Referral
1.1
The Aged Care Amendment (Implementing Care Reform) Bill 2022 (the bill) was introduced in the House of Representatives and read a first time on 27 July 2022.
1.2
On 28 July 2022, the Senate referred the provisions of the bill to the Senate Community Affairs Legislation Committee (the committee) for inquiry and report by 31 August 2022.
Background
1.3
Australia’s aged care system provides subsidised care for older Australians. The system is large and complex, offering care services ranging from low-level assistance to intensive support.
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The Royal Commission into Aged Care Quality and Safety (the Royal Commission) was established on 8 October 2018 and tasked with inquiring into whether the aged care system was meeting community needs.
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An interim report, presented in October 2019 and titled Neglect, painted a damning portrait of a system failing to deliver safe and quality care. The March 2021 final report, Care, Dignity and Respect, called for far-reaching, fundamental reform.
1.6
The bill is part of a $18.3 billion reform package that the government committed to in 2021 and is seeking to deliver over the next five years in response to the findings of the Royal Commission. In 2022, the incoming government committed to a further $2.5 billion in aged care funding measures over the forward estimates.
1.7
Three other pieces of legislation have also been introduced into Parliament since the release of the final report:
Aged Care and Other Legislation Amendment (Royal Commission Response No. 1) Act 2021
the bill for this Act passed both Houses on 24 June 2021
Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021
lapsed at dissolution of the 46th Parliament in April 2022
Aged Care and Other Legislation Amendment (Royal Commission Response) Bill 2022
this bill passed both Houses on 2 August 2022.
1.8
The Department of Health and Aged Care (the department) advises that drafting of a new Aged Care Act is currently underway. If enacted, the bill and other interim legislation will be incorporated into the new Act.
Purpose of the bill
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The Minister states that the bill seeks to amend the Aged Care Act 1997 (the Act) by implementing a series of urgent measures which would see meaningful, practical improvements to how aged care services are delivered.
1.10
The proposed amendments respond in part to Recommendations 86 and 88 of the Royal Commission:
Recommendation 86: Minimum staff time standard for residential care.
Recommendation 88: Legislative amendments to improve provider governance.
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The government is of the view that, if enacted, the measures would increase the regulatory requirements placed on aged care providers and put quality of care and the safety of older Australians front and centre of aged care reform. The bill reflects the government’s election commitment of giving aged care residents the dignity and respect they deserve.
Provisions of the bill
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The bill contains three schedules, listed below.
Schedule 1—Registered nurses
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Schedule 1 seeks to establish a new responsibility in the Act for approved aged care providers of residential aged care and certain kinds of flexible care (specified in the Quality of Care Principles 2014). The proposed amendments would ensure that a registered nurse (within the meaning of the Health Insurance Act 1973) is always present and on duty on site at an aged care facility.
1.14
It is proposed that providers would be able to apply for an exemption in certain circumstances. For example, where residential aged care facilities are co-located with a health service which has registered nurses present, or if facilities are in remote, rural, or regional areas where providers are unable to recruit sufficient staff with the requisite skills.
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The bill allows for criteria for exemptions to be detailed in subordinate legislation, but does not require it. Consultation with sector stakeholders on what terms exemptions might be appropriate and potential alternative arrangements is still underway.
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The Explanatory Memorandum states that the suggested measures relating to exemptions are consistent with Recommendation 86 of the final report of the Royal Commission.
Schedule 2—Capping home care charges
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Approaches to home care charging differ between home care providers. While providers are already required to publish service charges online and make them available to care recipients, there is currently no set cap for charges and no effective cap on prices. Schedule 2 would amend the Act to address this, enabling the government to cap the amount that approved home care providers may charge home care package recipients.
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The proposed changes would also remove providers’ ability to charge exit fees, improving consumer transparency and ensuring that fees paid by older Australians and their families go towards the direct needs of care recipients.
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The bill allows for requirements in relation to prices charged by home care providers to be specified in delegated legislation.
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The department notes that home care fees are defined at section 52D-2 of the Act and are distinct from the charges the proposed amendments seek to cap. Home care fees cannot be charged to a home care package, and are therefore not captured by the proposed amendments.
Schedule 3—Transparency of information
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Schedule 3 seeks to amend the Act to require the Secretary of the Department of Health and Aged Care to publish information relating to aged care services and approved providers. The information to be provided would be informed through consultation with stakeholders and specified in the Information Principles 2014.
1.22
The proposed requirement aims to improve clarity on funds providers and aged care services spend on care, food, nursing, cleaning, administration, and maintenance, as well as what they retain as profit. This is intended to rebuild trust in the sector and ensure that public funds are spent on providing quality care for older Australians.
1.23
The bill is intended to ensure that information is published in a way which is clear, standardised and easy to understand. This would improve transparency and accountability, and empower people to make informed decisions about aged care.
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The new requirement responds to Recommendation 88 of the Royal Commission final report, which called for improvements in comparative information available to the public. Publishing this on the My Aged Care website will mean that all information is available on a single platform for ease of access and comparison. It will also provide assurance of authenticity, as information will be reviewed by the department prior to publishing.
Commencement of the bill
1.25
Commencement dates for provisions in the three schedules are set out in proposed section 2 of the bill.
Schedule 1 - 1 April 2023.
Schedule 2 - 1 January 2023.
Schedule 3 - 1 December 2022.
Conduct of the inquiry
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Details of the inquiry were made available on the committee’s website. The committee also contacted a number of organisations and individuals inviting submissions to the inquiry. 34 submissions were received, as detailed at Appendix 1.
1.27
The committee held a public hearing in Canberra on 25 August 2022. The witness list for the hearing can be found at Appendix 2.
Compatibility with human rights
1.28
The Explanatory Memorandum states that the bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Consideration by the Senate Standing Committee for the Scrutiny of Bills
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The Senate Standing Committee for the Scrutiny of Bills has not considered the bill at the time of writing.
Financial impact statement
1.30
The Explanatory Memorandum states that the total indicative financial impact is a cost of $460.0 million over forward estimates, with a breakdown as follows:
Table 1.1: Indicative financial impact of the bill over forward estimates
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Schedule 1
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$450.7 million
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Schedule 2
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$1.2 million
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Schedule 3
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$8.1 million
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Source: Aged Care Amendment (Implementing Care Reform) Bill 2022, Explanatory Memorandum, p. 2.
Acknowledgments
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The committee thanks the organisations and individuals who contributed to the inquiry by preparing written submissions and giving evidence at the public hearing.
Notes on references
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References to the committee Hansard are to the Proof Hansard. Page numbers may vary between Proof and Official Hansard transcripts.