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Aged Care Amendment Bill 2000

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1998-1999-2000

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AGED CARE AMENDMENT BILL 2000

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Aged Care,

the Hon. Bronwyn Bishop, MP)

 



AGED CARE AMENDMENT BILL 2000

 

 

 

OUTLINE

 

 

This Bill amends the Aged Care Act 1997 (the Act) to bring about further reforms in aged care. 

 

This Bill gives more powers to the Department of Health and Aged Care (through the Secretary to the Department and his or her delegates) over providers who cannot or will not comply with the Act.

 

This Bill enables notice to be given to residents and relatives where the approved provider of a residential aged care service faces withdrawal of approved provider status, revocation of places and evacuation of residents.

 

The Bill also enables action to require the removal of key personnel of the approved provider of a residential aged care service, being the corporate entity, where key personnel of that entity have been convicted of an indictable offence, are of unsound mind or become bankrupt.

 

 

 

 

 

FINANCIAL IMPACT

 

 

There is no financial impact.  



 

NOTES ON CLAUSES

 

 

CLAUSE 1 - SHORT TITLE

 

This Clause provides that this Bill may be cited as the Aged Care Amendment Act 2000 .

 

CLAUSE 2 - COMMENCEMENT

 

Sub-clause (1) provides that, subject to the clause, this Act commences on the day after the day it receives the Royal Assent.  This includes the items listed in Schedule 1.

 

Sub-clause (2) provides that Schedule 2 commences on the 28 th day after the day the Act receives the Royal Assent.  The delay in Schedule 2 commencing will allow for consultation with the aged care industry.

 

CLAUSE 3 - SCHEDULES

 

This Clause provides that each Act specified in the Schedules to this Act is amended or repealed as set out in the applicable items in the Schedules, and that any other item in a Schedule has effect according to its terms.  Both Schedules, however, only amend the Aged Care Act 1997 .



 

SCHEDULES - AGED CARE ACT 1997

 

 

SUMMARY

 

The Schedules amend the Aged Care Act 1997 to give more powers to the Department of Health and Aged Care (through the Secretary to the Department and his or her delegates) over providers who cannot or will not comply with the Act.

 

SCHEDULE 1 makes amendments relating to the imposition of sanctions.  It enables notice to be given to residents and relatives where the approved provider of a residential aged care service faces withdrawal of approved provider status, revocation of places and evacuation of residents.

 

SCHEDULE 2 makes amendments relating to key personnel of approved providers.  It enables action to require the removal of key personnel of the approved provider of a residential aged care service, being the corporate entity, where key personnel of that entity have been convicted of an indictable offence, are of unsound mind or become bankrupt.

 

 

 

SCHEDULE 1

 

ITEM 1

 

This Item adds a consequential amendment to section 42-2 to make a cross-reference to the provisions in Item 7 (concerning section 67A-5).  The effect of the cross-reference is to exempt periods of a care recipient’s allowable leave from a residential aged care service from the description of ‘vacant’ and ‘occupied’ places for the purposes of progressive application of sanctions.

 

ITEM 2

 

This Item amends the introductory words to section 66-1 to make clear that the way the Secretary gives written notice to an approved provider of his or her decision to impose a sanction is by following the provisions of section 67-5.

 

ITEM 3

 

This Item corrects a typographical error by removing the unintentional duplication of the words “approval under Part 2.1” from the paragraph.

 



ITEM 4

 

This Item clarifies that the sanction that can be imposed under the paragraph, i.e. restricting an approved provider’s approval to the services conducted by that provider, applies in relation to services being conducted at the time the sanction notice is given to the provider, rather than, for example, at the moment of the decision, or from a time deferred beyond the time the sanction notice is given (in line with the amendment proposed in Item 7 below).

 

ITEM 5

 

This Item clarifies that the sanction that can be imposed under the paragraph, i.e. restricting an approved provider’s approval to certain care recipients, applies in relation to care recipients being cared for at the time the sanction notice is given to the provider, rather than, for example, at the moment of the decision, or from a time deferred beyond the time the sanction notice is given (in line with the amendment proposed in Item 7 below).

 

ITEM 6

 

This Item adds to subsection 67-5(2) two matters that must be set out in a sanction notice given under the section. The first (paragraph 67-5(2)(ca)) is the number of allocated places which are to be the subject of a revocation or suspension under paragraph 66-1(d).  The second (paragraph 67-5(2)(cb)) is an explanation of when the sanction takes effect, for example making clear to the approved provider whether the sanction commences at the time the sanction notice is given or at a later time or times.

 

ITEM 7

 

This Item adds an additional division, Division 67A, dealing with when sanctions take effect. 

 

Clause 67A-1 makes clear that the Division applies if the Secretary actually gives a sanction notice to an approved provider under section 67-5. 

 

Clause 67A-2 allows for sanctions to start when the sanction notice is actually given to the approved provider.  This is described as ‘the basic rule’ for the purposes of the clause. It is not expected that the decision-maker will identify in the sanction notice the hour and minute from which the sanction takes effect, as that time will depend on when the sanction notice is actually given to the approved provider and so cannot be predicted precisely at the time of completing the notice.

 

Clause 67A-3 allows for two exceptions to the basic rule, namely for the effect of certain sanctions to be deferred, or to be applied progressively.

 

Clause 67A-4 deals with deferral of sanctions, i.e. sanctions where the start time is later than the time the sanction notice is given to the approved provider.  This amendment enables, for example, notice to be given to residents and their relatives where, because of the sanctions, the approved provider of a residential aged care service faces withdrawal of approved provider status, revocation of places and evacuation of residents.

 

Sub-clause (1) makes clear that a deferred sanction starts at such later time as the Secretary decides.  The Secretary is obliged by the amendment in Item 6 (paragraph 67-5(2)(cb)) to explain in the sanction notice what time this is.

 

Sub-clause (2) sets out a defined list of the matters the Secretary is to have regard to when deciding whether to defer the commencement of a sanction. It anticipates (in paragraph (a)) the potential appropriateness for residents of the affected aged care service, and certain other individuals, to be given notice of the deferred commencement of the sanction and its consequences.  It is intended that such notice could potentially be given to a person who is the resident’s next of kin or to another individual concerned for the resident’s safety, health and well-being.  Without limiting the latter class, that other individual could, for example, include a family member, a close friend or a person with power of attorney, guardianship or another formal right of representation for the resident.  However, the Secretary is not required to give notice to any person.

 

Paragraph (b) requires the Secretary to have regard to any risk that there may be to the safety, health or well-being of relevant affected care recipients if the sanction is deferred.  It is expected that the greater the risk, the shorter the time allowed for deferral will be.

 

Paragraph (c) allows for further matters to which the Secretary is to have regard to be set out in the Sanctions Principles.

 

Sub-clause (3) limits the period of deferral in one particular situation to 14 days after the time the sanction notice is given.  The particular situation is where the Secretary decides, as the only sanction, to revoke an approved provider’s approval as a provider (but not where that revocation is made subject to any of the options referred to in subsection 66-2(1)(a)—e.g. agreement to appoint an approved adviser or administrator).

 

Clause 67A-5 deals with progressive application of sanctions.

 

Sub-clause (1) makes clear that this option for progressive application may only be used when the Secretary decides to revoke or suspend some or all an approved provider’s allocated places (this sanction action is referred to in paragraph 66-1(d)).  The Secretary must have regard to the matters, if any, specified in the Sanctions Principles for the purposes of this clause (see sub-clause (6)).

 

Sub-clause (2) describes an allocated place as ‘vacant’ if no person is receiving aged care from the approved provider in respect of that allocated place immediately before the sanction notice is given to the provider.  The sub-clause goes on to provide that, when progressive revocation or suspension is being applied, the allocation of vacant places is revoked or suspended when the sanction notice is given.  Progressive revocation or suspension cannot be applied where the number of vacant allocated places equals or exceeds the total number of places to be revoked or suspended (see sub-clause (5)).

 

Sub-clause (3) describes an allocated place as ‘occupied’ if a person is receiving aged care from the approved provider in respect of that place immediately before the sanction notice is given to the provider.  The sub-clause goes on to provide that, when progressive revocation or suspension is being applied, the allocation of occupied places is revoked or suspended as the places are vacated.

 

Sub-clause (4) indicates that the progressive revocation or suspension of allocated places stops (in relation to the number of places, not the duration of the suspension) once the total number of vacant and occupied places revoked or suspended reaches the number specified in the sanction notice (see Item 6 above in relation to paragraph 67-5(2)(ca)).

Example of the operation of section 67A-5

A provider has 50 places allocated to it at the time the sanction notice is to be given, and the Secretary intends to suspend 5 of those places, each for a period of 12 months. This might lead to a chronology such as:

1 February 2001           sanction imposed - all but 2 places occupied - those 2 vacant places suspended until 1 February 2002

20 February 2001         a resident dies - place suspended until 20 February 2002

3 March 2001               a resident moves - place suspended until 3 March 2002

11 April 2001                a resident dies - place suspended until 11 April 2002

2 May 2001                   a resident moves - the provider may fill this (6 th ) and subsequent places as they became vacant.

 

Clause 67A-6 makes clear that this Division has effect subject to the operation of section 66-2. That section allows for the Secretary to specify that a sanction of revocation of a provider’s approval under Part 2.1 does not take effect in certain situations.

 

ITEM 8

 

This Item adds an additional subsection to section 68-2 to make it clear that the sanction period set out in a sanction notice must refer to the time at which the sanction will take effect. If there is no deferral, it is not expected that the decision-maker will identify in the sanction notice the hour and minute from which the sanction takes effect, as that time will depend on when the sanction notice is actually given to the approved provider and so cannot be predicted precisely at the time of completing the notice.  It is intended to be sufficient for the notice to be couched in terms such as “This sanction takes effect from the time it is given to you. The sanction period is 12 months from the time the sanction takes effect.”

 

Similarly, if there is to be a progressive application of the sanction, and there are no vacant places at the section 67-5 notice time, it is not expected that the decision-maker will identify in the sanction notice the hour and minute from which the sanction takes effect, as that time will depend on when an occupied place is first vacated after the sanction notice is given to the approved provider and so cannot be predicted precisely at the time of completing the notice.

 

If the sanction is to be deferred (in accordance with the provisions of Division 67A described in Item 7 above), the starting time should be set out in the notice.

 

ITEM 9

 

This Item inserts a definition of ‘section 67-5 notice time’ in the Dictionary.  The new definition is important for determining the basic rule about the time from which certain sanctions take effect (in accordance with the provisions of Division 67A described in Item 7 above).

 

ITEM 10

 

This Item makes clear that the amendments made by this Schedule to Part 4.4 of the Act (that is, the amendments relating to the giving of sanction notices and to deferred or progressive application of sanctions) apply to sanctions for which a sanction notice is given after the commencement of this Item.  For example the amendments apply even if the non-compliance that leads to the sanction being imposed occurred, or if notices under sections 67-2, 67-3 or 67-4 were given, before this Item commences.

 

 

SCHEDULE 2

 

ITEM 1

 

This Item adds a cross-reference in section 3-4 to an additional responsibility that is placed on approved providers under Chapter 4 by the amendment in Item 14 (relating to accountability for the basic suitability of the approved provider’s key personnel). 

 

Failure to meet such responsibilities can lead to the imposition of sanctions.

 

ITEM 2

 

This Item adds another requirement, namely for the Secretary to be satisfied that none of the applicant’s key personnel is a disqualified individual, to existing requirements.  The satisfaction of all these requirements means that the Secretary is obliged to approve a person as a provider of aged care.

 

ITEM 3

 

This Item omits the existing definition of ‘key personnel’ and substitutes a new definition of that term which is set out in Item 16.  The new definition of key personnel is a split definition, having two meanings depending on whether term is used in relation to an applicant for approved provider status or an approved provider.

 



ITEM 4

 

This Item omits the existing definition of ‘key personnel’ and substitutes the new definition of that term which is set out in Item 16.  The new definition of key personnel is a split definition, having two meanings depending on whether term is used in relation to an applicant for approved provider status or an approved provider.

 

ITEM 5

 

This Item omits the references to paragraph 8-3(1)(a) and subsection 8-3(2) in subsection

8-3(3) because these references are no longer necessary due to the split definition of key personnel which is set out in Item 16.

 

ITEM 6

 

This Item adds an additional subsection to section 8-3 to make clear that a number of additional provisions do not limit the operation of section 8-3.  These additional requirements are found in Item 2 (for the Secretary to be satisfied that none of the applicant’s key personnel is a disqualified individual), Item 10 (in clause 10A-2: a disqualified individual must not be one of the key personnel of an approved provider; and clause 10A-3: Remedial Orders) and in Item 14 (obliging approved providers to take all reasonable steps to ensure that none of their key personnel is a disqualified individual).  In this respect, the Secretary must still consider a range of matters in satisfying himself or herself that an applicant is suitable to provide aged care.

 

ITEM 7

 

This Item omits the existing definition of ‘key personnel’ and substitutes the new definition of that term which is set out in Item 16.  The new definition of that term is a split definition, having two meanings depending on whether term is used in relation to an applicant for approved provider status or an approved provider.

 

ITEM 8

 

This Item omits the reference to paragraph 9-1(1)(b) in subsection 9-1(2) because it is no longer necessary due to the split definition of key personnel which is set out in Item 16.

 

ITEM 9

 

This Item alters the existing obligation under subsection 9-1(1) for an approved provider to notify the Secretary where certain changes occur relating to the approved provider’s suitability or key personnel.  In circumstances where there is a change of any of the approved provider’s key personnel and that change is wholly or partly attributable to the particular person being or about to become a disqualified individual, the approved provider it taken not to notify the change unless the approved provider’s notification includes the reason why the person is, or is about to become, a disqualified person.

 

ITEM 10

 

This Item adds a new Division, Division 10A concerning disqualified individuals.

 

Sub-clause 10A-1(1) provides that an individual is a ‘disqualified individual’ if any one or more of the following states applies to the individual: he or she has been convicted of an indictable offence, is an insolvent under administration or is of unsound mind.

 

Sub-clause 10A-1(2) defines an ‘indictable offence’ as an offence against a Commonwealth, State or Territory law; or an offence against a law of a foreign country or of a part of a foreign country that, when committed, corresponds to an indictable offence against a Commonwealth, State of Territory law. The intention behind the latter part of the definition is to exclude foreign offences that do not have Australian equivalents at the time the foreign offence was committed; for example offences that might be characterised as “political” offences or other offences committed overseas that have no equivalent in this country.

 

Sub-clause 10A-1(2) also defines ‘insolvent under administration’.  The term is defined as having the same meaning as in the Superannuation Industry (Supervision) Act 1993 and applies to a person who is an undischarged bankrupt under the Bankruptcy Act 1966 or the law of an external Territory; or has the status of such a person under the law of a country other than Australia or the law of an external Territory; as well as including other arrangements described in that legislation.  These other arrangements apply either where there is a relevant corresponding provision of an external Territory or foreign law, or to a person:

 

(i)                  any of whose property is subject to control under section 50 or 188 of the Bankruptcy Act;

(ii)                who has, at any time during the preceding 3 years, executed a deed of assignment or arrangement under Part X of the Bankruptcy Act;

(iii)              whose creditors have, within the preceding 3 years, accepted a composition under Part X of the Bankruptcy Act.

 

Linking this definition to the Superannuation Industry (Supervision) Act means that, when that Act is amended, the amendments will apply automatically to the Aged Care Act without the need for consequential amendment.

 

Sub-clause 10A-1(3) indicates that an individual’s conviction for an indictable offence, whether it occurred prior to, at or after the commencement of this clause, makes such an individual a disqualified individual. These pre-commencement offences are included because of the concern that such individuals pose a risk to frail, often vulnerable, aged care recipients while they remain key personnel, particularly where they have direct responsibility (executive, management, overall nursing or day-to-day responsibility) for the care of those care recipients.

 

Sub-clause 10A-1(4) provides that, for purposes of the section, an individual who is one of the key personnel of an applicant for approval as a provider of aged care under section 8-2 is taken to be of unsound mind in only one instance, namely when that individual is mentally incapable of performing his or her duties as one of those key personnel.  Key personnel of an applicant for approval as a provider of aged care include those people who have, or are likely to have, responsibility for the care of aged care recipients in terms of executive, management, overall nursing or day-to-day operational responsibility. While not wishing to unduly differentiate between persons of sound and unsound mind, it is considered imperative that aged care recipients are not placed at risk because of the potential actions (or omissions) of an approved provider’s key personnel who are incapable of performing their duties.

 

Sub-clause 10A-1(5) provides that, for the purposes of the section, an individual who is one of the key personnel of an approved provider is taken to be of unsound mind in only one instance; when that individual is mentally incapable of performing his or her duties as one of those key personnel.  Key personnel of an approved provider of aged care include those people with responsibility for the care of aged care recipients in terms of executive, management, overall nursing or day-to-day operational responsibility.  While not wishing to unduly differentiate between persons of sound or unsound mind, it is considered imperative that aged care recipients are not placed at risk because of the actions (or omissions) of an approved provider’s key personnel who are incapable of performing their duties.

 

Sub-clause 10A-1(6) provides that the section does not affect the operation of Part VIIC of the Crimes Act 1914 .  This Act includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them.  For example, Division 3 of Part VIIC of the Crimes Act establishes a scheme whereby, relevantly, a conviction for a Commonwealth or Territory offence does not have to be disclosed to any person in any State or Territory if:

 

(i)                  the person was not sentenced to imprisonment for the offence, or was not sentenced for more than 30 months; and

(ii)                a prescribed period of time has elapsed since the conviction (five years where the offence was committed by a minor; ten years in all other cases); and

(iii)              no further offences have been committed during the prescribed period referred to in (ii) above.

 

Sub-clause 10A-2(1) provides that a corporation is guilty of an offence if it is an approved provider and a disqualified individual is one of the corporation’s key personnel, and the corporation is reckless as to the fact. 

 

This offence carries a penalty of 300 penalty units (currently $33,000). 

 

The note below this penalty indicates that Chapter 2 of the Criminal Code sets out general principles of criminal responsibility. Under subsection 5.4(1) of the Criminal Code, a person is reckless with respect to a circumstance if he or she is aware of a substantial risk that the circumstance exists or will exist; and having regard to the circumstance known to him or her, it is unjustifiable to take the risk.  In relation to this sub-clause, the circumstance is a disqualified person being one of the corporation’s key personnel.  According to subsection 5.4(3) of the Criminal Code, the question whether taking a risk is unjustifiable is one of fact.  Further, according to subsection 5.4(4) of the Criminal Code, if recklessness is a fault element for a physical element of an offence (which it is in respect to the offence under sub-clause 10A-2(1)), proof of intention, knowledge or recklessness will satisfy that fault element.

 

Sub-clause 10A-2(2) provides that a corporation that contravenes sub-clause (1) is guilty of a separate offence in respect of each day (including a day of a conviction for the offence or any later day) during which the contravention continues.  This provision emphasises the seriousness with which continuing breaches on the part of the approved provider are viewed.  As this is an offence applicable only to a corporation, subsection 4B(3) of the Crimes Act 1914 does not apply to it.  Accordingly, the 300 penalty unit maximum penalty factors in the corporate multiplier referred to in that section.

 

Sub-clause 10A-2(3) provides that an individual is guilty of an offence if three criteria are met: the individual is one of the key personnel of the approved provider; the approved provider is a corporation; the individual is a disqualified individual, and the individual is reckless to that fact.

 

This offence carries a penalty of imprisonment for 2 years.  The note below indicates that Chapter 2 of the Criminal Code sets out general principles of criminal responsibility.  Under subsection 7.3(1) of the Criminal Code, a person is not criminally responsible for an offence if, at the time of carrying out the conduct constituting the offence, the person was suffering from a mental impairment (a term that includes senility, intellectual disability, mental illness, brain damage and severe personality disorder) that had the effect that the person:

 

(a)                 did not know the nature and quality of the conduct; or

(b)                did not know that the conduct was wrong (that is, the person could not reason with a moderate degree of sense and composure about whether the conduct, as perceived by reasonable people, was wrong); or

(c)                 was unable to control the conduct.

 

An individual who is a disqualified individual because of unsound mind might not be guilty of the offence in sub-clause 10A-2(3) if, based on the relevant provisions of the Criminal Code (including those above), he or she is also suffering from a mental impairment and therefore cannot be criminally responsible for the offence.

 

Sub-clause 10A-2(4) provides that an act of a disqualified individual or corporation is not invalidated by the fact that this section is contravened. An approved provider can therefore rely on the operation of this sub-clause so that acts performed by such a person, including those involving executive, management, overall nursing or day-to-day operational decisions, are not invalidated.

 

Clause 10A-3 deals with remedial orders.  The intention of this clause is to enable quick and effective action to be taken if an ‘unacceptable key personnel situation’ exists, particularly so that the risk of such a situation to frail and often vulnerable aged care recipients is removed or otherwise addressed.

 

Sub-clause 10A-3(1) provides that, for the purposes of the clause, an unacceptable key personnel situation exists where 3 circumstances are satisfied:

(a)                 an individual is one of the key personnel of an approved provider;

(b)                the approved provider is a corporation;

(c)                 the individual is a disqualified individual.

 

Sub-clause 10A-3(2) provides that, if an unacceptable key personnel situation exists, the Federal Court of Australia, on the application of the Secretary, is able to make such orders as the court considers appropriate for the purposes of ensuring that that situation ceases to exist.

 

Sub-clause 10A-3(3) provides for additional Federal Court powers; namely the power, for the purpose of securing compliance with any other order under the clause, to make an order directing any person to do or to refrain from doing a specified act; and to make an order containing such ancillary or consequential provisions as the court thinks fit.

 

Subsection 10A-3(4) provides for the power for the Federal Court, on application and before considering that application, to grant an interim order directing any person to do or to refrain from doing a specified act.

 

Subsection 10A-3(5) provides that the Federal Court may, before making an order under this clause, direct that notice of the application be given to such persons, or published in such a manner as it thinks fit, or both.

 

Subsection 10A-3(6) provides that the Federal Court may, by order, rescind, vary or discharge an order made by it under this clause or suspend the operation of such an order.

 

Subsection 10A-3(7) provides that the ‘Federal Court’ means the Federal Court of Australia.

 

With respect to information provided to, or by, the Federal Court for the purposes of this clause, it is intended that the clause operates to bring such a provision of information within the operation of paragraph 86-2(2)(a) of the Act.  That paragraph provides that it is not an offence to use protected information in the performance of a function or duty under the Act or the exercise of a power under, or in relation to, the Act.

 

ITEM 11

 

This Item inserts an extra phrase to the third dot point in the boxed note in section 53-1 to indicate that approved providers’ responsibilities in relation to aged care they provide through their aged care services relate, amongst other matters, to the basic suitability of their key personnel.

 

ITEM 12

 

This Item repeals the heading and substitutes a new heading.

 

ITEM 13

 

This Item repeals the heading to Part 4.3 and substitutes a new one taking into account the expanded approved provider responsibility referred to in Item 14.

 



ITEM 14

 

This Item inserts a new clause, clause 63-1A, which indicates that it is an approved provider’s responsibility, in relation to the basic suitability of its key personnel, to comply with the requirement to take all reasonable steps to ensure that none of those key personnel is a disqualified individual.

 

ITEM 15

 

This Item inserts a signpost definition of ‘disqualified individual’ in the Dictionary in Clause 1 of Schedule 1.

 

ITEM 16

 

This Item inserts a definition of ‘key personnel’ in the Dictionary.  The new definition is a split definition, having two meanings depending on whether term is used in relation to an applicant for approved provider status or an approved provider.  It is clear that the definition of ‘key personnel’, on the basis of either of the two definitions referred to in this item, includes a director of corporation.