workers and their governing persons. It would also introduce new measures for the Commissioner to enforce the code.
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The code is to be set out in rules made by the minister under the Quality and Safety Commission Act. The explanatory memorandum says:
It is anticipated that the Code will be based on the existing NDIS Code of Conduct as provided for in the National Disability Insurance Scheme (Code of Conduct) Rules 2018. The Code will be finalised following a consultation process. The aim of these amendments is to align with the obligations under the NDIS to increase harmonisation across the sectors.
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Schedule 3 would extend the Commissioner's monitoring and investigation powers under the Regulatory Powers (Standard Provisions) Act 2014 to include provisions relating to breaches of the code of conduct.
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It would also enable the Commissioner to impose a banning order on an aged care worker, or governing person, of an approved provider. According to the explanatory memorandum:
This will have the effect of prohibiting or restricting them from being involved in the provision of any type, or specified types, of aged care, or from engaging in specified activities as an aged care worker or governing person of an approved provider. Civil penalties may apply to approved providers, aged care workers or governing persons, for breaching a banning order.
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The amendments include provisions relating to the variation or revocation of a banning order on the application of an individual or on the Commissioner's own initiative. The explanatory memorandum states that the amendments 'make clear that certain decisions made by the Commissioner in relation to a banning order against an individual are reviewable decisions'.
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The explanatory memorandum states that schedule 3 'responds in part' to recommendation 77 of the Royal Commission and also responds to recommendation 103.
Schedule 4—Extension of incident management and reporting etc.
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Currently, residential care is covered by an existing Serious Incident Response Scheme (SIRS). Schedule 4 of the bill would extend this scheme to also apply to home care and flexible care delivered in a home or community setting from 1 July 2022.
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The amendments would introduce new responsibilities for providers of home care or flexible care delivered in a home or community setting, including to:
implement and maintain an incident management system that complies with the requirements of the Quality of Care Principles 2014; and
notify the Commissioner of reportable incidents (the definition of which will be expanded to include home and community care settings).
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Regarding reportable incidents, the explanatory memorandum says that '[p]rotections against retribution or vilification for individuals reporting such incidents will also extend to reportable incidents in [home and community care] settings.'
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The explanatory memorandum further explains that schedule 4 would:
…amend the Quality and Safety Commission Act to expand the Commissioner's powers to deal with incidents that are reported by Commonwealth grant funded aged care service providers, and authorise these providers to collect, use and disclose information relevant to their obligations in relation to the SIRS for the purposes of the Privacy Act 1988.
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The explanatory memorandum states that schedule 4 responds to recommendation 100 of the Royal Commission.
Schedule 5—Governance of approved providers etc.
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Schedule 5 of the bill is intended to improve the governance of approved aged care providers.
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The explanatory memorandum states that from 1 March 2022, approved providers would be subject to new governance responsibilities relating to the membership of their governing bodies and the establishment of new advisory bodies. Schedule 5 would also introduce measures intended to improve leadership and culture. The explanatory memorandum states that these reforms 'are aimed at improving transparency and accountability and ensuring the focus of approved providers, from the top down, is on the best interests of consumers'.
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Schedule 5 would also introduce new reporting responsibilities for approved providers, including preparing an annual statement on their operations, which would be made public.
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In addition, according to the explanatory memorandum schedule 5 would:
…require approved providers to notify the Commission of changes to key personnel and will replace the current disqualified individual arrangements with a suitability test for key personnel, consistent with the arrangements under the National Disability Insurance Scheme (NDIS).
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The explanatory memorandum states that schedule 5 'aligns with' recommendations 88 to 90 of the Royal Commission.
Schedule 6—Information sharing
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According to the explanatory memorandum, schedule 6 of the bill is intended to 'facilitate greater information sharing between Commonwealth bodies across the aged care, disability and veterans' affairs sectors in relation to non‑compliance of providers and their workers'.
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Affected Commonwealth bodies include the Department of Health, the Commission, the Department of Veterans' Affairs, the Military Rehabilitation and Compensation Commission, and the Repatriation Commission. Commonwealth bodies may also be prescribed by legislative instrument. The intention is to enable information sharing between Commonwealth bodies that have functions or powers in relation to the care and support sector, including a regulatory or oversight role. The explanatory memorandum says:
This is a first step towards broader regulatory alignment across the care and support sector aimed at providing consistent quality and safety protections for consumers and reducing regulatory burden for cross-sector providers and workers.
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The explanatory memorandum says it is intended that reciprocal information sharing arrangements will be implemented in relation to the NDIS.
Schedule 7—Use of refundable deposits and accommodation bonds
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Schedule 7 of the bill is intended to enable the Secretary or Commissioner to request information or documents from a provider or borrower of a loan made using a refundable deposit or accommodation bond. The amendments would create an offence for a borrower who does not comply with a request for information or documents. In addition, schedule 7 would extend the period of liability for existing offences relating to the misuse of refundable deposits from two years to five years.
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The explanatory memorandum states that further amendments in schedule 7 would 'enable the Commissioner to issue an infringement notice for a borrower who commits an offence for failing to comply with a request under these amendments'.
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According to the explanatory memorandum, schedule 7 is part of a phased approach:
The reforms implemented under schedule 7 of the Bill will form part of the second phase of a three phased plan to implement a new financial and prudential monitoring, compliance and intervention framework for the aged care sector.
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The explanatory memorandum states that schedule 7 'responds in part' to recommendation 134 of the Royal Commission.
Schedule 8—Independent Health and Aged Care Pricing Authority
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Schedule 8 of the bill would expand the functions of a renamed Independent Health and Aged Care Pricing Authority (Pricing Authority), and establish new governance arrangements and appointments processes.
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The expanded functions of the Pricing Authority would include the provision of advice on health care and aged care pricing and costing matters. There would also be certain functions conferred in the Aged Care Act.
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Schedule 8 would also establish new governance arrangements and appointment processes for the Pricing Authority, which the explanatory memorandum says would 'reflect the enhanced responsibilities and integrated functions of the Pricing Authority and streamline its administration'.
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Further provisions in schedule 8 would, according to the explanatory memorandum, amend 'the National Health Reform Act, the Aged Care Act and the Quality and Safety Commission Act to 'ensure appropriate use and disclosure of information required for the Pricing Authority to perform its new functions'.
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The explanatory memorandum states that schedule 8 'responds fully or in part' to recommendations 6, 11, 115 and 139 of the Royal Commission.
Schedule 9—Restrictive practices
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The intention behind schedule 9 is outlined in the supplementary explanatory memorandum:
The amendments in new Schedule 9 of the Bill revise the strengthened arrangements on the use of restrictive practices that commenced on 1 July 2021, to address unexpected outcomes in relation to the interaction with State and Territory guardianship and consent laws.
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The supplementary explanatory memorandum states that the strengthened arrangements relate to consent to the use of restrictive practices and were implemented in response to recommendation 17(1)(b)(v) of the Royal Commission. However, due to certain issues with how these arrangements interact with state and territory laws, 'restrictive practices cannot be used in certain circumstances where it may otherwise be appropriate'.
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Schedule 9 would amend the Aged Care Act to, according to the supplementary explanatory memorandum, 'introduce interim arrangements to address this issue until State and Territory laws can be amended'. These amendments would 'allow for the Quality of Care Principles 2014 to make further provision for informed consent to the use of restrictive practices to be given in circumstances where a care recipient does not have capacity to consent'. In addition, the amendments would 'insert an immunity provision where approved providers have relied on the consent given by the restrictive practices substitute decision maker'.
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The supplementary explanatory memorandum explains:
Introducing these arrangements will ensure that approved providers will be able to meet the strengthened requirements on the use of restrictive practices in jurisdictions where legal limitations with consent and guardianship laws exist.
Financial implications of the bill
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The explanatory memorandum states that there will be 'a medium cost to Government to deliver this package of reforms, at an estimated total of $201.3 million'. The supplementary explanatory memorandum does not revise this advice.
Consideration by other committees
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The bill was considered by the Committee for the Scrutiny of Bills (the scrutiny committee) and the Parliamentary Joint Committee on Human Rights (the human rights committee). Each of these committees reported on the bill before it was amended by the House of Representatives on 25 October 2021.
Scrutiny of Bills Committee
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The scrutiny committee raised six matters of concern, as listed below alongside the relevant provisions:
Schedule 1, item 51—broad delegation of administrative powers. This provision relates to the delegation of certain powers and functions by the Secretary to a person making an assessment for the purposes of section 22-4 of the Aged Care Act (which relates to assessments of care needs).
Schedule 2, item 4, proposed section 7A—legislative instrument not subject to disallowance. This provision relates to determinations that may be made by the minister that a law of a State or Territory is an 'aged care screening law'. These determinations would not be subject to disallowance.
Schedule 3, item 9, proposed section 18A—significant matters in delegated legislation. These provisions relate to the proposed code of conduct, including how information relating to a failure to comply with the code of conduct will be dealt with by the Commissioner.
Schedule 3, item 25, proposed section 74GC and subsection 74GD(1)—broad discretionary power and significant penalties. These provisions relate to banning orders that may be made by the Commissioner in relation to aged care workers or governing persons, and associated civil penalties.
Schedule 3, item 25, proposed section 74GI—significant matters in delegated legislation and privacy. This provision relates to the proposed register of banning orders, including publication of part or all of the register.
Schedule 8, item 78, proposed section 215A—reversal of the evidential burden of proof. This provision relates to a proposed offence relating to the disclosure of certain protected Pricing Authority information other than in accordance with legislation.
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For each of these matters, the scrutiny committee requested further advice or justification from the minister. At the time of writing, the committee had not published any responses from the minister.
Parliamentary Joint Committee on Human Rights
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The human rights committee commented on the proposed register of banning orders in schedule 3. The human rights committee highlighted that 'the rules may specify matters as to making the register, in whole or in part, publicly available, or specified information in the register publicly available'.
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The human rights committee observed that the proposed register promotes the rights to health and the rights of people with disability, because it 'may help to ensure that unsuitable people who may present a risk to aged care recipients are not engaged in the provision of their care'. However, provisions for the publication of the register engage and limit the right to privacy; a right which 'may be subject to permissible limitations if they are shown to be reasonable, necessary and proportionate'.
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The human rights committee concluded as follows, drawing its human rights concerns to the attention of the minister and Parliament:
The committee notes that the rules are likely to make provision for making the register publicly available, and the explanatory memorandum states it is intended to make information about banned individuals 'accessible to the public' in order to put employers on notice of individuals who are unsuitable to provide aged care services. Protecting vulnerable older Australians is clearly a legitimate objective, and publishing this information is likely to be effective to achieve this objective. However, if the information were to be made available to the public via a general internet search this may not be the least rights restrictive way of ensuring employers are aware of any banning order. The committee notes that much will depend on what the rules provide and it will examine such rules should they be made.