Senator NEAL --I have some general questions about the additional estimates statements. Under the `Additional funds sought' is a transfer of ongoing funding from the carers support strategy to the community sector support scheme. What is the rationale for doing that?

Ms Halton --Senator, you would probably be aware of the community support scheme, which provides secretariat style grants to organisations. The Carers Association had been in receipt of a grant under that program.

Senator NEAL --Under the community sector support scheme?

Ms Halton --That is correct. But the money had previously come out of the carers program. We have transferred the money to support the Carers Association into the one bucket so they receive the one grant and they have to fulfil the one set of accountability requirements.

Senator NEAL --I suppose that makes sense.

Ms Halton --It makes it easier for them, basically.

Mr Podger --The corresponding figure is on page 95.

Senator NEAL --I suppose that transfer makes sense for the time being, but can we be assured that the carers group will always receive those funds? Or will they then have to compete against everyone else in the next round?

Ms Halton --They receive annual funding but they have an ongoing grant, which is the secretariat grant, for their activities.

Senator NEAL --That is what I am saying. Does this mean that the next time the community support scheme grants are offered, they will have to compete against everyone else for that administration grant?

Ms Halton --There is not an expectation that they would compete on an annual basis for those dollars, no.

Senator NEAL --They will get that automatically?

Ms Halton --They will have to sign a grant agreement on a regular basis, accountability requirements, et cetera. But no, they will not have to continue to apply.

Senator WEST --They will not be susceptible to the same thing happening to them as happened to the superannuants and pensioners?

Ms Halton --That, as you would probably be aware, Senator, is under program 7. It is not under my administration.

Mr Podger --There is no expectation of any change on that. But obviously the government of the day can look at it as they wish. But there is no expectation of any further changes.

Senator NEAL --On page 76, item 340-05-04, `Other services for residential aged care', an amount of $56,000 is to be rolled over, which obviously means that the money has not been expended at the same rate, or has been expended more slowly than was originally anticipated. Why is that so?

Ms Halton --My understanding is that there were a number of grants given under the National Action Plan for Dementia Care, particularly in respect of research and academic fellowships. As you would know, in those sorts of areas you make a fairly long-term commitment in respect of the kinds of research work that take some time to do. We sought from and agreed with the Department of Finance and Administration a commitment to be able to continue those grants to enable that work to finish. So those grants which were made during the National Action Plan for Dementia Care will see through the full life of those programs.

Senator NEAL --But basically you have just taken money that was to be paid earlier and pushed it back later.

Ms Halton --No.

Senator NEAL --You have not actually got any additional money.

Ms Halton --It is not additional money; that is true, but it enables those commitments to be met in the years in which the obligation is actually incurred.

Senator NEAL --I understand that, but it does not really answer my original question, which was: why was it not spent in the timetable that was originally anticipated?

Ms Halton --I think the judgment made at the time, Senator--and I was not there for that particular round of approvals--was that there was some substantial merit not only in doing some shorter term work but also in doing some longer term research work; that there was benefit to be gained in perhaps using some of that money in a slightly ongoing way. It is a relatively small amount of the funds that were available. But the benefit that was expected to accrue by actually using those moneys into the outyears was considered to be worthwhile.

Senator NEAL --Maybe you could take it on notice and give us a list of the research projects undertaken and what period they are covering. That would probably give me a pretty good indication.

Ms Halton --Yes, by all means.

Senator NEAL --On page 77 it says, under `Additional funds sought':

Reduction of capital expenditure resulting from the structural reform of aged care was assumed to have effect from 1 July 1996. However, implementation has been delayed until 1 October . . .

I assume it is going to be delayed again. So is that figure accurate any more? Will it not have to be a greater amount?

Ms Halton --No. That figure is in respect of something usually referred to by the acronym ARF, which stands for additional recurrent funding. In the Aged Care Act, providers have a choice as to whether they continue to receive ARF or whether they go for an accommodation charge. Because the commencement of the act was originally anticipated to be 1 July, and ultimately the act did commence--

Senator WEST --I presume that is a typo there on the third line, where it says `1996'.

Ms Halton --Yes, I think you might be right, Senator. The expectation was that it would commence on 1 July 1997. Correct.

Senator WEST --You did not have the legislation in 1996.

Ms Halton --Indeed. We then had a commencement date of 1 October. There were savings predicated in respect of ARF which, of course, would then not be realised in the period from 1 July through to 1 October. That amount is the expected loss of savings in that period. But, because the act did commence on 1 October, we would not necessarily expect that figure to change.

Senator NEAL --But I am saying that obviously there has now been a change in relation to the accommodation bond or the entry fee, or whatever you want to call it. We are now told that the details have been changed, and they have not worked out exactly how it is going to work. I assume that there will be a period of time during which the providers of aged care cannot access the accommodation bond, and they cannot access the new entry fee because it has not been worked out yet. I assume that they will have access to the ARF again, until that happens. So will you not require more funds to pay that?

Ms Halton --They have access to ARF if they maintain an existing commitment. If they relinquish that commitment, then they do not have the entitlement.

Senator NEAL --What, a commitment to--

Ms Halton --To ARF. ARF is an obligation. Some providers--

Senator NEAL --Yes, assuming all that.

Ms Halton --Okay. In essence, they do now have access to an accommodation charge. The minister signed principles last week which enable providers to charge eligible residents a maximum of $12 a day as an accommodation charge. Yes, you are right, there will be a meeting tomorrow where some of the arrangements will be discussed with providers and consumers. But they do now have access to a daily charge.

Senator NEAL --Can we have a copy of those principles?

Ms Halton --Yes. In fact, they have already been gazetted, but we can get you a copy of them.

Senator NEAL --This ARF is only affected by payment of the daily fee; it is not affected by the payment of the accommodation bond?

Ms Halton --It was. But a facility or service which is certified--and this means that it passes a basic standard, a physical test, if you like, of infrastructure--had the choice under the legislation as to whether it charged accommodation bonds or whether it continued to receive ARF.

Senator NEAL --But that is what I am saying. Unless you can tell me differently, there is still uncertainty about the accommodation bond and how it is going to operate.

Ms Halton --Their choice now is whether they receive an accommodation payment or ARF.

Senator NEAL --I see, you have changed it.

Ms Halton --Yes.

Senator Hill --Just say that again for me: accommodation payment or--

Ms Halton --Or ARF.

Senator NEAL --When you say `accommodation', you mean the $4,000 a year?

Ms Halton --Correct.

Senator NEAL --We have been told continuously that the details of how the $4,000 will operate have not yet been worked out.

Ms Halton --That is right. What the minister has done is agree principles which put in place an interim arrangement, which enables a provider who is certified--which means that they are not in receipt of ARF--to charge, for a maximum of five years, a maximum of $12 a day. He set that rate because he has not had the opportunity to discuss with the consumer groups and with the providers where the amount should be set as a cap. He is doing that tomorrow. That cap has been set because that is the maximum concessional amount that the government will pay. That was regarded by the minister as being fair in the interim in order to give him time to discuss the issue with the consumers and the providers.

Senator WEST --What do you mean: `the maximum concessional'?

Ms Halton --Under the legislation, you might recall that if a provider has up to 40 per cent concessional residents in a facility they receive $7; if it is over they receive $12 concessional subsidy.

Senator NEAL --So, if you are to go into a nursing home tomorrow, that nursing home can charge you--

Senator WEST --Twelve dollars a day.

Ms Halton --If you are not a concessional resident, yes, you can be charged a maximum of $12 a day--and it is set as a daily charge.

Senator NEAL --But that is on top of the other daily charge?

Ms Halton --Yes, that is an accommodation charge. That is correct.

Senator WEST --So the $22,500 assets test including house and contents still remains?

Ms Halton --That is correct. And we still have the notion, you will recall, `assisted residents' who previously could only be charged an accommodation bond of a certain size. The same arrangements apply in terms of income and assets test. An assisted resident may be charged a maximum of $6 a day.

Senator WEST --Why couldn't I get this information when I rang the hotline the other day seeking some of this information for a DoN who was trying to have a patient admitted on Thursday?

Ms Halton --On Thursday?

Senator WEST --I tried to get it earlier this week, and I could not get the $12 a day or the $6 a day.

Ms Halton --All I can do is apologise if you were not told that accurately. Certainly the hotline were briefed. In fact, the morning after that change was announced, they received the detail of both the $12 and the $6. But, certainly, if there is anybody you would like us to provide more detail to, we would be happy to. We have a series of fact sheets which perhaps we could send you.

Senator WEST --That would be most helpful. I also had another DoN who had to have two goes on the Thursday. She had had a death on the Wednesday night, on the Thursday she was admitting someone who was going to pay an accommodation bond, and she did not know what to do. I suggested she ring the hotline, because I could not think of anything else to do--and, besides that, the Prime Minister's office could not tell me what to do, even given that they had made the announcement. She rang the hotline, and they did not know and they had to get back to her. It was after lunch before they got back to her, which was a bit unsatisfactory because she was having an admission in the morning.

Ms Halton --As I said, if there has been a breakdown, all I can do is apologise. My understanding is that everyone on the hotline was briefed before 8 o'clock that morning and certainly our feedback has been that those questions were answered satisfactorily. As I say, I can provide you with the fact sheets that have been forwarded to people, including to individual providers.

Senator WEST --I actually want a copy of those, please, everything you have sent to them, because this DoN left her request and they rang back after 1 o'clock--it was somewhere between 1 and 1.30 p.m.--with that information about the $12 and $6 a day.

Senator NEAL --So for the accommodation it is $12, but patients are also required to pay the daily fee of up to $64 on top of that, aren't they?

Ms Halton --No. The means-tested fee which you have raised, which is a maximum of just over $63, is not now payable by any existing residents. Means testing will commence for new residents who are admitted on or after 1 March next year. All existing residents will pay the fee of 85 per cent of their pension, which is some $21.10 if they are a pensioner or $26.40 if they are a non-pensioner.

Senator NEAL --I will just get this down. Existing people who are non-pensioners pay how much?

Ms Halton --They pay $26.40.

Senator NEAL --They will also pay the $12 or not?

Ms Halton --If they are eligible to pay. If they have assets of more than $22,500 and they are not an assisted resident--in other words, if they have got perhaps over $40,000 worth of assets--they may be eligible to pay the $12.

Senator NEAL --And post 1 March next year they will pay, assuming the minister does not revise his maximum--he is likely to go up from $12 rather than down, I would have thought--

Ms Halton --Until there is the discussion with consumers and providers, I do not think we know where that will be.

Mr Podger --The Prime Minister stated that the $4,000 would be an average--there would be some more and some less--but it was not settled what the cap would be, but even the $12 that has been set now is an `up to $12'.

Senator NEAL --I am saying that, because of the Prime Minister's statement and the fact that at the moment the $12 is a maximum, after discussions it is likely that the maximum will be greater than $12.

Mr Podger --One would expect the maximum to be higher than the $12.

Senator NEAL --So they will be paying the $12 accommodation amount plus the $63.

Ms Halton --The $63 is a maximum that is payable under income testing--

Senator NEAL --I understand that it is a maximum.

Ms Halton --Which will be less than one per cent of residents on incomes of $56,000 or more.

Senator NEAL --So some people--I suppose the people worst affected--will be paying $75 a day?

Ms Halton --That would be a person who would have to have an income of more than $56,000.

Mr Podger --And sizeable assets.

Ms Halton --And sizeable assets.

Senator NEAL --That is still a lot of money.

Ms Halton --As a proportion of the costs of a nursing home place, the person who pays the maximum charge would still receive a very substantial Commonwealth subsidy.

Senator Hill --It is still an average public contribution of just under $30,000.

Senator NEAL --I did not catch what you said.

Senator Hill --I said there is still, is there not, an average Commonwealth taxpayer contribution of $30,000 per head?

Senator NEAL --Do you think that should not be the case?

Senator Hill --Sorry?

Senator NEAL --Do you think that there should not be that contribution?

Senator Hill --I think it is sometimes not understood that--correct me if I am wrong; I do not claim expertise--the taxpayer contribution in this area still works out on average at about 70 per cent of the cost. Is that right?

Ms Halton --Yes, it is a very substantial contribution.

Senator NEAL --Do you think the contribution that is made by taxpayers to nursing homes places should continue at that rate?

Senator Hill --I have no problem with a fair contribution by an individual.

Senator NEAL --That wasn't the question.

Senator Hill --And that takes into account their income and their assets. You can debate what is a fair contribution, but if the taxpayer at large on average is continuing to pay 70 per cent of the cost and it works out at about $30,000 a head that is a lot of money.

Senator NEAL --So is $75 a day. I suspect that is a debate that we are going to have in the chamber some time.

Senator Hill --Yes.

Senator WEST --The annual report, under `Underachievements', says:

No State or Territory has yet agreed to sign revised Home and Community Care agreements which would improve the effectiveness and efficiency of the program.

Why have the states and territories not signed?

Ms Halton --It is important to understand that the home and community care program, which of course has been in operation for well over 10 years and has had an agreement which has governed that program for some years, has been the source of probably the most detailed and careful process of review. The process of formulating a new draft agreement, which has taken people quite some time, has been something which I think both the states and the territories and the Commonwealth have approached with some enthusiasm.

The move to consider whether or not agencies are going to sign has been impacted on by a number of things, but in fact we are at the point now where we are very close to having a signature with, we hope, Victoria and, indeed, South Australia also. They have not indicated that they are imminently to sign, but we believe that that is the case.

Senator WEST --When did the old agreement expire?

Ms Halton --The home and community care agreement does not have an expiry date.

Senator WEST --How old was the previous agreement?

Ms Halton --The agreement was a schedule to a piece of legislation. The act had a model agreement attached to it. The agreements that were signed with each state and territory largely took that form, and so in most states and territories the agreement is now approximately 10 years old--a little older.

Senator WEST --How long have you been negotiating to get them to sign the revised agreements?

Ms Halton --Warwick Bruen from Community Care can tell you precisely, but the final version of the agreement has only just been formulated.

Mr Bruen --The Commonwealth and state ministers agreed with the principles behind the agreements in June 1995. Minister Moylan offered the states a revised agreement in June 1996. One of the difficulties has been that several states have changed governments in that time and have wanted to reconsider their positions. Plus there has been considerable negotiation over some of the minor aspects in the agreement, particularly accountability aspects, which, as Ms Halton pointed out, we have just about resolved with several states.

Senator WEST --What states changed governments after 1995?

Mr Bruen --Well, South Australia--

Senator WEST --Since 1995?

Senator NEAL --Almost, but not quite.

Senator WEST --We had a good go.

Mr Bruen --The ministers changed, I should say. I should correct myself.

Senator WEST --Queensland changed, but that is the only one.

Mr Bruen --And the ministers have changed, which causes reconsideration.

Senator WEST --I would have thought, given there is only one Labor state and territory amongst the lot, you would have been coming here telling me that it was New South Wales dragging their feet and being all bloody minded and terrible because it was the only Labor state in a conservative government.

CHAIR --Can we move on?

Senator WEST --I am interested to know why--

Mr Podger --I guess we were being frank again about the underachievement we would have preferred not to have had, but we thought we would not say it.

Senator WEST --We would have asked you anyway, wouldn't we?

Mr Podger --We were hoping that you might actually acknowledge that we had acknowledged it.

Senator WEST --I am delighted that you have all the underachievements in here, Mr Podger. I think that is very good. It actually enables us to go on and ask the key questions.

CHAIR --Could we move on please, Senator. Senator Neal?

Senator NEAL --In relation to the accommodation fee--is that what you are now calling it?

Ms Halton --Accommodation charge.

Senator NEAL --I have to get it right. I cannot keep up with it.

Ms Halton --I cannot promise you that that is the permanent label.

Senator NEAL --For tonight we can use it.

Ms Halton --Yes, for tonight and for the purposes of the discussion.

Senator NEAL --There has been some suggestion that that could be paid by a form of reverse mortgage. Has the department done any research, made any enquiries, set up any scheme or done anything in relation to reverse mortgages?

Ms Halton --Reverse mortgages are not a new product.

Senator NEAL --We are aware of that.

Ms Halton --Clearly, the minister and his office have been having a variety of discussions. We have assisted them in those. But, at the end of the day--

Senator NEAL --With whom?

Ms Halton --I do not know that I am at liberty to disclose who they have been having conversations with.

Senator NEAL --Not exactly, but banks--

Ms Halton --Financial institutions. Those discussions, I think it would be fair to say, are proving, from their perspective, quite productive.

Senator NEAL --Social Security say that they have some expertise in reverse mortgages.

Ms Halton --Yes, that is correct.

Senator NEAL --And that if you were doing something in that area they would have expected you to ask their advice. Why haven't you asked for their advice?

Mr Podger --We have been talking to them, and we will be talking with them further.

Senator NEAL --I was told that their advice had not been sought.

Senator Hill --Apparently you are wrong.

Senator NEAL --I am wrong?

Senator Hill --Yes. Mr Podger just said that they have been consulted.

Senator NEAL --What I am saying is that Social Security says that their advice has not been sought. So either Mr Podger is wrong or Social Security is wrong.

Senator Hill --I think you must have misunderstood them.

Senator NEAL --No, I do not think so. We will have a look at Hansard.

Mr Podger --I am meeting with them tomorrow. The discussions we have had to date have been, obviously, very preliminary in terms of the speed of the changes we are trying to take on board. But the department will certainly be talking to Social Security to work these things through.

Senator NEAL --I did not understand what you said then.

Mr Podger --I said that the department will certainly be talking to Social Security to work these things through. There are a number of other things that were announced by the Prime Minister last week which we will clearly have to talk to Social Security about--for example, the arrangements regarding rental income; we will need to talk to Social Security about the details of that.

Senator NEAL --There are basically two avenues you can go down in terms of reverse mortgages. Obviously, reverse mortgages are available on the market commercially. You can just say that you have a bill to pay and it is for you to work out with whichever financial institute you like a reverse mortgage. Or, alternatively, the Commonwealth can actually negotiate with the banks and set up some sort of scheme for reverse mortgages. I know that they did that previously with Social Security when pensioners were basically trying to keep their homes. Which model is it anticipated will be pursued in this case?

Ms Halton --I do not think the minister has yet reached a position on a preference.

Senator NEAL --Has the department been asked for advice on that question?

Ms Halton --My understanding is that the nature of advice we have or have not been asked for is a matter that we generally do not comment on.

CHAIR --It is specifically precluded.

Senator NEAL --I am not asking for the nature of the advice; I am just asking whether you have been asked for advice. That is quite common, and I have asked that question and received responses on many occasions.

Senator Hill --That is alright. Have you been asked for advice?

Ms Halton --We have provided a range of advice.

Senator NEAL --On reverse mortgages?

Ms Halton --Background information and advice, yes.

Senator NEAL --On reverse mortgages not just general advice?

Ms Halton --Yes.

Senator NEAL --How much money--

Senator Hill --I think what she said was on a range of options, including that.

Ms Halton --Correct.

Senator NEAL --I understand that, but I am just trying to make sure that it actually covers reverse mortgages. I wanted to make sure it did not slip between the cracks. How much money has the department spent on publicising the changes to the arrangements for nursing homes in the last 12 months?

Ms Halton --If we include training, printing and a variety of other materials, $1.2 million.

Senator NEAL --How much more is it anticipated or budgeted to spend on publicising the changes in nursing homes?

Ms Halton --I cannot actually give you a figure because at the moment we are in the process of considering what material it is necessary to provide. Again, we are going to talk with consumers and providers tomorrow about a number of those issues. Until we have had that discussion, I think it is a little hard to scope exactly what we should provide, how often and to whom.

Senator WEST --Following that up, can we have a breakdown--I am happy for you to take the question on notice--of the material that you produced? You produced the document `choices' there. You have produced videos that I know. You have produced material for very specific target groups, like the ACATs. You have produced documentation for them and videos for them.

Ms Halton --No, we have produced the one video, which was aimed at the general market, and then one slightly more specific one. None of that was explicitly aimed at the ACATs. We have given ACATs a package which was tailored to their needs but which utilised a variety of sources that we also used for other people.

Senator WEST --I would like a breakdown of what you have done as far as publicity goes and the costing that goes with it--the mark I, II and III, and I suppose we are up to mark IV now in the changes, aren't we? Does that include letters that the minister might have written to residents in nursing homes?

Ms Halton --In terms of distribution costs?

Senator WEST --In terms of printing and distribution costs.

Ms Halton --To be honest, Senator, I cannot recall whether the $1.2 million includes that. I will check on that and we will include that in the information we give you. It is important to understand about the material that we have produced. You mentioned Care choices. It is still being utilised with an insert which explains some of the differences that apply. A number of the other documents will be republished. For example, as to the users guide to the system, which you may be familiar with, we have been printing that on only an as needs basis. When we reprint, we will print with relevant information.

Senator NEAL --I want to ask you some questions about the Social Security publication because I found it quite fascinating.

Mr Podger --Senator, on the issue of taking some of these questions on notice, I would seek your indulgence as to how much detail, bearing in mind the other workload on my staff at the moment.

Senator WEST --I would like to have some idea of what was done.

Mr Podger --Certainly, I did not mean to be other than as helpful as we can be; I was just seeking some indulgence as to how much detail.

Senator WEST --I would also like to know how many letters have been written to residents. I do not know whether former Minister Moylan sent any, but I certainly am aware that Minister Smith sent a couple because he sent one on 27 October. I am interested to know how much they have cost. This has gone to all hostel residents. I presume a similar thing would have gone to all nursing home residents as well. How many different letters have gone out to residents, and how many different letters have gone out to institutions? What have the printing and distribution costs of those been?

In fact, I would like a copy of some of them because I have had complaints from hostels and nursing homes that the English they have been written in is good public service language and they have actually had to do an interpretation for the residents. It is not particularly well targeted at people with mild dementia or even without dementia. I would like to see the copies to know whether I have a hostel manager who is being helpful or not.

Ms Halton --Senator, in terms of the letters that have been sent--by all means we can give you an indication of what has been sent--it is important to understand that, in respect of hostel managers and the information they have been in possession of in order to assist their residents, there have been a number of training efforts which go to, for example, the new classification instrument and also the changes which have assisted those providers.

If you look at, for example, the letters that have been sent to residents, you will see that those letters have principally gone to the key issues that have impacted on those individual residents. There has not been a flurry of letters to residents, precisely because there was concern that residents would become confused. Indeed, for existing residents, the principal change that impacted on them was in fact in respect of means testing and not other elements.

Senator WEST --I am saying that I have had at least one, if not more, directors of nursing or supervisors say to me that the language used in the letters was of a standard where they basically had to do a rewrite so that their residents could understand it. I would like to see an example so I can satisfy myself as to whether the department or the supervisor has got it right. I have a copy of one letter that has been sent out. I am sure they must have gone off in multiple numbers.

Mr Podger --We can give you a look at one of the standard letters, obviously taking off the addresses. I have no difficulty with showing you that.

Senator WEST --I do not know whether they have necessarily been addressed. The one I have a copy of is not a personally addressed one.

Senator NEAL --In terms of the cost of publicising the nursing home changes, you said that you spent $1.2 million and you now still have to assess what further expense will be required. What will be the source of those funds once you determine how much more you require?

Mr Podger --We would be seeking approval from other ministers--that is, the Minister for Finance or the Prime Minister--for additional moneys.

Senator NEAL --Basically an emergency type payment?

Mr Podger --It would be coming through the Advance to the Minister for Finance, or something like that, to provide us with some additional moneys. But, as Ms Halton said, we are still making an assessment of that. As was suggested somewhat jocularly before, but it is in fact serious, our assessment is that the $1.2 million we allocated for the previous one was not sufficient.

Senator NEAL --So it is likely that the further expenditure will be greater than $1.2 million again?

Mr Podger --I would not want to speculate, other than to say that my view is that the previous $1.2 million was not sufficient.

Senator Hill --There is probably a much greater public awareness of these issues now.

Senator NEAL --I am sure everyone is talking about it, Minister.

CHAIR --Get the truth out, Minister.

Senator Hill --You are not starting from the same base in terms of public knowledge.

Senator NEAL --I was a bit fascinated by this booklet. It was given to me by Social Security today. Have a look at the aged care section.

Ms Halton --Superseded is incorrectly spelt, but never mind.

Senator NEAL --This booklet has been distributed to 75,000 people quite recently without `superseded' written across it.

Ms Halton --In fact, the part of this which is incorrect is not this whole section. I have not seen this with `superseded' written on it before.

Senator NEAL --It was a copy given to me by the Department of Social Security.

Ms Halton --In fact, if you look at this, the majority of this text is still perfectly correct. It talks about aged care assessment teams. It talks about the care that can be provided in residential care facilities. All of that is quite correct. The issue that is rightly identified here as being no longer correct would be in respect of accommodation bonds for nursing home type residents.

Senator NEAL --I just found that amusing and I thought I would share that with you. Have you been asked by the Department of Social Security to provide new text to correct that?

Ms Halton --We have an ongoing discussion with our colleagues not only in Social Security but also in Centrelink, particularly in respect of text and material to be used publicly.

Senator NEAL --For this particular book?

Ms Halton --I cannot answer that question. My suspicion is, yes, we have, because there is very regular dialogue, but I will confirm that and let you know.

Senator NEAL --If you have, I would be interested to know what the text is because I actually forgot to ask about the revised text. Are you aware of what steps were taken to ensure that people were not misled by this publication?

Ms Halton --No, I am not.

Senator NEAL --Was there any concern within your department that people reading that might think it was still true?

Ms Halton --I cannot comment on the manner in which this is distributed. I can tell you that, consistent with the advice that we gave all of our hotline people by 8 o'clock the following morning in respect of the changes as announced, the telelink people were given a similar briefing. In fact, you would appreciate that all the telephone operators who answer questions in this respect have a series of scripts that they use in respect of standard questions. Those telephone operators were similarly briefed--as were our own--to ensure that they understood the effect.

Senator NEAL --I heard that before. That was not the point of my question. Obviously the circumstances have changed. Did someone in the department say, `We know that this Social Security pamphlet has gone out. We had better contact them and tell them there is a problem with it'?

Ms Halton --The point I was trying to make, and possibly not terribly clearly, was that we had a dialogue with both Social Security and Centrelink not explicitly around this publication but more generally around the fact that there had been a change, that there was a need to give them accurate information in a very timely way. The announcement was made at 6.30 or 7 o'clock--depending on where you were and in which state--and prior to 8 o'clock the next morning materials had been provided to both Social Security and Centrelink, for example, for use by their hotline people, but more broadly so they were informed about what the changes were.

My understanding is that that material was to be distributed to people not only manning telephones but, more broadly, around their network. What I cannot say to you is that we explicitly said to them, `And you must update this document,' because there was a much more general approach to giving them the revised information so all of their information sources could be informed.

Mr Podger --I do have somebody here from Centrelink, if you wish to direct any questions to them. This document is a DSS document, but I do have somebody from Centrelink here. Because of the arrangements we have, they do work for us and they are available to answer any questions you may wish to ask.

Senator NEAL --Did they have any discussions about this issue? Can they help us with this issue?

Mr Podger --I understand that circulation of this document ceased when the Prime Minister's statement was made. So there has been no circulation of this document since then.

Senator NEAL --What was done to rectify the information that went out post that, if anything?

Ms Kilpatrick --As soon as the first change was made to the policy, Centrelink, which is distributing this book on behalf of the Department of Social Security, ceased to provide any further copies to anyone. If you have received some today, I think that is--

Senator NEAL --It was from the department. I accept that I was not going to be misled by it.

Ms Kilpatrick --They have not been available generally. At the moment there is a slight delay until such time as the policy settles and all announcements have been made. We, on behalf of the Department of Social Security, will then try to track down all the copies that have gone out and send replacement pages to the people who have them. We do have a mailing list. They went out according to a mailing list and there have been some bulk supplies. To the greatest extent possible, we will try to trace those and provide replacement pages.

Senator NEAL --What happened to the copies that were not distributed?

Ms Kilpatrick --They are stockpiled.

Senator NEAL --For what purpose?

Ms Kilpatrick --Because they may be able to be used later.

Senator NEAL --How?

Ms Kilpatrick --With replacement pages.

Senator WEST --How many were printed?

Ms Kilpatrick --I will take that on notice.

Senator NEAL --I think it was 75,000 plus 83,000, as I recall. We already got that answer.

Senator WEST --Ms Halton, I just draw your attention to page 42 of this document. I find that table a bit misleading. It has retirement villages being compared to residential care facilities. The name `retirement village' is often used by complexes that actually do contain nursing homes and hostels. They should also be comparing services and the support and care given at each one of those. I just found that somewhat misleading in the title.

I know of a complex near where I live that is called a retirement village but it has a hostel there. The hostel, of course, has to pay the bonds, but a number of people have seen the title of the place and presumed that `retirement village' meant they were going to be treated differently and not have to pay accommodation bonds.

Ms Halton --Labelling, as you know, is extremely treacherous.

Senator WEST --I just wanted to draw that to your attention.

Ms Halton --I take the point. We always strive for clarity. If you are giving us feedback that there is not clarity, we will take it on board.

Senator WEST --Thank you.

Senator NEAL --Has any money been spent so far in establishing the prudential arrangements?

Ms Halton --A small amount of money has been spent in terms of the establishment of the arrangements. I cannot tell you precisely what it is to date, but I can tell you that it is a very small amount.

Senator NEAL --Can you take that on notice and advise us exactly--perhaps not exactly--

Ms Halton --In order of magnitude, certainly.

Senator NEAL --Can you also tell us how much it will cost to set up the board to oversee the prudential arrangements and how much will it cost to run the board?

Ms Halton --The board has costs in relation to sitting fees et cetera and any issues regarding travel. Apart from that, the board has relatively limited costs. There are some limited legal costs and some limited costs in respect of directors' insurance, et cetera. We can give you an order of magnitude figure again in that respect. As the board has met once, to date those costs have not been incurred.

Senator NEAL --Does that mean you will not be paying the board members any fees?

Ms Halton --No. The board members are entitled to receive sitting fees, that is true. But, as I have said, the board has met only once; it is relatively new. So to date the expenses incurred have been very minor.

Senator NEAL --What I asked you for was the running costs on an ongoing basis. How many members of the board are there?

Ms Halton --There are five members of the board.

Senator NEAL --Could we have a list of those board members?

Ms Halton --They were released by the minister, so by all means.

Senator NEAL --How much are they being paid in terms of their fees?

Ms Halton --I have not actually seen a formal determination by the Remuneration Tribunal, but I understand there is one. If I can, I will also take that on notice.

Senator WEST --What are the prudential arrangements going to be oversighting?

Ms Halton --There is a need to ensure that appropriate prudential protections and coverage are in place. Accommodation bonds, as you know, for hostel type residents do continue. It is important that there is--

Senator WEST --You have just opened Pandora's box for me. Accommodation bonds continue for hostel type residents.

Ms Halton --That is correct.

Senator WEST --So we have gone from having aged care facilities back to having hostels and nursing homes, have we?

Ms Halton --We have facilities that can accommodate hostel type residents and nursing home type residents. There will be many facilities in country areas--we have talked about this before in this committee--that will have a mixture of residents, particularly small country towns where ageing in place is going to be important. In those country towns how that facility will be described--most probably as a residential aged care facility--will probably be a matter for that community. There will be some facilities that will continue, as was always the case, to specialise in hostel type care, and there will be some facilities that will continue to specialise in nursing home type care.

Senator WEST --How are they going to determine who pays a bond and who pays the $4,000?

Ms Halton --ACATs have always indicated under these arrangements whether a person is--and this is a technical term under the act--a high care resident or a low care resident. In more common parlance, that would be a hostel type resident or a nursing home type resident. That is defined under the act. A high care resident, a nursing home type resident, is someone who, on the resident classification scale, would be a one to a four. A low care resident, a hostel type resident, would be--

Senator WEST --A five to a seven.

Ms Halton --A five to an eight.

Senator WEST --You are not paying them for an eight, so they are not going to put any claims in for an eight, are they? What happens if somebody fluctuates between a four and a five?

Ms Halton --If a person stays in the facility, if they age in place, basically their arrangements do not change. If they want to leave their bond there, they will have that choice.

Senator WEST --Do you mean if they move they can leave their bond there?

Ms Halton --No, if they move to a different facility, they renew admission. That is a different issue. Let me take the country town as an example. If somebody is admitted as a low care resident, they are relatively mobile; they are receiving hostel care. They age in place and become increasingly frail. They paid an accommodation bond on the way in the door, and that accommodation bond would continue to be the source of their accommodation payment. They would not have to have that refunded when they trip over the four-five boundary and then renegotiate a different charge. They stay in the same bed and the same arrangements apply to them.

Senator WEST --Most of the institutions I am thinking of certainly would not be able to continue to take them after they hit category four. What happens to them?

Ms Halton --They are refunded their accommodation bond when they move.

Senator WEST --What happens if a person is admitted as a four and their condition improves? I am thinking of someone who has a stroke and their condition improves after they have had some rehabilitation. Over a period of time they become a category five after they have been a category four. What do you do with them?

Ms Halton --It is rare that a facility would have somebody reassessed very quickly, particularly if they go from a four to a five. It is not our expectation, if you are in the same facility, that that facility can renegotiate your circumstance. Exactly as is the case under the act now, if your circumstances are agreed on as you are admitted, those are the circumstances that prevail while you remain in that facility. That means, if you are a concessional when you go in, you stay a concessional. If you agreed to pay an accommodation charge when you went in, that is the arrangement which remains. You have a five-year limit. The situation is similar if you went in as a low care resident and you paid an accommodation bond.

Senator WEST --In the prudential, how much money will not go into the fund because of the abolition of accommodation bonds?

Ms Halton --That is a little hard to tell. We would anticipate that there would obviously be a lot less going into the fund. But, as you probably know, the minister had always considered the power to approve alternative prudential arrangements. It was never our anticipation that all of the money paid by way of accommodation bonds would be in that particular scheme. The important feature was that there was prudentiality--that people's money was covered under those prudential arrangements. Whether that was in the general scheme or alternatives was a matter to be considered once alternative proposals were received.

Senator WEST --But the prudential trustees had reasonable expectations that they would be fund managers for a significant amount of money.

Ms Halton --Sorry, Senator, I am a little unclear. Are you talking about the trustee company or are you talking about the board?

Senator WEST --I am talking about the trustee company now.

Ms Halton --The trustee company has an arrangement which deals with the volume; in other words, their fees are predicated on volume. In fact, their fees had nothing to do with exactly how much money was going through.

Senator WEST --Weren't their management fees a percentage of the amount of money they were looking after?

Ms Halton --It was to do with transactions, actually.

Senator NEAL --What percentage?

Senator WEST --What percentage of the transactions?

Ms Halton --It is a very small percentage. It is a standard fee. I can let you know what that was.

Senator WEST --I would hope it was a small percentage--

Ms Halton --Yes, very.

Senator WEST --Or part of a percentage.

Ms Halton --A fraction of a percentage.

Senator WEST --In going through this legislation--and correct me if I am wrong--it is in terms of billions, when the scheme actually gets up and running properly, that they are talking about administrative--

Ms Halton --There was certainly an expectation that there would be billions of dollars raised. Whether that money would all have been in the general scheme was not clear. Indeed, in discussions with the trustees, it was made perfectly clear that we did not know what volume would be in that scheme or in the alternatives.

Senator WEST --You must have had some indication, because those who could set up alternative schemes had to meet certain criteria, did they not?

Ms Halton --That is correct.

Senator WEST --What were those criteria?

Ms Halton --Those criteria went essentially to a capacity to provide suitable prudentiality.

Senator WEST --So there was only ever going to be a very limited number who would be eligible for that?

Ms Halton --It depends on whether you believe they had the capacity to meet the criteria, which were published in the principles. The principles went to the capacity to provide protection and did not set out additional requirements. For example, there were requirements in terms of providing individuals with adequate information. There were requirements to do with, for example, the manner in which balances were held, audited--I could go on. They were published in the user rights principles. It was certainly the case that a number of organisations were looking to find schemes that actually met the requirements of these principles. From work we had seen, a number of those organisations would indeed have done so.

Senator WEST --But they had not, at this stage, and they had not received any response from some of their application inquiries.

Ms Halton --There were two alternative schemes approved and there were a number of alternative schemes that were under active consideration. In fact, we were in the process of getting actuarial advice on a number of them, and preliminary information suggested that they did meet our requirements.

Senator WEST --How much are we talking about in terms of those going off into their own private arrangements and others? What is the breakdown? I do not want them individually; I am quite happy to have a breakdown saying, `That would go to the prudential fund, that would go to their own individual--'

Ms Halton --I suppose my point is that I cannot give you that. We know who had been approved, we had seen a good number of alternative applications and we knew that there were others in the pipeline. These principles did not fetter people's ability to apply for alternatives. A number of people had indicated, for example, that they were considering their options and they would see who had alternative proposals. In conversation with the general scheme board it was accepted that it was consistent with the broad objectives the government had set that, if people did have a capacity to set up a viable alternative scheme, they should be able to do so. The principles were written in that way.

Senator WEST --So the trustees could have been left to administer nothing?

Ms Halton --The contract with the trustee said, quite clearly, that we made no guarantees as to volume.

Senator WEST --What was their reasonable expectation?

Ms Halton --Their reasonable expectation would have been that there would have been some millions for investment.

Senator WEST --Are we talking little millions or big millions?

Ms Halton --I would expect that they would have thought it would have been in the tens of millions.

Senator WEST --And this reasonable expectation has now disappeared out the door.

Ms Halton --There is a difference between an expectation and details specified in contracts. The contracts that were set up as part of this arrangement, on advice from the Australian Government Solicitor, and indeed entered into by the trustee, say quite clearly that the government retains the right to vary these arrangements and that there may be very little volume associated with this depending--there are a variety of things and this is not specified--on the arrangements that are entered into in other respects.

Senator WEST --So you do not think that the managers actually have any legal right to contemplate seeking compensation because any reasonable expectation that they might have had has suddenly disappeared?

Ms Halton --The trustees, under the terms of the contract, have an agreement to perform work on demand.

Senator NEAL --Did the Australian Government Solicitor act on advice that the scheme could potentially be changed?

Ms Halton --No, the Australian Government Solicitor acted based on knowledge and experience of operating in a government environment. They always provide prudent advice in that regard.

Senator NEAL --They are a lot smarter than a lot of commentators if they anticipated it could change.

Ms Halton --It is the nature of any contract arrangement.

Senator NEAL --You said that the principles for the new scheme had been drawn up by the minister but that you still had to work out a lot of details of how the scheme would be implemented. Is there any provision in the budget for the development of the new system?

Ms Halton --The principles the minister signed, which have been gazetted, indicate quite clearly that they are to give effect to the announcement that nursing home type residents may not be charged an accommodation bond. That gives effect to that and to the $12 maximum, in order to provide the time for the discussion to occur between consumers and providers. That discussion will talk about some of the additional detail--in relation to the cap, for example, as the secretary mentioned.

There are a number of things that flow from that. Until such time as we work out the precise details with those groups tomorrow, it is probably a little hard to say what flows from it. You mentioned publications earlier; I think the other things apply similarly.

Senator NEAL --But working out what the system is going to look like is going to have a cost. It is not going to cost you nothing. There is going to be a lot of extra work done.

Mr Podger --I expect there will be some extra work, and we will need to have some additional funds provided to cover us for some extra work.

Senator NEAL --What range of funds are we looking at?

Mr Podger --I do not know the amount. As Ms Halton was suggesting, we need a little more clarity about what the detailed changes will be before we can be certain about what sort of system changes or other work we have to do. But I would think there would be some.

Senator NEAL --Some?

Mr Podger --I think we will also need to be talking to Centrelink and Social Security about whether there will be any costs on their side as well. I do not know, but I think we will certainly be talking to them about that possibility.

Senator NEAL --You cannot say; but is it in the range of less than $100,000 or more than $1 million? What sort of money was required to develop the first system of accommodation bonds?

Ms Halton --In terms of the policy work?

Senator NEAL --Yes.

Ms Halton --In essence that was absorbed within the operating costs of my division, plus ancillary work done by a number of other parts of the bureaucracy--Social Security, for example, et cetera. There is not a separately identifiable cost for that activity. The division has an ongoing responsibility for the development of policy and its implementation. That was one of the jobs we did.

Senator NEAL --But it was a major change. It was not just humming along, keeping the motors running.

Mr Podger --We were expecting some changes in our staffing arrangements associated with this, which now may not be able to be made as quickly as had been thought. There could be some extra salary costs for us for a longer time.

Senator NEAL --What sort of change? Losing staff or gaining staff?

Mr Podger --There were to be some reductions coming up, and we may have to look at some delays in some of that. But, as I say, I would rather not speculate at this point. We still have to work our estimates through and raise it with the minister, who will have to raise it with his colleagues. But, I cannot say at this point whether it will be $100,000 or $1 million. Clearly, there are going to be substantial costs on the publicity side. We talked about that before. I do not expect a major cost on the systems side, in that the main systems change has been put in place and will not be affected in any major way by what we have just been talking about.

Ms Halton --Accommodation bonds, no.

Mr Podger --I am talking about our income testing systems arrangements. I do not see any reason why that is going to substantially change. But I do not know whether there will be any other costs in, for example, the suggestion of changes to income test arrangements for rent and so on. I do not know whether that is going to have a cost.

Senator NEAL --Talking about that issue, how many people who are not pensioners have provided their income details to date?

Ms Halton --That is not relevant now, Senator. As you appreciate, income testing for existing residents is not occurring. It is only for new residents from 1 March next year.

Senator NEAL --I know, but I am interested.

Ms Halton --Remember, if you will, Senator, that the large majority of residents in nursing homes--and, indeed, in hostels--are in receipt of a pension, so their income details are already held.

Senator NEAL --I know that. That is why I asked about people who are not on pensions. I asked Social Security the question, and they said I would have to ask you. I am now asking you: for those who are not on pensions, you sent out, seeking information about their income and assets. What proportion of people had responded at the time the answer was made?

Ms Halton --Senator, the reason I pause is that we do not collect income details.

Senator NEAL --Centrelink does.

Ms Halton --Centrelink does.

Mr Podger --Do you want to ask Centrelink?

Senator NEAL --We have been playing this game all day.

Mr Podger --That was one of the reasons we suggested Centrelink might want to be here.

Senator WEST --It is very easy to hide.

Ms Kilpatrick --By our estimate, and this was immediately before the change in policy made it irrelevant, about 10,000 forms had been given to self-funded retirees. Of those, we had about one-quarter back with us--about 2,500.

Senator NEAL --That is a very big percentage. And did that 10,000 include all the self-funded retirees in nursing homes?

Ms Kilpatrick --Yes.

Senator NEAL --That is all of them?

Ms Kilpatrick --That was at a point in time. It did extend back, so it was a bit of a snapshot, but it had a lead time. Most of the forms had been out for about eight weeks at that stage, but some of them had just been given out in the few weeks immediately preceding. At that time they were going out at the rate of about 500 per week. So there were some people who would not have had time to get them back. But, by and large, people had either decided not to send them back or else the return of them was very much delayed.

Senator NEAL --When the letters were sent out, what time period were people allowed to return them within?

Ms Kilpatrick --It was initially to be 28 days. That was doubled to 56 days when we saw how few had actually come back. In fact, we had been talking with Health and Families Services about extending that further because we were doing some follow-up work with some of the homes to make sure that all the people who actually wanted to put forms in did have that opportunity. We were providing assistance if they were having difficulty with filling out the forms or understanding what the questions were.

Senator NEAL --Obviously you had been following up personally with the individuals involved.

Ms Kilpatrick --There were 7,500 of them who had not. We did not get to every one of those 7,500, but the offer was there.

Senator NEAL --When you contacted those who had not returned the form, what proportion of them were having trouble filling it in or understanding it and what proportion were just refusing to?

Ms Kilpatrick --I do not have those figures.

Senator NEAL --I mean just proportions; I do not need exact figures.

Ms Kilpatrick --The anecdotal information that I have from our staff in the network is that it was fairly evenly divided between those who had decided that they were not going to fill in the form at all, for whatever reason--they did not want the government to know what their affairs were; they did not want their personal information in government hands--and those who had passed the forms on to accountants and the accountants were doing something with it, filling them in, but they still had not been received.

Senator NEAL --Those people who had not completed the form would just have to pay the maximum, would they, if they just refused?

Ms Kilpatrick --Back to Health and Family Services.

Ms Halton --In relation to a person who had not provided us with income details, it is important to understand that if a person chose to opt out--and some people opted out because in fact their current charge was in excess of their income tested charge, so there was no need for them to go through that process--they could be charged the income tested fee to the maximum of their subsidy. So, in other words, those people who in fact were in receipt of a very low level of care, particularly those people on income, deliberately did not fill in the form because they did not need to because their charge was already in excess of--for example, under variable fees--what they would have paid under means testing.

Senator NEAL --Just one other quick question: how much did the Coopers and Lybrand consultancy cost?

Ms Halton --We do not have a consultancy with Coopers and Lybrand.

Senator NEAL --Wasn't there a consultancy in order to set up the prudential arrangements?

Ms Halton --There was a consultancy to look at the legal side of setting up the prudential arrangements, yes, but that was not with Coopers and Lybrand.

Senator NEAL --Whom was that with?

Ms Halton --With Oakvale Consulting.

Senator NEAL --How much was that?

Ms Halton --I cannot actually recall the figure off the top of my head.

Senator NEAL --If you could take that on notice.

Ms Halton --Yes.

Senator NEAL --I do not have any more on 5.3. Do you have any?

Senator WEST --I have not started on 5.1 yet.

CHAIR --We will be concluding in 12 minutes.

Senator WEST --I will not be finished in 12 minutes because I have a lot of questions I want to ask on the classification scale. I have some grave concerns about the classification scale from talking to people who are trying to work it.

Senator NEAL --Maybe you could ask the key questions and put the rest on notice.

Senator WEST --Do you think it is flawed?

Ms Halton --The classification scale, unlike all the previous ones we have had, has been tested on 20,000 residents. It does take a different approach to previous classification scales. I think that there are people who have had difficulty making the adjustment to the new sale; but, no, I do not believe it is flawed.

Senator WEST --Did Catherine Rhys-Hearn make some comment in her volume 1 study about some of the methodology?

Ms Halton --Unless you would like to be more specific, Senator--

Senator WEST --I do not actually happen to have it here.

Ms Halton --She made a whole variety of comments about the methodology, all of which were quite pertinent in terms of her recommendations.

Senator WEST --She raised some concerns, did she not?

Ms Halton --No.

Senator WEST --About the costing component?

Ms Halton --No.

Senator WEST --You do not think she did. Are you aware of some work that was commissioned by the New South Wales College of Nursing, Geriaction and the New South Wales Nurses Association? The name of the company involved is LAETA and its principal, Chris Aisbett, has done an analysis of the single instrument for classification. His analysis found significant and fundamental flaws in the research design which underpinned the development of the RCS and the principal finding is that the instrument is not methodologically robust. Do you have any comments?

Ms Halton --I have not seen that piece of work, so I cannot comment on it. In terms of the methodology that underpinned the development of the RCS, there was a very extensive panel of experts who advised on its development. The instrument was validated after its preparation to ensure that it delivered the outcomes that were anticipated both in terms of the classification of individual residents and the distribution of those classifications against the expected classification. That process which was agreed by the steering committee was agreed to ensure that the instrument was robust and did perform as was anticipated. It did perform in that way.

In addition, the minister has agreed--both the former minister and the current minister are continuing with this commitment--that there will be a three-month review of the classification instrument because, as with any science, this is inexact and there is always the possibility that people, for example, may interpret questions in ways that you don't anticipate. There was always a commitment to look at the instrument in operation nationally once it was introduced and to make any necessary refinements if that were so agreed.

Senator WEST --So you don't think the design includes inaccurate weightings and is based on time cost data which could not be verified and are clearly inaccurate?

Ms Halton --The classification weightings were all determined based on a statistical methodology that looked at whether they were predictors of behaviour and, indeed, of the need for care and staff time. You can take all of the methodology but if, at the end of the day, the instrument performs as predicted, which indeed it did do on that test, we would be confident that it does discriminate between residents in the way that it is intended based on the relative need for care.

Senator WEST --So you have no problems with the KAPPA statistics that appear in volume three of Catherine Rhys-Hearn's work where five of them show that the agreement in these questions is poor? They cannot compare another three of them and in something like another eight, they only reach a score of less of 0.5 when the maximum value is one for a complete agreement.

Ms Halton --I reiterate that the technical advice that was provided by the statistical arm of the University of Western Australia was that those values for an instrument of this kind are high not low, because instruments of this kind rarely get statistics of that kind which are above 0.5. As I have indicated, at the end of the day, the real test is whether the instrument performs as anticipated. We have a review in the development stage that suggests that it does. Indeed, the three-month review which I have already mentioned is designed to ensure that if the instrument does not perform as anticipated, there is an opportunity to review it.

Senator WEST --When is the three-month review going to start?

Ms Halton --The three-month review will be an ongoing review basically over the first three months of its operation.

Senator WEST --What form is the review taking?

Ms Halton --Three individuals who have particular technical expertise will not only take a statistical look at the instrument but also look at experience. For example, they will talk to DONs about their experience of using it.

Senator WEST --Who are the three?

Ms Halton --Sandy Cuthbertson has been appointed to head it up.

Senator WEST --Where is Sandy Cuthbertson from?

Ms Halton --The Centre for International Economics.

Senator WEST --What processes did you undertake to select these three?

Ms Halton --I will mention the other two first, and then I will come to that question. The second is Richard Rosewarne. He was involved in the established of the instrument. He understands the background but also has particular expertise in relation to dementia and the care of the elderly.

The third is Ewan Lindsay-Smith, who worked with Dr Rhys-Hearn in the establishment and has particular statistical expertise. The intention was not only to provide a link with the technical expertise both in aged care and the development of the instrument but also an independent oversight of the instrument itself.

Senator WEST --How were the people selected?

Ms Halton --The minister selected the people to do the review.

Senator WEST --So there was no advertising for expressions of interest or anything like that?

Ms Halton --The commitment to do the three-month review of the instrument was given by the previous minister and was continued by this minister. The expectation was always that the group that was established to actually create the instrument would have a role in this review. Indeed, two of those three individuals that I have just mentioned formed that link.

Dr Cuthbertson, who has particular expertise in economic analysis and a capacity to bring an independent scrutiny of this process, was selected by the minister to ensure that there was an independent scrutiny as well as expertise in relation to aged care and the statistical basis of the instrument.

Senator WEST --When does the three-month review start?

Ms Halton --He has been appointed. It is our expectation that they would commence data gathering fairly soon.

Senator WEST --I would like details about how they are going to undertake this review, what criteria are going to be involved and what the consultations are going to be. I have not spoken to a director of nursing in New South Wales of either a hostel or a nursing home--and I have spoken to a significant number now, including people who are professors of gerontology, whatever qualifications they have--who feel that this is an instrument that is nowhere near valid. They are having great difficulties with it. They think it is too wide and open to interpretation.

There is grave concern on the part of the administrators of nursing homes and hostels that the waiting that goes with this is not adequate with the funding. For patients who are end stage dementia, where they are requiring heavy solid nursing care and they are unable to do anything for themselves, the DONs are unable to get them beyond about a category four. If they can get them to category three, they are doing extremely well. They cannot get them to category one or two, which is where they should be. They are finding having to time things very time consuming and not a good method. There is a great deal of disquiet and upset out there that I am having expressed to me.

Ms Halton --It might be useful for us to give you separately a briefing on the instrument and the rationale.

Senator WEST --I think this needs to be on the public record. If you give me a private briefing, I will have difficulties with that. These people need to be able to read about it and need to show it to their colleagues and their peers, because there is a great deal of concern.

Ms Halton --There should be no more requirement for timing activities now than there was under the previous arrangement. To the extent that the previous arrangement included any notion of timing, that has not been expanded. Yes, there is a difference in terms of how people, for example, should be thinking about care planning. We know that there are issues around of people who have used their care plans just as a straight translation into the former instrument. Some people are going to have to reconceptualise those things. There should not be an increase in the workload of staff in dealing with this instrument.

Mr Podger --Can we take on notice about giving you details on the way the review will be managed?

Senator WEST --Yes, please.

Mr Podger --If we provided you with that, that might give you some comfort. I would expect when the review proceeds that some public material will come out of the review also, but let us give you the details of the process on notice.

Senator WEST --I would appreciate that, because I have spoken to quite a number of DoNs from city and country and provincial institutions, from small ones to significant sized ones, and the degree of disquiet, the degree of unhappiness, is very significant.

CHAIR --Senator West, I am sorry to interrupt you yet again--you have already made that comment--but by resolution of the Senate I need to advise you that it is now after 11 o'clock and we are meant to adjourn.

Senator WEST --I did not think it was that strict.

CHAIR --I am trying to establish how long you have to go on that particular program, whether we could go on for a few more minutes to enable you to finish 5.1.

Senator WEST --I have probably got another half hour or so on aged care.

CHAIR --By resolution of the Senate, I do not think we are able to go on that long.

Mr Podger --Madam Chair, I just want to make one very short comment, if I may, just to finish that point off, because I assume we will not come back to that particular point. I understand there are criticisms of this new classification, and that is not entirely surprising. Any change of this sort will lead to criticisms. But as for the criticisms in respect of those who are not in nursing homes but who are caring for dementia patients, who are the main beneficiaries of the classification--maybe the issue is that they do not feel they are getting enough of a benefit--it is true that the new classification for the most part leads to additional moneys for those people.

Senator WEST --There are no complaints about those. The dementia patients who are mobile, who are noisy, who are aggressive and exhibit a lot of those characteristics are pleased with that, but many of those who have had major cerebral vascular accidents or who are end-stage dementias and who have slipped off from being aggressive, noisy or exhibiting bizarre behaviour are just sitting in a bed not able to do anything for themselves, requiring just plain, straight, heavy care and totally incontinent and requiring lots of constant actual care rather than supervision, which is what the noisy, mobile dementias require. There is a greater concern that there is a problem with that particular group.

CHAIR --The sitting of the committee is suspended until Friday morning at 9 a.m.

Committee adjourned at 11.03 p.m.