Title Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021
Database Bills Digests
Date 23-11-2021
Source Bills Digest Service
Parl No. 46
Author STOREN, Rebecca
TOMARAS, Juli Effi
Citation Id 8291844
Key item No
Major subject Aged care
Aged Care Quality and Safety Commission
Codes of conduct
Government regulation
Subsidies
Residential care
Government expenditure
Respite care
Minor subject Bills
Legislative amendments
Prices and charges
Royal Commission into Aged Care Quality and Safety
Standards
Service delivery
Workforce planning
Repeal of legislation
Legislative instruments
Pages 64p.
Volume no. 035 (2021-22)
System Id legislation/billsdgs/8291844


Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021

ISSN 1328-8091

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BILLS DIGEST NO. 35, 2021–22 23 NOVEMBER 2021

Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 Rebecca Storen Social Policy Section Juli Tomaras Law and Bills Digest Section

Contents

The Bills Digest at a glance .............................................. 4

Purpose of the Bill ........................................................... 5

Structure of the Bill ......................................................... 5

Commencement details................................................... 6

Background ..................................................................... 6

Overview of Residential aged care – care and respite funding ............................................................ 7

Workforce screening and regulation .......................... 7

Overview of incident management............................. 8

Overview of key governance arrangements ............... 8 Overview of information sharing and regulatory alignment .................................................................... 9

Overview of prudential responsibilities - refundable deposits and accommodation bonds ....... 9 Overview of independent pricing for aged care ....... 10 Committee consideration .............................................. 11

Senate Community Affairs Legislation Committee ... 11 Senate Standing Committee for the Scrutiny of Bills ............................................................................ 11

Policy position of non-government parties/independents.................................................... 13

Australian Labor Party ............................................... 13

Centre Alliance .......................................................... 14

Independents ............................................................ 14

Position of major interest groups................................... 15

Comments specifically relating to the Bill ................. 15

Date introduced: 1 September 2021

House: House of Representatives

Portfolio: Health

Commencement: See details under the subheading ‘Commencement details’ in this Digest.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at November 2021.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 2

Select comments on the related but broader aged care reforms ..................................................... 18

Financial implications .................................................... 19

Statement of Compatibility with Human Rights.............. 19

Parliamentary Joint Committee on Human Rights ... 19 Key issues and provisions .............................................. 19

Residential aged care assessment and basic subsidy (Schedule 1) .................................................. 19

Screening of workers and governing persons (Schedule 2) ............................................................... 26

Code of Conduct (Schedule 3) ................................... 29

Incident management and reporting (Schedule 4) ... 32 Governance of approved providers (Schedule 5) ..... 34 Information sharing (Schedule 6) .............................. 38

Use of refundable deposits and accommodation bonds (Schedule 7) .................................................... 44

Independent Health and Aged Care Pricing Authority (Schedule 8) .............................................. 50

Part 1—Amendment of the National Health Reform Act 2011 ....................................................... 51

Delegation by the Pricing Authority .......................... 56

Annual Report ........................................................... 59

Pricing Authority may assist the Aged Care Advisory Committee and its subcommittees ............ 59 Requirements for functions in relation to health care pricing and costing ............................................ 60

Requirements for functions in relation to aged care ............................................................................ 61

Restrictive practices (Schedule 9) .................................. 62

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 3

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 4

The Bills Digest at a glance In 2019–20, it was estimated that the aged care sector provided services to over 1.3 million care recipients, with the Australian Government spending approximately $21.2 billion, with the majority of this expenditure being for residential care at 63 per cent or $13.4 billion.1

The aged care sector has been subject to a large number of reviews and inquiries since the introduction of the Aged Care Act 1997, with reforms being introduced by successive governments. Many of these reviews identified and made suggestions to address reoccurring issues.2 The Royal Commission into Aged Care Quality and Safety (Royal Commission) was established in 2018 and was required and authorised to inquire into seven broad areas, with a particular focus on safety and quality.3 In its Interim Report, the Royal Commission stated:

… the system designed to care for older Australians is woefully inadequate. Many people receiving aged care services have their basic human rights denied. Their dignity is not respected and their identity is ignored. It most certainly is not a full life. It is a shocking tale of neglect.4

The Commissioners presented the Final Report to the Governor-General on 26 February 2021. Over the course of the 28 months of work, the Royal Commission held 23 public hearings involving 641 witnesses, and received over 10,500 public submissions. The Final Report was released by the Government alongside its initial response on 1 March 2021.5

The 2021–22 Budget provides the Australian Government’s response to the Royal Commission and a generational plan for aged care in Australia. The Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 (the Bill), is the second Bill introduced by the Government in response to the Royal Commission’s Final Report and primarily seeks to introduce:

• a new basic subsidy model in residential aged care

• elements of a registration system for the aged care workforce

• incident management requirements into the home and flexible care settings

• enhanced approved provider governance

• improvements for information sharing across government entities and

• independent pricing arrangements for aged care.

The Government introduced amendments to the Bill in the House of Representatives, which propose an additional schedule that will address issues that have arisen with the recently introduced changes to requirements relating to restrictive practices.6 This Bill forms part of the Government’s response to the Royal Commission and, whilst outside the scope of this Digest, it is anticipated that a new Aged Care Act will commence from 1 July 2023.7

1. Aged Care Financing Authority (ACFA), Ninth report on the Funding and Financing of the Aged Care Sector, ACFA, Canberra, June 2021, pp. 3–5. 2. Royal Commission into Aged Care Quality and Safety (Royal Commission), A history of aged care reviews, Background paper, 8, Royal Commission, Adelaide, 2019, p. 1. 3. Royal Commission, ‘Terms of Reference’, Royal Commission website, updated 6 December 2018. 4. Royal Commission, Interim Report: Neglect, Volume 1, Royal Commission, Adelaide, 2019, p. 12. 5. R Storen, Final Report of the Royal Commission into Aged Care Quality and Safety: a quick guide, Research paper series, 2020–

21, Parliamentary Library, Canberra, 10 March 2021. 6. Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, Government amendment, sheet ZB120, House of Representatives, 25 October 2021. 7. DoH, Australian Government Response to the Final Report of the Royal Commission into Aged Care Quality and Safety, DoH,

Canberra, 2021, p. 1.

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Purpose of the Bill The purpose of the Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 (the Bill) is to:

• introduce new funding arrangements for residential aged care

• establish an Aged Care Screening Database for aged care workers and governing persons

• provide the Aged Care Quality and Safety Commissioner (the Commissioner) with the authority to make and enforce a Code of Conduct

• extend the Serious Incident Response Scheme (SIRS) to home and flexible care

• amend and expand approved provider governance, with a focus on financial and prudential oversight

• improve information sharing between Commonwealth bodies

• expand the function of the Independent Hospital Pricing Authority (IHPA), which would be renamed as the Independent Health and Aged Care Pricing Authority (Independent Pricing Authority).

To achieve the proposed changes, the Bill amends several Acts (as outlined below) and makes provision for changes to subordinate legislation:

• Aged Care Act 1997 (the Act)

• Aged Care (Transitional Provisions) Act 1997 (the Transitional Act)

• Aged Care Quality and Safety Commission Act 2018 (the ACQSC Act)

• Military Rehabilitation and Compensation Act 2004 (the Military Rehabilitation Act)

• Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (the Defence-related Claims Act)

• Veterans’ Entitlements Act 1986

• National Health Reform Act 2011 (the Health Reform Act).

Structure of the Bill The Bill is comprised of eight schedules (with a ninth schedule on restrictive practice introduced in the Government’s proposed amendments to the Bill):

• Schedule 1 enables the introduction of a new residential aged care basic subsidy calculation model from 1 October 2022, and related changes to residential respite care.

• Schedule 2 provides the Aged Care Quality and Safety Commission (Safety Commission) with the authority to establish a national screening database for aged care workers, and governing persons, of approved providers. This change would replace the existing police checking obligations.

• Schedule 3 provides the Safety Commission with the power to introduce and enforce a Code of Conduct, which will apply to approved providers and their staff.

• Schedule 4 extends the SIRS to include home care and flexible care delivered in the home and community setting from 1 July 2022.

• Schedule 5 introduces new governance responsibilities for approved providers from 1 March 2022, including the establishment of new advisory bodies, publicly available annual statements on their operations and the reintroduction of some requirements for key personnel.

• Schedule 6 enhances the information sharing ability on non-compliance of providers and their workers between Commonwealth bodies in the aged care, veterans’ affairs and disability

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 6

sectors, as well as relevant regulators from the health sector (for example, the Australian Health Practitioner Regulation Agency).

• Schedule 7 provides the Secretary and Safety Commissioner the power to request information or documents from an approved provider or borrower of a loan made using a refundable accommodation deposit or bond. In addition, it creates an offence if the borrower does not comply.

• Schedule 8 expands and renames the Independent Hospital Pricing Authority (IHPA) to the Independent Health and Aged Care Pricing Authority (Pricing Authority) and includes the provision of advice on aged care pricing and costing matters within its remit. The amendments also establish new governance arrangements and appointment processes for the Pricing Authority, including functions that are currently undertaken by the Aged Care Pricing Commissioner. In addition to advice and the performance of certain functions outlined in the Health Reform Act, the amendments provide for the Minister or the Secretary to request advice on certain health care pricing and costing matters.

• Schedule 9 will modify the recent changes to the use of restrictive practices, which commenced on 1 July 2021. It primarily seeks to address the unintended consequences which may conflict with existing state and territory guardianship and consent laws.

A brief overview of Schedules 1–8 is provided in the Explanatory Memorandum to the Bill.8 An overview of proposed Schedule 9 is provided in the Supplementary Explanatory Memorandum.9

Commencement details • Sections 1 to 3 commence on Royal Assent

• Schedule 1 commences on 1 October 2022

• Schedule 2 commences on the earlier of Proclamation or 12 months after Royal Assent

• Schedules 3, 4 (Part 1) and 7 commence on 1 July 2022

• Schedules 4 (Part 2) and 6 commence the day after Royal Assent

• Schedule 5 commences on 1 March 2022

• Schedule 8 commences on the 28th day after Royal Assent

• Proposed Schedule 9 commences the day after Royal Assent.

Background The aged care system caters for older Australians who can no longer live without support in their own home. Care is provided in people’s homes, in the community and in residential aged care facilities by a wide variety of providers. The Australian Government is the primary funder and regulator of the aged care system.10 Government expenditure on aged care services, largely by the Australian Government, was $21.2 billion in 2019–20.11

The Aged Care Act 1997 (the Act) and the associated Aged Care Principles set out the legislative framework for the funding and regulation of aged care, although services are also provided

8. Explanatory Memorandum, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, pp. 1-3. 9. Supplementary Explanatory Memorandum, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, p. 4. 10. R Storen, Aged care: a quick guide, Research paper series, 2020–21, Parliamentary Library, Canberra, updated 30 April 2021,

p. 1.

11. ACFA, Ninth Report on the Funding and Financing of the Aged Care Sector, op. cit., p. 6.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 7

through contractual arrangements outside of the Act. The Australian Government Department of Health is responsible for the operation of the Act.12

This section briefly summarises elements of aged care policy relevant to the Bill with a more detailed background available in the Appendix at the end of the Digest.

Overview of Residential aged care – care and respite funding To access Government subsidised aged care, a person will initially undertake a screening process with My Aged Care, who can refer people for an assessment to determine their care needs and service eligibility. There are two different types of assessment – a home support assessment, which is undertaken by a Regional Assessment Service (RAS), and a more comprehensive assessment conducted by an Aged Care Assessment Team (ACAT) (also known as Aged Care Assessment Services (ACAS) in Victoria).13

Residential aged care is funded by both the Australian Government and contributions from care recipients. The Government pays subsidies and supplements to approved providers (providers) for each resident. The majority of this payment is the basic care subsidy, which is calculated using the Aged Care Funding Instrument (ACFI). The ACFI is a tool providers use to claim care subsidy for each resident in permanent residential aged care.14 The Government is trialling a new residential aged care funding tool to potentially replace the ACFI called the Australian National Aged Care Classification (AN-ACC). From April 2021, the Department of Health commenced a 12 month ‘shadow assessment’ period, which requires everyone living in residential aged care (excluding people receiving palliative care) to be assessed under the AN-ACC by one of six independent assessment management organisations.15 ACFI continues to operate during the shadow assessment period.16

Residents also pay costs and fees which contribute to the cost of their care and accommodation. All residents can be asked to pay a basic daily fee set at 85 per cent of the single basic age pension. Some residents also pay a means-tested care fee based on an assessment of their income and assets. Some residents will have their accommodation costs met in full or in part by the Australian Government, but those with greater means are required to pay an accommodation price (formerly known as a bond) as agreed with the residential aged care service.17

Different arrangements are in place for people who entered care before 1 July 2014 and did not opt-in to the post-1 July 2014 arrangements introduced under the Living Longer. Living Better. reforms. Specific arrangements for this group, known as continuing care recipients, are provided under the Aged Care (Transitional Provisions) Act 1997.

Workforce screening and regulation Workforce screening and regulation has been discussed for some time in aged care. The Appendix provides information on five different reports and activities which explore workforce screening and regulation in different ways before briefly considering examples from the health and disability sectors.

12. R Storen, Aged care: a quick guide, op. cit. 13. R Storen, ‘Aged care: access, and care and support in the home’, Budget Review 2021–22, Research paper, 2020–21, Parliamentary Library, Canberra, May 2021. 14. DoH, ‘The Aged Care Funding Instrument (ACFI)’, DoH website, accessed 17 September 2021. 15. DoH, AN-ACC – Shadow Assessment to Commence in April 2021, newsletter, 31 March 2021; DoH, The Australian National

Aged Care Classification (AN-ACC) shadow assessment management organisations, newsletter, 8 January 2021. 16. R Storen, Aged care: a quick guide, op. cit., p. 2. 17. Ibid.

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Overview of incident management The serious incidence response scheme (SIRS) was introduced into residential aged care by the Aged Care Legislation Amendment (Serious Incident Response Scheme and Other Measures) Act 2021.18

Since January 2020, the Aged Care Quality and Safety Commission (Safety Commission) has had the regulatory functions for providers of aged care services, including the Serious Incident Response Scheme (SIRS), which commenced in April 2021. The SIRS has two components for approved providers: incident management obligations and reportable incident obligations. Under the Act, there are eight situations/incidents that are considered reportable incidents, this includes the use of restrictive practice with residential aged care recipients except when in line with the circumstances set out in the Quality of Care Principles 2014.19

A reportable incident is classified as either a Priority 1 or Priority 2 incident based on the type and impact of the incident. Priority 1 incidents need to be reported to the Safety Commission within 24 hours of the approved provider becoming aware of the incident. As of 1 October 2021, a Priority 2 incident needs to be reported within 30 days (prior to this, providers did not need to report these incidents).20

Overview of key governance arrangements The Royal Commission provide the following, brief overview of the regulation of the aged care system:

The Aged Care Act and delegated legislation provide the framework for aged care providers and provide protection for people receiving aged care.

The legislative framework sets out the requirements to be an approved provider, for the allocation of aged care places and for the approval and classification of care recipients. It also provides for government subsidies and sets out the responsibilities of approved providers, including in relation to aged care quality and compliance.

This detailed and complex regulatory framework governs the government subsidies and supplements that are payable, the fees that can be charged to people and the conditions that must be met for funding to be provided. It has developed to protect people receiving care and ensure fiscal sustainability but has also been criticised for constraining choice and innovation and imposing regulatory burdens. The system is one where its size and shape is constrained by government through controls on the supply of aged care places rather than driven by demand. This manages the government’s budget risks but also means that people may not get the services they need.

Regulation and funding are intertwined.21 [references removed]

Organisations approved to provide Commonwealth subsidised aged care services (as identified in the Act) are known as Approved Providers.22 The regulatory functions for aged care are one of the

18. For further information see A Grove, E King and C Petrie, Aged Care Legislation Amendment (Serious Incident Response Scheme and Other Measures) Bill 2020, Bills digest, 43, 2020–21, Parliamentary Library, Canberra, 1 February 2021. 19. Subsection 54-3(2) of the Aged Care Act 1997. 20. Aged Care Quality and Safety Commission (ACQSC), ‘Serious Incident response Scheme’, ACQCS website, updated

10 November 2021. The change was made by the Aged Care Legislation Amendment (Serious Incident Response Scheme) Instrument 2021. 21. Royal Commission, Navigating the maze: an overview of Australia’s current aged care system – background paper 1, Royal Commission, Adelaide, February 2019, p. 38. 22. Not all aged care programs are defined in the Act and as such do not need to be delivered by Approved Providers, the largest

program that this is relevant for the Commonwealth Home Support Programme (CHSP). These providers do, however, have to observe other aged care legislative requirements.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 9

responsibility of the Safety Commissioner. To successfully apply to become an approved provider, an organisation must:

• meet the requirements set out in Part 7A of the ACQSC Act

• understand the responsibilities of an approved provider, as set out in the Act

• demonstrate they can deliver care that aligns with the associated Principles established under the Act.23

Once approved, providers are required to meet the Aged Care Quality Standards (Standards), with this requirement being set out in the Act under paragraph 54-1(1)(d). In addition, the Act provides for the Standards to be set out in the Quality of Care Principles 2014. There are eight standards with Standard 8 focusing on organisational governance.24 Aged Care Quality Assessors from the Safety Commission undertake the assessment and ongoing monitoring of the approved provider against the Standards. If a provider is assessed as not having meet a component of the Standards, the Safety Commission may respond in several different ways, including, at its most extreme, revoking an organisation’s approval.25

Overview of information sharing and regulatory alignment Reviews and inquiries into the aged care system have recommended and called on the need for enhanced data sharing of care recipient/patient data to improve clinical care and patient outcomes.26 There have been calls for enhanced information sharing arrangements between the aged care and disability sectors to enhance oversight of providers and workers that may work across, or move between, sectors, alongside increased focus on the care workforce as a whole, rather than being sector specific.27 One of the potential challenges encountered when considering the movement across and between sectors is meeting each sector’s own requirements rather than necessarily having transferrable, for example, registration. The rollout of the NDIS has prompted further consideration of this point, especially for service providers, but it has also been recognised that several sectors are likely to compete for the same or similar workforce, therefore raising the possibility of recognition of workers’ regulatory requirements across sectors.

Overview of prudential responsibilities - refundable deposits and accommodation bonds Before a person enters permanent residential aged care, they must agree to an accommodation price with the provider, however, the outcome of their means assessment will determine if they need to financially contribute towards their accommodation costs.28 For people who need to pay their full or partial accommodation costs, they will have three payment options:

• a lump sum:

– refundable accommodation contribution (RAC) – for people who are eligible for partial assistance from the Government towards their accommodation costs – refundable accommodation deposit (RAD) – for people who need to pay their full accommodation costs

23. Aged Care Quality and Safety Commission (ACQSC), Becoming an approved aged care provider, ACQSC website, last updated 17 November 2021. 24. Schedule 2 to the Quality of Care Principles 2014. 25. ACQSC, Regulatory Strategy, ACQSA, Canberra, 2020, pp. 16–17. 26. See, for example: K Carnell and R Paterson, Review of national aged care quality processes, Department of Health, Canberra,

2017.

27. Royal Commission, Final Report: Care, Dignity and Respect, Volume 3B: The new system, op. cit., p. 526; see, for example: the National Skills Commission’s, Care Workforce Labour Market study; and the Australian Institute of Health and Welfare’s Welfare workforce snapshot.

28. The Government can pay part or all of the person’s accommodation costs through the accommodation supplement.

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• a rental-style daily payment:

– daily accommodation contribution (DAC) – for people who are eligible for partial Government assistance – daily accommodation payment (DAP) – for people who pay their full accommodation costs • a combination of the lump sum and rental-style payments.29

Prior to changes introduced in July 2014, people may have been asked to pay an accommodation bond or accommodation charge.

Whilst there appears to be a gradual shift towards DAP/DAC and away from RAD/RAC, the average value of a RAD has grown and was estimated to be about $334,000 in 2019–20.30 The total value of accommodation deposits held by providers and the total number of accommodation deposits held was estimated to be $32.2 billion and over 96,600 RADs respectively on 30 June 2020.31

Accommodation bonds were initially introduced through the Aged Care Act as a way to encourage capital investment in residential stock to assist providers in meeting the building standards and improving the building stock. RADs can act as interest free loans for providers and are a major source of funding for capital investment. Given the anticipated increase of approximately 80,000 new aged care beds being needed over the next decade to meet the projected demand from population growth and ageing, it is estimated that this, in conjunction with the need to refurbish and rebuild existing stock, will require a total investment of $51 billion.32

There are several layers of protection afforded to people who pay their accommodation payment as a lump sum, including:

• Australian consumer law

• contract law

• prudential regulation of aged care

• the Accommodation Payment Guarantee Scheme.33

Overview of independent pricing for aged care In its 2011 Caring for Older Australians report, the Productivity Commission recommended the establishment of an independent Australian Aged Care Commission which would, among other things, be responsible for pricing, including monitoring prices and costs and recommending the level of prices, subsidies and indexation.34 The Productivity Commission suggested that in some situations, the pricing recommendations of the Australian Aged Care Commission would include supplements (or block funding) for specialised services (for example, specific services for people experiencing homelessness) and for operating in regional, rural and remote locations, including Indigenous-specific services.35

The Royal Commission made substantive recommendations on the governance of aged care and recommended the establishment of several institutions to improve the system. One of the

29. My Aged Care, ‘Understanding aged care home accommodation costs’, My Aged Care website, n.d. 30. ACFA, Annual Report on the Funding and Financing of the Aged Care Sector, op. cit., p. 85. In 2019–20, approximately 47 per cent of people living in residential aged care were partially or fully supported by the Government to meet their accommodation costs.

31. Ibid., p. 85. 32. Centre for the Health Economy at Macquarie University, The role of refundable accommodation deposits, report prepared for ACFA, DoH, Canberra, 2021, p. 8. 33. ACFA, The protection of residential aged care lump sum accommodation payments, DoH, Canberra, n.d. 34. Productivity Commission, Caring for Older Australians – Inquiry report: volume 1, Productivity Commission, Canberra, 2011,

p. xlvii.

35. Ibid., p. xxxiv.

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proposed institutions was an independent pricing authority, proposing two approaches that could be adopted.36

Committee consideration

Senate Community Affairs Legislation Committee The Bill was referred to the Senate Community Affairs Legislation Committee for inquiry and report, and the final report was tabled on 16 November 2021. Details of the inquiry are available on the inquiry’s webpage.

While the Committee recommended that the Bill be passed, there was a dissenting report on the Bill by the Australian Greens, which, while supporting the intentions to improve the quality of aged care, called for further consultation on the proposed reforms.37

While Labor Party Senators expressed support for positive action to reform the aged care sector and support-in-principle the changes to be introduced through the Bill, they note serious concerns that they do not believe have been adequately addressed by the Government and the Department of Health. Two key areas of concern are the need for additional consultation and response by the Government on concerns raised by stakeholders and issues regarding workforce recruitment and retention. Labor Senators made three additional recommendations, including supporting the recommendation of the Committee report that the Bill be passed.38

Independent Senator Patrick also expressed some concerns about the Bill as introduced and proposed a further amendment with respect to registered nurses in aged care facilities.39

Senate Standing Committee for the Scrutiny of Bills In its Scrutiny Digest 16 of 2021, the Standing Committee for the Scrutiny of Bills provided its initial scrutiny of the Bill.40 The Committee raised several concerns, many of which focused on the significant matters in the Bill that will be dealt with in delegated legislation and asked the Minister for further advice on these provisions.

Schedule 1 Paragraph 96-2(14)(a) of the Act allows the Secretary to delegate all or any of their powers or functions under Part 2.3 (which deals with approval of care recipients) and the Subsidy Principles 2014 to a person making an assessment for a person to be approved for aged care services (under section 22-4 in Part 2.3). Item 51 of Schedule 1 to the Bill will repeal and substitute subsection 96-2(14) of the Act, which will allow the Secretary to delegate all of the Secretary’s powers and functions under Part 2.3 of the Act to a person making an assessment for the purposes of section 22-4. The Committee (noting that the current provision provides a similarly broad delegation power) has requested advice from the Minister on why it is necessary and appropriate to allow for the delegation of any or all of the Secretary’s functions or powers under Part 2.3 and whether the

36. Royal Commission, Final Report: Care, Dignity and Respect, Volume 3A: The new system, op. cit., p. 40. 37. Dissenting report, Senate Standing Committee on Community Affairs, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, The Senate, November 2021, p. 52. 38. Additional Comments by Labor Party Senators, Senate Standing Committee on Community Affairs, Aged Care and Other

Legislation Amendment (Royal Commission Response No. 2) Bill 2021, The Senate, November 2021, p. 43–46. 39. Senate Standing Committee on Community Affairs, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, p. 55. 40. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 16, 2021, 21 October 2021, pp. 1–9.

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Bill can be amended to clarify the scope of the power that may be delegated or the people to whom the power may be delegated.41

Schedule 2 Item 4 of Schedule 2 (proposed section 7A of the ACQSC Act) will allow the Minister, by legislative instrument, to determine a law of a state or territory to be an aged care screening law. A note under proposed subsection 7A(1) states that these determinations will not be subject to disallowance due to the operation of subsection 44(1) of the Legislation Act 2003.42 The Explanatory Memorandum to the Bill states:

This recognises that it is undesirable for Parliament to disallow instruments that have been made for the purposes of a multi-jurisdictional body or scheme, as disallowance would affect jurisdictions other than the Commonwealth. If a determination under new section 7A is disallowed, the Aged Care Quality and Safety Commission (Commission) would be limited in its ability to properly perform its functions or unable to perform them at all.43

The Committee stated that it is unclear how allowing for disallowance would limit or prevent the Safety Commission from performing its functions and therefore requested more detailed advice from the Minister on:

• why it is necessary and appropriate that determinations made under proposed section 7A are not subject to disallowance

• whether the Bill could be amended to allow these determinations to be subject to disallowance.44

Schedule 3 The Committee expressed the view that the significant matters of a Code of Conduct, including its regulation and the introduction of a register of banning orders, should be dealt with in the primary legislation, especially given the proposed penalties for contravention of the Code of Conduct and the privacy implications of the register.45 The Committee requested the Minister’s advice on:

• why it is considered necessary and appropriate to leave the making of the Code of Conduct to delegated legislation and

• whether the Bill could be amended to include at least high-level guidance regarding these matters, including in relation to the content of the Code of Conduct, on the face of the primary legislation.46

In addition, the Committee raised concerns about proposed subsection 74GC(2) of the ACQSC Act (at item 25 of Schedule 3) which will give the Safety Commissioner a new power allowing them to impose a banning order on aged care workers and governing persons that may be general or specific, permanent or time limited, and/or subject to special considerations. The Committee asked the Minister for advice on whether the Bill could be amended to provide high-level guidance as to the conditions that may be placed on a banning order.

41. Ibid., pp. 1–2. 42. Subsection 44(1) of the Legislation Act 2003 provides that, in general, a legislative instrument is not disallowable if the enabling legislation for the instrument: (a) facilitates the establishment or operation of an intergovernmental body or scheme involving the Commonwealth and one or more states or territories; and (b) authorises the instrument to be made by the body

or for the purposes of the body or scheme. 43. Explanatory Memorandum, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, p. 56. 44. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 16, 2021, op. cit., pp. 2–3. 45. Ibid., p. 4. 46. Ibid., pp. 4–5.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 13

Under proposed subsection 74GD(1) of the ACQSC Act (at item 25 of Schedule 3), an individual who breaches a banning order may have a civil penalty imposed. The Committee stated it did not consider the Explanatory Memorandum to have adequately explained why it is appropriate to provide civil penalties of up to 1,000 penalty units (currently $222,000) and has requested the Minister’s advice on why this is considered necessary and appropriate.47

Schedule 8 Item 78 of Schedule 8 will insert proposed section 215A into the Health Reform Act, which will allow an official of the Pricing Authority to disclose aged care information that is protected Pricing Authority information to the Aged Care Advisory Committee or a committee established under section 205.48 Proposed subsection 215A(2) provides that a committee member commits an offence if they then disclose or use that information. Proposed subsection 215A(3) provides that the committee member would not commit an offence if the disclosure or use is for the purposes of the performance of committee functions or in the course of the member’s committee service. In accordance with subsection 13.3(3) of the Criminal Code Act 1995, a person who seeks to rely on proposed subsection 215A(3) will bear an evidential burden in relation to these matters, (that is, the person must adduce or point to evidence suggesting a reasonable possibility that an exemption exists. If a defendant discharges his or her evidential burden, the prosecution must then discharge its legal burden to disprove the relevant matters beyond reasonable doubt). The Committee has requested that the Minister provide a detailed justification as to why it is appropriate to include this offence-specific defence and suggested that proposed subsection 215A(3) be amended to provide that the relevant matters are elements of the offence.49

The Minister responded to the Committee on 4 November 2021, but the response had not been published at the time of writing this Digest.50

Policy position of non-government parties/independents

Australian Labor Party In response to the second reading of the Bill, Ms Rishworth stated:

Labor supports action to fix the mess that our aged care system is in, but is concerned that this Bill … falls short…

we now have a situation where that royal commission has brought down a report and has made 148 recommendations, of which over half are not being implemented or are not being implemented properly. Of course, this bill is no different, with alterations and a number of items missing from the royal commission’s recommendations, which this bill is claiming to address.

…

I am really pleased that Labor has committed to a number of things that would support people in the system: a minimum staffing level in residential aged care[;] to reduce the home care waiting lists so that more people can stay in their homes for longer; importantly, recommended by the royal commission,

47. Ibid., p. 6. The value of a penalty unit is currently $222. See section 4AA of the Crimes Act 1914 and the Notice of Indexation of the Penalty Unit Amount. 48. Section 205 of the National Health Reform Act 2011 allows the Pricing Authority to establish committees to advise or assist it in the performance of its functions. 49. Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest, 16, 2021, op. cit., p. 9. 50. Senate Standing Committee for the Scrutiny of Bills, Ministerial Responses, The Senate, Canberra, accessed 20 November

2021.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 14

transparency and accountability; and making sure that staff have training and that there is a better surge workforce strategy.51

This position was echoed by other members of the party during the second reading debate.

As briefly discussed above, Labor Senators have expressed concerns in additional comments in the Final Report of the Senate Community Affairs Legislation Committee inquiry into the Bill, but supported the Bill’s passage.52

Centre Alliance Ms Sharkie stated that the reforms to the aged care sector cannot come soon enough and welcomed the new funding model. Ms Sharkie noted it is estimated that approximately one third of aged care workers also work in the disability sector and yet aged care workers are paid up to 25 per cent less than disability workers. As such, Ms Sharkie has called on the Government to support a current application for equal pay before the Fair Work Commission. Ms Sharkie also noted that she was awaiting the ‘report of the committee before indicating Centre Alliance’s formal position for this bill’ and urged the Government to do more to implementation the Royal Commission’s recommendations.53

Independents Senator Patrick has proposed amendments to the Bill that would insert a new Schedule 10 that would require at least one registered nurse on duty at all times in a residential aged care facility.54 He further reiterated his position on mandatory minimum numbers of registered nurses in the Senate Committee Report on the Bill.55

In the second reading debate of the Bill, Ms Steggall, overall, welcomed the Bill but noted several concerns and made a number of suggestions, including:

• that aged care peak bodies had expressed dismay on having not been consulted on the changes introduced in the Bill and encouraged the Government to improve on its consultation processes with the experts within the field, especially those who will be impacted by the proposed changes

• the impact of the new pricing model to be introduced by the Bill is unclear, with providers expressing concerns about being worse off under the new model

• while the introduction of the Code of Conduct is a welcome development, the ‘broad and vague’ terms used and the high penalties for breaches has resulted in stakeholders expressing significant concerns

• the new governance requirements for providers’ governing bodies should include more specific guidance in the legislation or regulations around the arrangements that may be utilised for different entity structures

51. A Rishworth, ‘Second reading speech: Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021’, House of Representatives, Debates, 25 October 2021, pp. 77–79. 52. Additional Comments by Labor Party Senators, Senate Standing Committee on Community Affairs, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, op. cit. 53. R Sharkie, ‘Second reading speech: Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill

2021’, House of Representatives, Debates, 25 October 2021, p. 92–3. 54. R Patrick, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, amendment, sheet 1455 revised, 19 October 2021. 55. Senate Standing Committee on Community Affairs, Aged Care and Other Legislation Amendment (Royal Commission

Response No. 2) Bill 2021, op. cit., pp. 54–55.

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• there is a need to have a registered nurse on site at residential aged care facilities at all time.56

Position of major interest groups

Comments specifically relating to the Bill

Australian Aged Care Collaboration In its submission to the Senate Community Affairs Legislation Committee inquiry, the Australian Aged Care Collaboration (AACC) (which is made up of six aged care peak bodies) raised several concerns about the Bill and the broader reform agenda. Some of these concerns are briefly discussed below.

Schedule 1:

• in the work undertaken to develop the AN-ACC a recommendation was made (number 22) that the Government should implement a stop-loss policy for a facility that would experience a significant decrease in funding under the AN-ACC model, with an initial threshold of five per cent and transition arrangements for up to two years from the date of transition (from ACFI to AN-ACC).57 AACC raised concerns that this stop-loss policy has not been adopted by the Government, which has argued it won’t be needed.

• AACC called for the introduction of governance arrangements for the independent assessment to ensure that people are not under-classified.

Schedule 2:

• AACC anticipated there will be increase in cost to aged care workers as they transition from a police check to a screening check. This concern is based on the experience with the NDIS with a WA police check costing $57 and an NDIS check costing $145. As such, AACC has called on the Government to cover any difference in costs that workers may experience.

• Providers have reported that they have experienced significant delays with the processing of NDIS checks and whilst some states have implemented interim arrangements, not all have done so. AACC has called on the Government to address these delays to avoid exacerbating ongoing workforce challenges.

Schedule 3:

• AACC suggested that the disciplinary procedures for health professionals has much clearer processes for procedural fairness than the proposed Code of Conduct model and therefore changes should be made to afford procedural fairness.

• Given the potential for duplication, AACC recommended that health professionals are exempted from the Code of Conduct and associated banning orders.

• Provisions for interim suspension orders should be included that would allow the regulator to respond to concerns of immediate and serious harm.

Schedule 4:

• AACC made several recommendations to amend the Bill to ensure that the subordinate legislation meets certain requirements. For example, home care services and staff have more limited means to manage certain incidents compared with residential care services.

Schedule 5:

56. Z Steggall, ‘Second reading speech: Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021’, House of Representatives, Debates, 25 October 2021, pp. 90–1. 57. AHSRI at the University of Wollongong, AN-ACC: A National Classification and Funding Model for Residential Aged Care: Synthesis and Consolidated Recommendations – Report 6, prepared for the DoH, DoH, Canberra, 2019, p. 19.

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• AACC raised concerns about the potential for duplicate reporting with the requirements for annual statements. In addition, AACC wished to avoid the publication of ‘potentially misleading data such as non-risk adjusted clinical indicator data or datapoints such as complaints or incident reports’, as this could result in underreporting.

Schedule 8:

• AACC recommended that the existing appointment mechanisms to the IHPA Board and CEO should be retained, including the appointment of board members with agreement from the states and territories, as this would retain stronger independence of the Independent Pricing Authority.

• Further clarification should be provided on the Independent Pricing Authority’s remit, for example, whether it will consider pricing and costs for home care.

• AACC recommended that the Bill be amended to require reports prepared by the Independent Pricing Authority to be tabled in Parliament in a timely fashion and to require the Authority to publish annual reports on contextual funding and financing issues.58

Catholic Health Australia As part of its summary of the major legislative changes introduced in the Bill, CHA flagged that it considered the notable feature of the Bill to be the significant increase in regulation that will be introduced. The replacement of ACFI and the introduction of independent costing and pricing, will require a ‘significant uplift in the sector’s capacity to engage with the Independent Pricing Authority professionally on an evidence-based basis’.59 In addition, CHA noted:

Given that the pricing and costing functions for aged care and public hospitals are so different at many levels and contexts, CHA has previously expressed reservations about combining the two functions in one organisation. The governance arrangements provided in this Bill have taken account of these differences to provide a reasonable degree of separation of the two functions, but still leave the bulk of the Authority members appointed in consultation with state/territory Health Ministers.60

Health Services Union In its submission to the Senate Inquiry, the HSU made nine recommendations, with a particular focus on amendments to Schedules 2, 3 and 4 of the Bill. Among these recommendations is the delay of both Schedule 2, until full details are tabled; and Schedule 3, until sector-wide consultation can be undertaken and the Senate has full details of the proposed Code of Conduct. The HSU echoed the AACC’s call for procedural fairness for banning orders as well as the serious incident response scheme. Alongside this, an individual’s privacy must be protected.

The HSU recommended that the Government take immediate steps to implement the Royal Commission’s Recommendation 77, with particular focus on 77-1 and -2.61 In addition, the HSU recommended that Recommendation 114, immediate funding for education and training to improve the quality of care, be implemented to complement Recommendation 77. The HSU

58. Australian Aged Care Collaboration (AACC), Submission to Senate Community Affairs Legislation Committee, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 inquiry, 3 November 2021. 59. Catholic Health Australia (CHA), Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 – Summary Of Major Legislative Changes, CHA, 31 October 2021, p. 1. 60. Ibid., p. 10. 61. Recommendation 77-1 called for the Australian Government to establish a national registration scheme for the personal care

workforce by 1 July 2022 and Recommendation 77-2 called for transitional arrangements for existing personal care workers who do not meet the minimum qualification requirements, which allow them to apply for registration based on their experience and prior learning: Royal Commission, Final Report: Care, Dignity and Respect, Volume 3A: The new system, op. cit., p. 392.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 17

reflected that whilst worker screening and a code of conduct are part of a registration scheme, they are not the only elements needed for a comprehensive scheme.62

Australian College of Nursing The ACN broadly welcomed many of the measures proposed in the Bill and agreed they will improve quality, accountability and governance of the sector; however, the ACN made some suggested amendments to the Bill, including:

• the insertion of a new primary object to the Act about the provision of high quality and safe care for every older person in Australia

• concerns that the fee structure of the AN-ACC model has not yet been outlined, which makes it difficult to determine if there will be sufficient resourcing to enable appropriate registered nurse governance and care

• in addition, the ACN raised concerns that the AN-ACC model does not appear to include support for wandering residents living with dementia. The model may also limit future consideration of dementia-specific facilities

• with regards to the proposed screening requirements, the ACN recommended a three-year review for all workers and a transition period to support aged care workers, especially those on low income, to pay for the new checks when they are able to rather than by the 1 July 2022 deadline

• the ACN thought that mandatory minimum training requirements should be introduced for aged care workers

• as identified in the AACC submission, the ACN expressed concern with the Bill’s distinction between governance requirements for services with 40 residents or less, with the ACN suggesting this figure is arbitrary and should instead be based on the acuity of the residents and other contextual factors

• the ACN raised several concerns about the proposed amendments relating to the Independent Pricing Authority, with a particular focus on home care package and care management

• the ACN is concerned that the proposed changes in Schedule 9, which amends the restrictive practice requirements, suggest that consent is only required once rather than being regularly reviewed.63

COTA Australia COTA welcome the amendments introduced in the Bill but flagged some areas of concern, including:

• access to residential respite under the proposed model has the potential to result in fewer respite positions being available and as such, should be carefully monitored and assessed

• COTA recommended consideration should be given to how the Code of Conduct can be applied to service providers who are not approved providers as well as clarification on whether provisions apply to subcontractors of approved providers

• COTA has called on the Government to release an exposure draft for consultation for the quality of care principles which will extend the SIRS into home care

62. Health Services Union (HSU), Submission to Senate Community Affairs Legislation Committee, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 inquiry, 3 November 2021. 63. Australian College of Nursing (ACN), Submission to Senate Community Affairs Legislation Committee, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 inquiry, November 2021.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 18

• COTA recommended that the Government extend the new governance arrangements for appropriate CHSP providers.64

Older Persons Advocacy Network In its submission to the Senate Inquiry, OPAN raised several points for further consideration and recommended a number of amendments to the Bill, including:

• OPAN raised concerns about the possible application fee that could be charged if a care recipient requests to be re-classified from respite or non-respite care and recommended that exemptions for the fee, which may be identified in the updated Classification Principles, take into account people’s socio-economic status and other potential vulnerability they may experience

• OPAN recommended a process be implemented to allow people who self-manage their home care packages and directly employ or sub-contract their own workers to be able to access the screening database or establish a process they may refer a potential worker to so that they can be checked within the database prior to engaging that person

• OPAN requested additional clarification on how a banning order will be cross referenced or linked to the Aged Care Screening Database and how this information may be provided, or received, from the NDIS system. In addition, it is unclear if any of this information will be publicly available

• OPAN raised several concerns about the governance arrangements and, as noted in other submissions, questioned the distinction made based on 40 residents and suggested some providers may explore options to work around this requirement

• OPAN also raised several concerns about the proposed approach in relation to consumer advisory groups, expressing disappointment that this is optional.65

Select comments on the related but broader aged care reforms In April 2021, the AACC issued its response to the Royal Commission’s Final Report. The report identified six key reform areas, including transparent and independent funding arrangements and financing quality aged care.66

In the most recent edition of the Leading Age Services Australia (LASA) magazine, the CEO, Sean Rooney, notes that the AACC wrote to Ministers Hunt and Colbeck and the Prime Minister about the AACC’s response to the Royal Commission. The article goes on to state:

Unfortunately, their responses to date leaves the aged care sector significantly concerned that the once-in-a-generation opportunity to fix our broken aged care system will not translate into meaningful actions and tangible outcomes… At present, the door appears to be shut on the sector’s involvement in the planning process on the landmark aged care reforms recommended by the Royal Commission.67

This concern about the Government failing to engage the aged care sector and lagging on reforms has previously been denied by the Minister for Senior Australians and Aged Care Services.68

64. COTA Australia, Submission to Senate Community Affairs Legislation Committee, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 inquiry, November 2021. 65. Older Persons Advocacy Network (OPAN), Submission to Senate Community Affairs Legislation Committee, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 inquiry, n.d. 66. Australian Aged Care Collaboration (AACC), Aged care - the way forward, April 2021, p. 3. 67. S Rooney, ‘The reform task ahead – it’s up to us! Consultation with aged care providers must be a key part of the process’,

Fusion, 27 September 2021, p. 8. 68. J Skatssoon, ‘Minister denies aged care sector being left out of reform process’, Community Care Review, 25 August 2021.

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The AACC welcomed the formation of the new Council of Elders but noted a lack of clarity in the schedule for the broader reform agenda for aged care in response to the Royal Commission.69

The Australian Medical Association (AMA) has raised concerns about the potential privatisation of the assessment process as the aged care sector shifts to one assessment workforce. Whilst the AMA is supportive of a single assessment workforce it has called for it to remain with the state and territory health services and to be based on the ACAT model rather than the RAS model.70

Financial implications The Explanatory Memorandum to the Bill states that there will be a medium cost to the Government of an estimated $201.3 million.71

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.72

Parliamentary Joint Committee on Human Rights The Parliamentary Joint Committee on Human Rights has provided comment on the Bill, with a focus on the proposed register of banning orders, especially as the rules may allow the information to be publicly available, and focussed on the right to privacy. The Committee has asked whether the proposed measures in the Bill are proportionate, necessary and reasonable when considering the safety of care recipients and limiting the right to privacy for people with a banning order. The Committee reflected that it is unclear why it would be necessary to make the information in the register available to the general public, rather than limiting it to potential and current employers in the sector. Given much of the detail is dependent on the rules, the Committee has stated that it will examine the rules, should they be made.73

Key issues and provisions

Residential aged care assessment and basic subsidy (Schedule 1)

Brief overview Schedule 1 of the Bill will introduce changes to two Acts:

• Aged Care Act 1997 (the Act)

• Aged Care (Transitional Provisions) Act 1997 (the Transitional Act)

There are two parts to this schedule:

• Part 1 focuses on elements of classification of care recipients and the amount of residential care subsidy, supplements and some fees

69. AACC, Aged care industry welcomes Council of Elders but says reform roadmap behind schedule, media release, 1 October 2021. 70. Australian Medical Association (AMA), AMA warns against privatising aged care assessment, media release, 9 September 2021. 71. Explanatory Memorandum, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, p. 3. 72. The Statement of Compatibility with Human Rights can be found at pages 4–22 of the Explanatory Memorandum to the Bill. 73. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 11, 2021, 16 September 2021, pp. 2–6.

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• Part 2, the application, transitional and saving provisions, outlines changes to provide for the transition to new arrangements on 1 October 2022.

Part 1 Chapter 2 of the Act, ‘Preliminary matters relating to subsidies’, provides for several approvals and decisions that have to be made/ may need to be made prior to the Commonwealth paying a subsidy to an approved provider.74 Schedule 1 would make amendments to a number of Parts in this Chapter, in particular Parts 2.2, 2.4 and 2.4A.

Chapter 3 of the Act, ‘Subsidies’, provides for the subsidies the Commonwealth pays an approved provider for residential aged care, home care and flexible care. This Chapter builds on Chapter 2, with some requirements needing to be meet from Chapter 2 before elements of Chapter 3 become relevant. For the purpose of Schedule 1, the focus is on Part 3.1, Division 44, the amount of residential care subsidy.

The Transitional Act applies to people who were already care recipients prior to 1 July 2014 and wished to continue under the previous arrangements. One of the main differences for people covered by the Transitional Act compared to the Act is the fees and costs the person may be required to pay.

Similar to the changes to be introduced in the Act, the amendments to the Transitional Act will include changes to Part 3.1, which focuses on residential aged care subsidy, with changes such as clarifying basic subsidy for pre-1 October 2022 arrangements. The main changes to be introduced in Part 4.2 are more specific to care recipient arrangements from before July 2014 and will repeal high and low care classifications and insert some changes to accommodation bonds.

The proposed changes are divided by the introduction of the AN-ACC on 1 October 2022, with transition arrangements being outlined in Part 2 of the Schedule. The introduction of the AN-ACC model will modify several existing funding arrangements, especially with regards to the respite supplement, as the existing residential respite arrangements will cease following the introduction of the AN-ACC.

The classification of care recipients, which will predominately be dealt with in the Classification Principles, will change with the introduction of the AN-ACC model on 1 October 2022. Whilst limited details are currently available, this will include independent assessment of care recipients and their classification to a particular AN-ACC class. Stakeholders have raised concerns on the limited information available, for example the fee structure for the AN-ACC model is not currently available, and the possible outsourcing and privatisation of the independent assessment.75

The following sections on the key provisions mainly relate to the Aged Care Act (the Act), except when specified otherwise.

Part 2 A number of administrative changes are made in Part 2 of Schedule 1, which are needed to support the introduction of Schedule 1, including some grandfathering provisions for arrangements in place prior to the 1 October 2022. Item 107 provides for the Minister to make rules, by legislative instrument, for matters of a transitional nature, including elements relating to the amendments and repeals made by the amending Part. As part of this item, clarification is

74. A person or organisation is approved to provide services, and thus becoming an approved provider, by the Aged Care Quality and Safety Commissioner as outlined in the Aged Care Quality and Safety Commission Act 2018. 75. For example see the ACN Submission to Senate Community Affairs Legislation Committee, op. cit., pp. [2]–[3]; AMA, AMA warns against privatising aged care assessment, op. cit.

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provided on what the rules made by the Minister cannot include or create, such as the creation of an offence or civil penalty or directly amending the text of Schedule 1.

Residential respite care Subsection 14-5(1) of the Act provides the Secretary with the power to make an allocation of places to a person subject to specified conditions. This currently includes conditions on the allocation of places of residential respite and the number of days available to an eligible person in a financial year. Item 4 will insert proposed section 17A-1 into Part 2.2 of the Act, which will revoke conditions that provide, in relation to the allocation of residential respite places provided in subsection 14-5(1), that care must be provided for a minimum or maximum number of days. This will allow approved providers the ability to determine the places and days they make available for residential respite care. In addition, this item specifies that this section will not impact the Safety Commission’s ability to issue sanctions for approved providers who failed to comply with conditions that apply prior to proposed section 17A-1 coming into effect.

Classification of care recipients Part 2.4 of the Act focuses on the classification of residential care and recipients of some kinds of flexible care, which may have an impact on the amount of subsidy available to the approved provider. Part 2.4A provides for the Secretary to classify residential and some kinds of flexible care recipients. Items 5 and 18 of Schedule 1 will modify Part 2.4 and Part 2.4A so that Part 2.4 would cover the classification of care recipients before 1 October 2022 and Part 2.4A would be changed so as to relate to the classification of care recipients on or after 1 October 2022.

Appraisal of care recipient classification (before 1 October 2022) Division 25 of the Act (in Part 2.4) outlines how a care recipient is classified for residential or some kinds of flexible care (noting this is also dealt with in the Classification Principles made by the Minister) with section 25-1 providing the requirements for the classification of a care recipient. Item 7 will insert proposed subsection 25-1(1A) which would remove the requirement for the Secretary to classify a care recipient if the classification would come into effect on or after 1 October 2022. Item 8 will insert proposed subsection 25-3(1A) which will mean the approved provider providing care or a person authorised to make an appraisal of the level of care needed must not undertake an assessment that would come into effect on or after 1 October 2022. Item 9 will insert proposed subsection 25-3(5) which would make subsection 25-3(4), which specifies the assessment required for a person who is, or will, be provided with respite care, no longer applicable if the assessment comes into effect on or after 1 October 2022.

Reappraisals of care recipient classification (before 1 October 2022) Section 27-4 of the Act (in Part 2.4) currently outlines when an approved provider may undertake a reappraisal of a person’s care needs, such as when the person has transferred from another residential care service or their care needs have changed significantly. Under section 27-6, the Secretary has the power to renew the classification of the care recipient if they receive a reappraisal and the reappraisal has been made due to the expiry of the existing appraisal or the reappraisal has been undertaken for reasons outlined in section 27-4. Item 14 will insert proposed subsection 27-4(1A) which provides that an approved provider must not undertake a reappraisal under these sections if it would come into effect on or after 1 October 2022. Item 15 will insert proposed section 27-5A which provides that a reappraisal must not be made due to the expiry date of the existing appraisal if the renewal of the classification would come into effect on or after 1 October 2022. In addition, Item 16 inserts proposed subsection 27-6(1A), which allows the Secretary to not renew a classification if that renewal would come into effect on or after 1 October 2022.

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Classification of care recipients (after 1 October 2022) Division 29C of the Act (in Part 2.4A) provides for how a care recipient is classified for residential and some kinds of flexible care. Section 29C-3 specifies the Secretary may assess care recipients when that person is receiving respite or non-respite care,76 which this section refers to as the ‘relevant kind of care’ for classifying or reclassifying the care recipient under Part 2.4A. Subsection 29C-3(1) allows the Secretary to assess a care recipient who is receiving care and, under Item 22, will also be able to assess someone who had been provided with care, for the purposes of classifying or reclassifying the care recipient under this Part for the relevant kind of care. In addition, Item 23 will add proposed subsection 29C-3(1) that allows the Secretary to assess the level of care when reconsidering, as outlined in sections 85-4 or 85-5, a decision made under the following subsections:

• subsection 29C-2(1) – when there is no classification of the care recipient or the Secretary decides to reclassify the care recipient under Part 2.4A

• subsection 29D-1(1) – when an approved provider requests the Secretary reclassify the care recipient

• subsection 29E-1(1) – when the Secretary is satisfied that the assessment was incorrect or inaccurate.

The Explanatory Memorandum states that it may be necessary to retrospectively classify or reclassify care recipients as a care recipient may have ‘left care before an assessment could be performed while the care recipient was still being provided with care’.77 The Explanatory Memorandum further explains:

This is appropriate as, depending on the date of effect of the classification decided after the assessment, the care recipient’s classification may affect payment of subsidy to the care recipient’s approved provider for the period during which the care recipient received care, even if the care recipient has subsequently stopped receiving care from the approved provider.78

Item 24 will repeal and replace subsection 29C-3(2), which would expand the existing items that may be specified in the Classification Principles to include where the Secretary may or must undertake the assessment. Therefore, this could include the ability to assess a current or previous care recipient in a place other than where they are or did receive care.

Items 44–50 will amend section 85-4 and section 85-5, which provide for reconsidering reviewable decisions. The amendments will:

• require the Secretary to consider similar cases in their review (proposed subsection 85-4(3A))

• limit the Secretary’s ability to make a decision when the care recipient cannot be assessed. In this circumstance, the original assessment would remain in place (proposed subsection 85-4(3B))

• expand when fee payments may be required upon request of a reviewable decision, which will be identified in the Classification Principles (Items 46 and 49)

• allow the Classification Principles to potentially identify when the Secretary or Pricing Commissioner may nominate to waive the fee for care recipients for reconsideration of a decision (Item 50).

76. Non-respite care is defined in the Dictionary in Schedule 1 of the Act as ‘residential care, or flexible care of a kind specified in the Classification Principles for the purposes of paragraph 29C-1(b), other than respite care’. 77. Explanatory Memorandum, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, op. cit., p. 30. 78. Ibid., p. 30.

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Item 25 will repeal and substitute section 29C-7, which currently specifies that a person’s classification made under Part 2.4A is not valid if the person ceases to be a care recipient to whom the Division applies, but if they become a care recipient again at a later time, that classification would continue. Proposed section 29C-7 will modify the second half of this existing section and provide for the Classification Principles to specify when the previous classification may come back into effect for people who again become a care recipient. This amendment would allow the Classification Principles to specify when classifications expire when a person no longer receives care and when classifications may be applied again if the person was to re-enter care.79

Item 26 will repeal and replace subsection 29D-1(1). Currently this subsection provides for the Secretary to reclassify a person for respite or non-respite care under section 29C-2 if the approved provider requests a reclassification. Proposed subsection 29D-1(1) would expand this to also allow the care recipient to make the request. Current subsections 29D-1(2) and (3) specify that the Secretary can only reclassify someone if the person’s needs have changed significantly, with the circumstances in which this may be applicable may be outlined in the Classification Principles. Proposed subsection 29D-1(1A) provides for some of the requirements that a request must meet including proposed paragraph 29D-1(1A)(c) that specifies that the request would need to be accompanied by a new application fee, if any, specified in the Classification Principles. Proposed subsection 29D-1(1B) specifies that the amount of the fee must not be such that it would amount to taxation.

Subsidy and supplement in residential care The basic subsidy is currently calculated using one of several approaches, the most common being the ACFI but other options include the Residential Classification Scheme (RCS) for people who have not been assessed using the ACFI (covered in the Transitional Act) and the respite care level.80 Item 30 will repeal and replace subsection 44-3(2), which currently provides for the Minister to determine the basic subsidy amount by legislative instrument. Proposed subsection 44-3(2) will continue to provide this arrangement but inserts that this amount can instead be worked out using a method that has been determined by the Minister by legislative instrument. This provides some additional flexibility for the Government in determining the way the basic daily supplement amount is set. Item 57 will introduce the same change in the Transitional Act with the repeal and insertion of proposed subsection 44-3(2).

Subsection 44-3(3) provides for the Minister to determine different amounts based on a range of circumstances, such as the person being on extended hospital level or when a person is receiving respite care. Item 31 will insert proposed paragraph 44-3(3)(aa) which expands this list to include when a person is receiving residential aged care but has not yet been classified under Part 2.4A. In practice, this provides for instances of emergency care and the transition of people moving from classification under Part 2.4 (pre-1 October 2022) to Part 2.4A (on or after 1 October 2022). In addition, this provides the opportunity for grandfathering arrangements to be introduced for people who were classified before 1 October 2022. A similar change will be made by Item 58 which will insert proposed paragraph 44-3(3)(aaa) into the Transitional Act, which will add care recipients being provided with care who has not been classified under Part 2.4A of the Act to the list of situations in which the Minister may determine different basic subsidy amounts.

Item 32 will modify paragraph 44-3(3)(a) of the Act, which currently provides for the Minister to determine the amount for the different classification levels for care recipients being provided with residential care. The proposed amendment to paragraph 44-3(3)(a) at item 32 will change this so

79. Ibid., p. 31. 80. DoH, Schedule of Subsidies and Supplements for Aged Care, DoH, Canberra, updated 20 September 2021.

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that the Minister may determine different amounts based on the classification levels for care recipients who have been classified under Part 2.4A. This will allow the Minister to determine the different amounts associated with the new classification levels used from 1 October 2022. This change will also be introduced to the Transitional Act by Item 59. In addition, Item 60 will repeal four instances when the Minister may determine different amounts in subsection 44-3(3) of the Transitional Act in preparation for the changes to be introduced on 1 October 2022, these include repealing paragraph 44-3(3)(aa), which focuses on low level care residents as low level (and high level) will no longer be a distinction used for residential care recipients from 1 October 2022.

Item 34 will repeal subsection 44-3(4), which currently requires that the Minister not set different amounts for people who are on extended hospital leave (30 or more days) of less than half of the amount of the basic subsidy amount the provider would have received for the person had they not been on leave. This same provision will also be repealed by Item 61 in the Transitional Act.

Item 35 will repeal two primary supplements identified in paragraph 44-5(1)(a), the respite supplement and the dementia and severe behaviours supplement (noting this supplement was ceased in 201481). This is in response to the introduction of the AN-ACC funding model, which will include respite assessments. Item 62 will repeal two primary supplements under the Transitional Act as well, the charge exempt resident supplement (subsection 44-5(aa)) and the respite supplement (subsection 44-5(b)).

Also in response to the AN-ACC model, Item 37 will repeal section 44-19, which established the adjusted subsidy reduction, which applies to residents in some state and territory run services. This provision is also repealed from the Transitional Act by Item 69 which repeals subsection 44-17(b).

In the Government’s proposed amendments to the Bill, four additional items will be inserted after Item 37, Items 37A–D.82 Items 37A and 37B will repeal and substitute paragraphs within the care subsidy reduction calculation itself in subsection 44-21(2), whilst Items 37C and 37D will modify subsections 44-21(3) and 44-21(6) respectively to cross reference to the changes within the care subsidy reduction calculator. In a similar manner, Items 71 and 71A of the proposed amendments from the Government will modify the income test and income test reduction calculator in section 44-21 of the Transitional Act.83 According to the supplementary explanatory memorandum this change, alongside other proposed changes in the amendment, is in response to potential unintended consequences of the Bill itself that would, in certain circumstances, calculate the incorrect amount of residential care subsidy to be paid to providers who have care recipients with high assets and/or high income.84

Item 38 will repeal respite care being an exception to receipt of the accommodation supplement in section 44-28. As such, from 1 October 2022, providers will receive the accommodation supplement for eligible people receiving respite care in their service. This same provision in the Transitional Act will also be repealed by Item 63. Item 39 will repeal paragraph 44-28(2)(a), which currently provides the eligibility for the accommodation supplement and will insert a new

81. Explanatory Memorandum, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, op. cit., p. 34. 82. Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, Government amendment, sheet ZB120, House of Representatives, 25 October 2021. 83. Ibid. 84. Supplementary Explanatory Memorandum, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2)

Bill 2021, p. 1.

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exception for receipt of the accommodation supplement, to provide that it will not be available for a care recipient in an extra service place.85

Item 65 will repeal paragraph 44-6(2)(a) of the Transitional Act that provides for a care recipient to be eligible for a concessional resident supplement if they are not classified at the lowest applicable classification level. This will no longer be relevant from 1 October 2022, as this classification category will no longer exist. Therefore, Item 66 will insert a new subsection, proposed subsection 44-6(3), which will provide for grandfathering care recipients with the concessional resident supplement. If the care recipient was eligible on 30 September 2022 for a charge exempt resident supplement under section 44-8A of the Transitional Act (which will be repealed by Item 67 of Schedule 1) or a transitional supplement under section 33 of the Aged Care (Transitional Provisions) Principles (which will also be repealed), they will be eligible for the concessional resident supplement from 1 October 2022.

The Transitional Act currently provides for the viability supplement under paragraph 44-27(1)(b). This supplement is available for higher operating costs for small services in rural and remote areas. Item 72 will repeal this paragraph, as the AN-ACC model will factor these variables into its base care calculations.

Resident fees Section 52C-3 of the Act provides a resident fee calculator that gives a maximum daily amount of resident fees for the care recipient. This includes consideration of the means tested care fee, where applicable. Currently, under subsection 52C-3(3), the means tested care fee is: zero for people receiving residential respite care (paragraph 52C-3(3)(b)); or is equal to the amount of the care subsidy reduction, which is determined by sections 44-21 and 44-23 (paragraph 52C-3(3)(a)). Part of the calculation of the care subsidy reduction includes the basic subsidy amount.

The proposed amendments from the Government omit Items 40 and 41 of the Bill, as well as Items 80 and 81, which would have modified the Transitional Act.86 The reasoning behind this omission is to prevent unintended consequences with resident fees for some care recipients.87

Section 52C-5 of the Act provides some clarification on when, and the calculation of, the maximum daily amount of resident fees for reserving a place that may be charged when the person is not on leave but is absent from the service. Item 42 repeals and replaces the second half of this section and instead of determining the maximum fee by using subsection 52C-3, the amount will be determined by the Minister by legislative instrument or worked out using the method determined by the Minister by legislative instrument. The Explanatory Memorandum describes the intent of this item as aligning with the maximum daily amount as amended by Item 41 (which has been omitted in the Government’s proposed amendments and is proposed to be replaced by Items 37A and 37B).88

85. Extra services involve the provision of significantly higher than average standards of service, such as accommodation and food. Extra service places is provided for in the Act (Part 2.5) and the Extra Service Principles. Approved providers wishing to offer extra service places need to apply to the Aged Care Pricing Commissioner for approval of the extra service fee and enter into an extra services agreement with the care recipient.

86. Amendments (3) and (5) of the Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, Government amendment, sheet ZB120, House of Representatives, 25 October 2021. 87. Supplementary Explanatory Memorandum, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, op. cit., pp. 11 –12. 88. Ibid., p. 11; Amendment (2) and (3) of the Aged Care and Other Legislation Amendment (Royal Commission Response No. 2)

Bill 2021, Government amendment, sheet ZB120, House of Representatives, 25 October 2021; Explanatory Memorandum, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, op. cit., p. 33.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 26

Accommodation bonds Accommodation bonds and charges are relevant to people who entered residential aged care prior to 1 July 2014. Similar to the Refundable Accommodation Deposit (RAD) and the Daily Accommodation Payment (DAP) that people may be asked to pay when entering a service now, the bond was a lump sum payment by low-care residents and people in extra services places and the charge was a rental-style payment made by high-care residents.89

Section 57-2 of the Transitional Act provides the basic rules about accommodation bonds. Paragraphs 57-2(1)(aa) and (ab) outline specific criteria that needed to be satisfied at the time of entry, forming part of the rules for charging an accommodation bond for entry into a residential care service or a flexible care service. Item 74 will repeal these two paragraphs and substitute them to recognise the cessation of the low care classification and a charge exempt resident. In addition, proposed paragraph 57-2(1)(a) provides for the transfer of residents’ bonds from one service to another service and requires that the person continue to be charged an accommodation bond. Item 78 will make similar changes to section 57A-2 on basic rules about accommodation charges, removing, among other rules, reference to high and low care as well as charge exempt residents.

Screening of workers and governing persons (Schedule 2)

Brief overview Schedule 2 will make amendment in two Acts:

• Aged Care Act 1997 (the Act)

• Aged Care Quality and Safety Commission Act 2018 (ACQSC Act).

The only change made to the Act is the proposed inclusion of a new responsibility for approved providers, requiring them to comply with changes to be made in the Accountability Principles 2014 relating to the screening of governing persons and aged care workers, including volunteers, contractors and sub-contractors (referred to as contractors in the discussion below).

Schedule 2 will also introduce several significant changes to the ACQSC Act, which include:

• providing for the Minister, by legislative instrument, to determine a law of a State or Territory to be an aged care screening law

• enabling the Safety Commission to establish, operate and maintain an Aged Care Screening Database

• outlining when the Safety Commission may disclose protected information contained in the database

• introducing an offence when an approved provider fails to comply with their responsibilities relating to the screening of aged care workers and governing persons

• allowing information to be shared from the NDIS worker screening database with potential or existing employers, the Secretary and/ or the Safety Commissioner.

Based on the information provided in this Bill, it appears that aged care screening will be similar to the NDIS worker screening arrangements, including that there will be aged care service providers and employees who will not be required to undertake screening. This is due to some programs being established outside of the Act, including the Commonwealth Home Support Programme

89. DoH, Managing accommodation bonds and charges for residential aged care, DoH website, last updated 22 June 2021.

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(CHSP) and the National Aboriginal and Torres Strait Islander Flexible Aged Care Program (NATSIFAC).

Some stakeholders have suggested that consideration should be given to offsetting the additional costs for aged care workers following the introduction of the screening requirements and exploring options to minimise potential delays following the application to the working screening units.90

Approved provider responsibilities expanded Item 1 will introduce proposed paragraph 63-1(1)(la) into the Act, expanding on the list of responsibilities of approved providers under Part 4.3 – Accountability. This new, proposed responsibility will require the approved provider to comply with Accountability Principles with regards to the screening of aged care workers and governing persons of the approved provider, as specified in those principles.

The proposed definitions for both aged care workers and governing persons is provided in Schedule 3, items 2 and 5, which provide:

• aged care worker of an approved provider means:

– an individual employed or otherwise engaged (including on a voluntary basis) by the provider; or – an individual: • who is employed or otherwise engaged (including on a voluntary basis) by a contractor or

subcontractor of the provider; and • who provides care or other services to the care recipients provided with aged care through an aged care service of the provider.

• governing person of an approved provider means an individual who is one of the key personnel of the provider under paragraph 8B(1)(a) or (b) [of the ACQSC Act].

Proposed section 74AH of the ACQSC Act, at Item 8 of Schedule 2, will make it an offence for an approved provider that is a corporation to fail to comply with Item 1.

Aged care screening law Item 4 will insert proposed section 7A into the ACQSC Act, which provides the Minister, by legislative instrument, the power to determine a law of a State or Territory to be an aged care screening law. Before this can be done, the Minister must be satisfied that the law establishes a scheme for screening aged care workers and governing persons of approved providers and the State or Territory must agree to the making of the determination.

Item 3 will introduce a number of additional definitions into the ACQSC Act, including the different decisions that may be made under an aged care screening law, the four decision types are:

• clearance decision – a decision to the effect that an individual who is, or is seeking to become, an aged care worker or governing person of an approved provider does not pose a risk to care recipients

• exclusion decision – a decision to the effect that an individual who is, or seeking to become, an aged care worker or governing person of an approved provider poses a risk to care recipients

• revocation decision – a decision that revokes a clearance or exclusion decision

• suspension decision – a decision that suspends a clearance decision.

90. For example: HSU, Submission to Senate Community Affairs Legislation Committee, op. cit., p. 8.

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Disclosure of protected information Section 61 of the ACQSC Act identifies when and to whom the Safety Commissioner may disclose protected information. Proposed paragraph 61(1)(ib), at item 6 of Schedule 2, will permit the Commissioner to disclose protected information to a person or body performing functions or exercising powers under, or for the purposes of, an aged care screening law if the Commissioner believes on reasonable grounds that the information will assist in the performance of those functions or the exercise of those powers.

Proposed section 61A, at item 7, will enable the Safety Commissioner to disclose protected information contained in the Aged Care Screening Database to:

• an approved provider or contractor for screening an individual who is or is seeking to become an aged care worker or governing person of that provider

• a registered NDIS provider91 or another person or body for purposes related to the screening of a worker employed or engaged (including on a voluntary basis), or seeking to become employed or engaged, by the provider or the other person or body

• to the NDIS Quality and Safeguards Commissioner to assist them in the performance of their functions or the exercise of their powers

• to people or bodies who perform functions or exercise power under an aged care screening law to assist them in performing those functions or exercising those powers

• to people or bodies who are specified in the rules to assist them in fulfilling activities specified in the rules.

This proposed inclusion, alongside proposed section 74AI outlined below, will improve information sharing on workers and, in the case of aged care, governing persons between the aged care and disability sectors by sharing information from the screening databases for potential and existing employees and contractors.

Aged Care Screening Database Item 8 will insert new Part 8AB – Screening of aged care workers, and governing persons, of approved providers into the ACQSC Act consisting of proposed sections 74AF to 74AI.

Proposed subsections 74AG(1) and (2) will require the Safety Commissioner to establish, operate and maintain an electronic Aged Care Screening Database.

The Aged Care Screening Database will have two identified purposes with the opportunity for additional purposes to be added by the Minister by legislative instrument (proposed subsection 74AG(8)). The two purposes are:

• to contain up-to-date information on people who have applied for a screening check and the outcome of the application (proposed paragraph 74AG(3)(a))

• to contain up-to-date information on the decisions made, including the four decision types to be inserted into section 7 (outlined above) and any other decision type made under an aged care screening law (proposed paragraph 74AG(3)(b)).

Proposed subsection 74AG(5) outlines the information that may be captured in the Aged Care Screening Database, including information on the approved provider that employs or engages an applicant or a person for whom a decision has been made (for example, a clearance decision or an

91. Not all NDIS providers are required to be registered NDIS providers and instead can operate as ‘unregistered NDIS providers’. The National Disability Insurance Scheme Act 2013 outlines why a provider may need to be registered and the process to obtain registration from the NDIS Quality and Safeguards Commission, whose responsibilities include assessing applications to become a registered NDIS provider. People working for unregistered providers are not required to undergo an NDIS worker screening check.

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exclusion decision). In addition, the Minister may, by legislative instrument, add additional items to this list (proposed subsection 74AG(8)).

Amendment to the NDIS worker screening database Proposed section 74AI of the ACQSC Act will insert an additional purpose into the NDIS worker screening database, under subsection 181Y(3) of the National Disability Insurance Scheme Act 2013, which will enable the sharing of information from that database with:

• an approved provider or contractor of the approved provider for purposes related to screening an individual who is, or is seeking to be, an aged care worker or governing person of an approved provider

• the Safety Commissioner to assist them in performing their functions or exercising their powers

• the Secretary of the Department of Health to assist them in performing their functions or exercising their power under the Act.

Code of Conduct (Schedule 3)

Brief overview Schedule 3 will make amendment in two Acts:

• Aged Care Act 1997 (the Act)

• Aged Care Quality and Safety Commission Act 2018 (ACQSC Act).

Schedule 3 will make two changes to the Act, with the insertion of new responsibilities for approved providers to reflect the introduction of the Code of Conduct and the addition of new definitions.

The Code of Conduct itself will be made in new rule/s with the Safety Commissioner being responsible for the Code functions. The proposed changes to the ACQSC Act will allow for the Code of Conduct to apply to three groups:

• approved providers

• aged care workers of approved providers

• governing persons of approved providers.

The changes to the ACQSC Act will extend the Safety Commissioner’s powers to include provisions to allow investigation and enforce compliance, including the ability to impose banning orders and may include penalties for contravening the Code of Conduct. The Safety Commissioner will be able to impose banning orders on governing persons and aged care workers of approved providers. A banning order could restrict or prohibit the person from providing specific or all types of care and/or engaging in specific activities associated with their role. The Safety Commissioner will be required to establish a register of banning orders that specifies information relating to each individual with a banning order against them. It will be an offence to breach a banning order.

In a similar manner to the worker screening arrangements, the Code of Conduct will not apply to aged care service providers or employees who deliver programs established outside of the Act.

Stakeholders have raised several concerns about the introduction of the Code of Conduct, with some suggesting it should be delayed to allow for robust consultation with the sector. In particular there are concerns about procedural fairness and people’s right to privacy.92 The right to privacy

92. For example, see the AACC Submission to Senate Community Affairs Legislation Committee, op. cit., p. 6.

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has also been raised by the Parliamentary Joint Committee on Human Rights, especially as many of the details of the Code of Conduct will be established in the rules.93

Approved provider responsibilities expanded Item 1 will introduce proposed paragraphs 54-1(1)(g) and (ga) of the Act, expanding on the list of responsibilities of approved providers under Part 4.1 – Quality of Care. These new, proposed responsibilities will require an approved provider to comply with the Code of Conduct and to take reasonable sets to ensure their aged care workers and governing persons comply with the code.

Functions and powers of the Safety Commissioner extended Item 9 will introduce proposed section 18A—Code functions of the Commissioner into the ACQSC Act, with the Safety Commissioner having a new function to deal with information they are provided with in relation to failure of any of the below groups to comply with the Code of Conduct:

• an approved provider

• an aged care worker of an approved provider

• a governing person of an approved provider.

In addition, the Commissioner will be required to comply with anything else that is specified in the rules.

Code of Conduct Item 11 will insert proposed Part 8AA–Code of Conduct into the ACQSC Act. Proposed section 74AE will allow for the Code of Conduct to be provided in the rules in relation to the three groups outlined above. The rules may specify for a provision of the Code of Conduct to apply to any or all of these groups or to the following:

• specified kinds of aged care workers of approved providers

• aged care workers of specified kinds of approved providers

• specified kinds of governing persons of approved providers

• governing persons of specified kinds of approved providers.

Proposed section 74AB will make it an offence for an approved provider that is a corporation to contravene the provisions of the Code of Conduct. The penalty for this offence is 250 penalty units (currently $55,500).94

Proposed sections 74AC and 74AD, respectively, will require aged care workers and governing persons to comply with the Code of Conduct. Breaches of this requirement will allow for civil penalties to be imposed of up to 250 penalty units (currently $55,500).

Enforcement and compliance Item 22 will insert a new provision that allows the Safety Commissioner to issue a compliance notice to an approved provider (proposed subsection 74EE(1AA) of the ACQSC Act). This subsection will enable the Commissioner to give the approved provider the notice if the Commissioner is satisfied that the provider is not complying with their responsibilities (see Item 1) or is aware of information that suggests the provider is not complying with these responsibilities.

93. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, op. cit., p. 6. 94. The value of a penalty unit is currently $222. See section 4AA of the Crimes Act 1914 and the Notice of Indexation of the Penalty Unit Amount.

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Similar to section 74F of the ACQSC Act, which allows the Safety Commission to issue notices for people to provide information or documents and/or answer questions on whether an approved provider has complied with their responsibilities, proposed section 74FA will give the Commissioner the power to issues notices that would require people to attend a meeting with an authorised officer to answer questions or give information or documents relevant to whether an aged care worker or governing person has complied with the Code of Conduct. The person to whom the notice is issued may commit an offence if they fail to comply with the requirements outlined in the notice. The notice is required to give the person at least 14 days’ notice on the day and time they are required to attend. The person is entitled to be paid reasonable compensation by the Commonwealth for giving the requested documents.

Banning orders Item 25 will insert a new division at the end of Part 8A of the ACQSC Act, proposed Division 4– Banning orders, consisting of proposed sections 74GB to 74GI.

Proposed subsections 74GB(1) and (2) will allow the Safety Commissioner to make a banning order against a current or former aged care worker or governing person that prohibits or restricts that person from being involved in the provision of all or specific types of aged care or from engaging in specific activities of an aged care worker or governing person. The Commissioner is only able to do this if they reasonably believe that:

• the individual has not, is not or will not comply with a provision of the Code of Conduct

• the person is not suitable to be involved in the provision of some or all types of aged care or specific activities relating to their role

• there is an immediate or severe risk to the safety, health or well-being of one or more care recipients if the individual continues to be engaged their role or in the provision of care

• the individual has been convicted of an indictable offence involving fraud or dishonesty, or

• the individual is an insolvent under administration.

Proposed subsection 74GB(3) will allow the Commissioner to make a banning order against an individual who has not previously been an aged care worker or governing person that will prohibit or restrict that person from being involved in the provision of all or specific types of aged care or from engaging in specific activities of their prospective role.

Proposed subsection 74GA(5) will require the Commissioner to consider the ‘suitability matters’ in relation to the individual (discussed under Schedule 5).

Proposed section 74GC will apply to a person who has had a banning order made against them. A banning order may:

• apply generally or be of limited application

• be permanent or for a specific period of time

• be subject to specified conditions.

The banning order continues to have effect even if the individual ceases to be an aged care worker or a governing person.

The Safety Commissioner is required to give the individual a written notice that includes specified information outlined in proposed subsection 74GC(4) and includes how the person may apply for the decision to be reconsidered. If the individual is employed or engaged by an approved provider at the time the notice is given, then the Commission must also provide a copy of the notice to the provider.

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Proposed section 74GD will make it an offence for an individual to breach the banning order. Breaches will allow for civil penalties to be imposed of up to 1,000 penalty units ($222,000). In addition, if an approved provider is a corporation and they fail to take reasonable steps to ensure an individual does not engage in conduct that would breach the banning order, civil penalties may be imposed of up to 1,000 penalty units (currently $222,000). 95

Proposed section 74GE will require the Safety Commissioner to notify an individual that the Commissioner is considering making a banning order. However, if the Commissioner believes there is immediate and severe risk if the banning order is delayed, this notification is not required. The notice must set out why a banning order is being considered and invite the individual to make a submission to the Commissioner, which the Commissioner must consider.

Variation or revocation of a banning order Proposed section 74GF will allow the Safety Commissioner to, on their own initiative, vary or revoke a banning order. Should the Commissioner decide to this, they are required to notify the person in writing as soon as practicable. This notice must include information on how the individual can apply for a reconsideration of the decision. The Commissioner must also provide a copy of the notice to the approved provider the individual is employed or engaged with.

The individual may make an application to the Commissioner requesting the banning order be varied or revoked (proposed section 74GG). If the Commissioner proposes not to change or revoke the banning order, they will be required to notify the person in writing and invite them to make a submission on this matter. The Commissioner must provide their decision to the individual in writing as soon as practicable. If the Commissioner decides not to revoke or vary the banning order, the notice to the individual must outline how the individual can apply for reconsideration of the decision.

In a similar manner to proposed section 74GG, proposed section 74GH provides for the individual to apply to the Commissioner to request a condition to which the banning order is subject to be varied or revoked.

Register of banning orders Proposed section 74GI will require the Safety Commissioner to establish and maintain a register that includes specified information on each individual who is, or has been, subject to a banning order. Additional requirements or matters may be specified in the rules.

Incident management and reporting (Schedule 4)

Brief overview Schedule 4, which will extend the incident management and reporting requirements outside of residential aged care, will amend two Acts:

• Aged Care Act 1997 (the Act)

• Aged Care Quality and Safety Commission Act 2018 (ACQSC Act).

The amendments introduced to the Act will introduce new responsibilities for all approved providers (i.e. including home and flexible care providers) to manage incidents through an incident

95. The value of a penalty unit is currently $222. See section 4AA of the Crimes Act 1914 and the Notice of Indexation of the Penalty Unit Amount.

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management system that meets the requirements outlined in the Quality of Care Principles 2014. In addition, approved providers will be required to report incidents to the Safety Commissioner.

The amendments that will be introduced to the ACQSC Act will expand the Commissioner’s powers to enable them to respond to incidents reported by Commonwealth grant funded aged care services (for example, CHSP services). It will also allow the service providers to collect and disclose information as it relates to their obligations under the Serious Incident Response Scheme for the purposes of the Privacy Act 1988.

Amendments to the Act The main amendments to the Act will be through omitting specific reference to residential care and thus expanding the responsibilities to include all approved providers.

Section 54-1 of the Act outlines the responsibilities of approved providers for quality of care. Paragraph 54-1(1)(e) currently places a responsibility of approved providers providing care in a residential setting to manage incidents and take reasonable steps to prevent incidents, including through the use of an incident management system that complies with the Quality of Care Principles. Item 1 will remove the reference to residential care in paragraph 54-1(1)(e) and instead will make this a responsibility for all approved providers regardless of setting.

Section 54-3 provides the definition of a reportable incident and provides for the Quality of Care Principles to deal with incident reporting, actions that must be undertaken and the authorisation to provide information relating to the reportable incident to specific roles or bodies. Items 2 – 7 will result in the omission of references to the residential setting and shifting to ‘care recipients’ instead of residential care recipients.

Item 9 specifies that incident management, as it relates to these amendments, applies to incidents that occur, or are alleged or suspected to have occurred, on or after 1 July 2022.

Amendments to the ACQSC Act Item 10 will repeal the existing definition of ‘reportable incident’, which references the definition in the Act, and instead define reportable incident as:

• for an approved provider – a reportable incident within the meaning of the Act

• for a service provider of a Commonwealth-funded aged care service – an incident that is a reportable incident under the funding agreement that relates to the service.

Division 2 of Part 3 of the ACQSC Act focuses on the functions and powers of the Safety Commissioner. Section 21 under this Division allows for rules to be made that impact the function of the Commissioner. Item 14 will insert a new subsection into section 21, proposed subsection 21(8), which will allow rules to be made on how the Commissioner deals with a reportable incident for a service provider of a Commonwealth-funded aged care service. This may include how the Commissioner deals with reportable incidences and requirements of the service provider.

Item 15 will insert a new division, Division 5 – other matters, at the end of Part 7. Proposed section 63AA will authorise service providers to collect, use and disclose sensitive information (as defined under the Privacy Act) in particular circumstances in which the service provider has a responsibility in their funding agreement to manage and report incidents and take steps to prevent future incidents.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 34

Governance of approved providers (Schedule 5)

Brief overview Schedule 5, consisting of two Parts, will introduce new governance measures for approved providers, and will amend two Acts:

• Aged Care Act 1997 (the Act)

• Aged Care Quality and Safety Commission Act 2018 (ACQSC Act).

The amendments to the Act will introduce new responsibilities for all approved providers, including:

• changes to the key personnel requirements

• membership of provider governing bodies

• establishment of a quality care advisory body

• establishment of a consumer advisory body, if the care recipients or their representatives of the service would like one set up

• provision of an annual statement to the Secretary

• changes to the constitution of approved providers that are wholly-owned subsidiary corporations under the Corporations Act 2001 or the Corporations (Aboriginal and Torres Strait Islander) Act 2006.

Additional amendments will be introduced under the ACQSC Act, which include the meaning of ‘suitability matters’ in relation to an individual (as it will relate to the key personnel requirements).

Part 2 of Schedule 5 will introduce the application and transitional provisions.

Stakeholders have made several recommendations to amend Schedule 5, with a particular focus on the governing and advisory bodies. Some stakeholders have questioned whether a more responsive approach should be considered for the governance requirements, rather than the relatively arbitrary number of 40 care recipients.96 In addition, some consumer stakeholders have expressed disappointment in the proposed optional arrangements for a consumer advisory body.97

Changes to key personnel requirements Subsection 9-1(1) of the Act provides an obligation for approved providers to inform the Safety Commissioner of material changes to their key personnel that may affect the provider’s suitability to provide aged care within 28 days. Item 1 will modify this so that providers will need to inform the Commissioner within 14 days.

Item 6 will insert a new section, proposed section 9-2A, which outlines the circumstance under which a provider will be required to notify the Commissioner of changes relating to their key personnel. Proposed subsection 9-2A(1) identifies specific events of which the provider must notify the Commissioner:

• a person becomes key personnel of the provider

• a person ceases to be key personnel of the provider

96. For example, see the ACN Submission to Senate Community Affairs Legislation Committee, op. cit., p. 4; and the AACC Submission to Senate Community Affairs Legislation Committee, op. cit., p. 8. 97. OPAN, Submission to Senate Community Affairs Legislation Committee, op. cit., p. 6.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 35

• the provider becomes aware of a change in circumstance that may relate to a ‘suitability matter’ (discussed below) of one of the key personnel of the provider.

This proposed subsection includes a note that specifies this is a responsibility of the approved provider and failure to comply may result in a sanction being imposed.

Item 8 inserts a new obligation for the approved provider to provide information to the Commissioner upon request, relating to the suitability of an individual to be one of the provider’s key personnel. This request must be made in writing.

Item 12 will repeal section 10A-2, which currently provides offences when a disqualified individual is one of an approved provider’s key personnel, and insert four proposed sections. This change, in part, is in response to a move towards determining the suitability of key personnel rather than the existing disqualified individual arrangements.

Proposed section 10A-1 will require an individual who is one of the key personnel to an approved provider to notify the provider if that person becomes aware of a change in their circumstances that relates to a suitability matter. Failure to notify the provider in the prescribed manner can result in the individual committing an offence of strict liability. The penalty for this offence is 30 penalty units (currently $6,660).98

Item 26 will insert proposed section 8C into the ACQSC Act, which will introduce the meaning of ‘suitability matters’ in relation to an individual. This list of matters includes:

• the individual’s experience in providing aged care or other relevant forms of care

• whether a civil penalty order against the individual has been made

• whether an NDIS banning order against the individual is, or previously has been, in place.

In addition:

• Item 5 of Schedule 2 will insert proposed paragraph 8C(1)(ab), which will add another matter to consider: if an exclusion decision, a suspension decision or a revocation decision revoking their clearance has been made against the individual.

• Item 6 of Schedule 3 will insert proposed paragraph 8C(1)(aa), whether a banning order has been or is in place against the individual.

Item 12 of Schedule 5 will insert proposed section 10A-2 into the Act, which relates to determining the suitability of key personnel. Proposed subsections 10A-2(1) and (2) will allow the Safety Commissioner to make a determination that a key personnel of a provider that is a corporation, is not suitable to be involved in the provision of aged care. In making this determination, the Commissioner must consider the suitability matters. Before the Commissioner can make the determination, they must notify the individual and the provider that they are considering making the determination and identify, among other things, the reason(s) why they are considering this course of action and invite the individual and provider to make submissions on this matter (proposed subsections 10A-2(4) and (5)). If the Commissioner decides to make a determination, they must notify the individual and the provider within 14 days (proposed subsection 10A-2(7)). The provider may request this decision to be reconsidered.

Proposed section 10A-2A will make it an offence if an approved provider, who is a corporation, fails to take the actions specified in the notice of determination within the specified timeframe. This proposed section includes a note clarifying that section 4K of the Crimes Act 1914, which deals with continuing and multiple offences, will apply to this proposed offence. The maximum

98. The value of a penalty unit is currently $222. See section 4AA of the Crimes Act 1914 and the Notice of Indexation of the Penalty Unit Amount.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 36

penalty for this offence is 300 penalty units (currently $66,600). As it is a continuing offence, the corporation commits an offence in respect of each day during which it refuses or fails to take the action specified in the notice after the period specified in the notice has expired.99 A separate penalty may be imposed for each offence.100

Proposed section 10A-2B will make it an offence if a corporation who is an approved provider fails to comply with their responsibility, under proposed subparagraph 63-1A(a)(i) (at item 15 of Schedule 5), to consider suitability matters in relation to key personnel. The penalty for this offence is also 300 penalty units (currently $66,600).

Current section 63-1A of the Act provides a responsibility for approved providers to take all reasonable steps, as outlined in the Accountability Principles 2014, to ensure that none of their key personnel are disqualified individuals. Item 15 will repeal and replace this section, introducing new responsibilities for approved providers around the suitability of their key personnel, including a requirement for the provider to consider, at least once every 12 months, the suitability matters as they relate to the individual in accordance with any requirements identified in the Accountability Principles. If a provider fails to do this, the provider may commit an offence, as outlined in proposed section 10A-2B.

Governing and advisory bodies Item 16 will insert five new sections into the Act after section 63-1C that introduce new responsibilities for approved providers.

Proposed section 63-1D will introduce new responsibilities for most approved providers, other than approved providers who are a state, territory or local government authority, to establish a governing body and advisory bodies. Item 19 will insert the new definition of governing body of an approved provider, which will mean:

• in instances where the provider is a body corporate incorporated, or taken to be incorporated, under the Corporations Act 2001 – the board of directors for the provider

• otherwise, the group of persons responsible for the executive decisions of the provider.

Approved providers will be required to ensure that their governing body has a majority of independent, non-executive members and at least one member has experience in the provision of clinical care (proposed subsection 63-1D(2)). The requirement to have a majority of independent non-executive members will not apply to smaller services with small (less than five) members of their governing bodies and who have less than 40 care recipients (proposed subsection 63-1D(3) from the Government’s proposed amendments to the Bill).101 Approved providers will be able to apply for a determination from the Commissioner that these responsibilities not apply under proposed section 63-1E. The determination may be varied or revoked by the Commissioner at their own initiative (proposed section 63-1F).

Proposed subsection 63-1D(5) will require the approved provider to establish and continue a quality care advisory body, that complies with the membership requirements outlined in the Accountability Principles and, at least once every six months, provides a written report on the quality of the care delivered within the service to the governing body. In addition, the advisory group is able to provide feedback to the governing body on the quality of care at any time. The

99. Subsection 4K(2) of the Crimes Act 1914. 100. Ibid., subsection 4K(4). 101. Amendment (10) of the Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, Government amendment, sheet ZB120, House of Representatives, 25 October 2021.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 37

governing body is required to consider the report and/or feedback and provide written advice on how they considered the report or feedback.

Proposed subsection 63-1D(7) will require the approved provider to offer, at least once every 12 months, care recipients and their representatives the opportunity to establish a consumer advisory body, which would give feedback to the governing body on the quality of the care and services. The governing body would be required to consider all feedback received and provide a written response on how it considered the feedback to the consumer advisory body.

Staff qualifications and experience Under section 54-1 of the Act, which sets out the responsibilities of approved providers in relation to quality of care, approved providers are required to comply with the Aged Care Quality Standards (Standards), which are made under section 54-2. The Standards themselves are set out in the Quality of Care Principles 2014. Standard 7 has a human resources focus and includes the following requirements:

• the workforce is competent and members of the workforce have the qualifications and knowledge to effectively perform their roles

• the workforce is recruited, trained, equipped and supported to deliver the outcomes required by the Standards.102

Proposed subsection 63-1D(9) will build on these requirements and will introduce an additional responsibility for the approved provider to require the governing body to ensure that the provider’s staff:

• have appropriate qualifications, skills or experience to provide the care and/or services offered by the provider

• are given the opportunity to develop their capability to provide care and services.

According to the Explanatory Memorandum, the intent behind this inclusion is to enhance a consumer-focused culture through a top-down approach, with good leadership required to provide safe, high-quality care. The governing body will need to ensure staff have appropriate qualifications, experience and attributes to successfully fulfil their roles, including the management team(s). In addition, providing staff with opportunities to undertake continuing professional development may assist in improved performance, commitment and retention rates.103

Annual statement Proposed section 63-1G will introduce a requirement for an approved provider to prepare an annual statement (of a 12 month period) that meets the requirements outlined in the Accountability Principles 2014 and to provide a copy of this statement to the Secretary within four months of the end of the reporting period. The Explanatory Memorandum provides a list of proposed items for inclusion, which include:

• details of key personnel

• information on staffing

• financial information

• complaints.

102. Quality of Care Principles 2014, Schedule 2, 7(3)(c) and (d). 103. Explanatory Memorandum, op. cit. p. 95.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 38

In addition, ‘an Information Technology solution is being considered to prevent duplication where information is reported elsewhere’.104

Proposed section 86-10 of the Act, at item 17 of Schedule 5, will require the Secretary to make this annual statement publicly available but that does not include personal information about an individual, with the exception of an individual who is one of the key personnel of the provider.

Constitution of providers that are wholly-owned subsidiary corporations Proposed section 63-1H will impact corporations under two different Acts, the Corporations Act 2001 and the Corporations (Aboriginal and Torres Strait Islander) Act 2006. If a provider is a wholly-owned subsidiary of another corporation (the holding company) under either of these Acts and the holding company is not an approved provider, it is the responsibility of the approved provider to ensure its constitution does not authorise a director of the provider to act in the best interests of the holding company. Different concerns have been raised in the media on this issue which identify different ways specific holding companies have, for example, charged the approved provider ‘management fees’ or inflated rents.105

Part 2 Part 2 of Schedule 5 provides clarification on the commencement dates of several amendments, in some instances differing between existing and new providers. In addition, Item 42 will enable the Minister to make transitional rules, including ‘prescribing any saving or application provisions’ relating to the amendment of section 10A-3.

Information sharing (Schedule 6) According to the Explanatory Memorandum, the amendments in Schedule 6 represent the ‘first step toward broader regulatory alignment across the care and support sector aimed at providing consistent quality and safety protections for consumers.’106 Enhanced transparency and accountability may be achieved by amendments designed to enable greater ease of and increased ‘information sharing [including of personal information as defined under the Privacy Act 1998107] between Commonwealth bodies across the aged care, disability and veterans’ affairs sectors in relation to non-compliance of providers and their workers.’108 Commonwealth bodies to which these information sharing amendments will apply include:

• the Department of Health

• the Aged Care Quality and Safety Commission

• the Department of Veterans’ Affairs

• the Military Rehabilitation and Compensation Commission and

• the Repatriation Commission.109

However, other Commonwealth bodies may be also prescribed in a legislative instrument. Protected information can only be shared if the shared information will assist receiving

104. Ibid., p. 98. 105. A McGhee, ‘Greek Orthodox Church took tens of millions in rent from aged care homes at centre of deadliest COVID outbreak’, ABC, (online edition), updated 9 September 2021; C Maskell-Knight and J Doggett (ed.), ‘Aged care reform: improving the transparency and accountability of funding’, Croakey, 21 April 2021.

106. Explanatory Memorandum, op. cit., p. 108. 107. However, limits are placed on this information sharing insofar as the information is subject to the existing secrecy provisions as protected information under the relevant legislation, including limitations on secondary disclosure. These limitations are designed to balance the right to privacy of individuals.

108. Explanatory Memorandum, op. cit., p. 108. 109. Ibid.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 39

Commonwealth bodies (who have functions or powers in relation to the care and support sector) to carry out their regulatory, oversight, compliance or enforcement functions.110

Schedule 6 will amend five Acts:

• Aged Care Act 1997 (the Act)

• Aged Care Quality and Safety Commission Act 2018 (ACQSC Act).

• Military Rehabilitation and Compensation Act 2004 (the Military Rehabilitation Act)

• Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (the Defence-related Claims Act)

• Veterans’ Entitlements Act 1986.

Part 1—Amendments Aged Care Act

Permitted Disclosure of Protected information Division 86 of the Aged Care Act deals with the ‘Protection of information’. Subsection 86-3(1) of the Act lists the circumstances under which the Secretary of the Department may disclose protected information.111

Proposed paragraph 86-3(1)(cd) expands the Secretary’s ability to share protected information with other Commonwealth bodies if the Secretary believes, on reasonable grounds, that the information will assist in the performance of the functions, or the exercise of the powers, of a receiving Commonwealth body.

The Explanatory Memorandum states that this amendment ‘is designed to enable the receiving Commonwealth body to proactively identify, assess and respond to risks to those receiving care, support or treatment.’112 [emphasis added]

Current subparagraph 86-3(1)(f)(i) of the Aged Care Act provides that the Secretary may disclose protected information to a professional body if the Secretary believes, on reasonable grounds:

that a person’s conduct breaches the standards of professional conduct of a profession of which the person is a member. [emphasis added]

Item 2 amends subparagraph 86-3(1)(f)(i) to insert the words ‘or may breach’ after the word ‘breach’, empowering the Secretary to be proactive in ‘disclos[ing] protected information to such a

110. Aged Care Act 1997, proposed paragraph 86-3(1) (cd), at item 1 of Schedule 6; Aged Care Quality and Safety Commission Act 2018, proposed paragraph 61(1)(da), at item 4 of Schedule 6. 111. Section 86-1 of the Aged Care Act provides that protected information means information that: (a) was acquired under or for the purposes of the Act or the Aged Care (Transitional Provisions) Act 1997; and (b) either:

– is personal information (which has the same meaning as in the Privacy Act 1998, where it is defined as ’Information or an opinion about an identified individual, or an individual who is reasonably identifiable: (a) whether the information or opinion is true or not, and (b) whether the information or opinion is recorded in a material form or not’.)

– relates to the affairs of an approved provider, or – relates to the affairs of an applicant for a grant under Chapter 5 (certain Commonwealth grants). 112. Explanatory Memorandum, op. cit., p. 108.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 40

body where the Secretary believes on reasonable grounds that the person’s conduct may breach a standard of professional conduct.‘113

The Explanatory Memorandum states that this amendment is intended to apply in circumstances

where the Secretary may not necessarily be in a position to form a reasonable belief that the standards have been breached because that is an assessment that is ordinarily conducted by the professional standards body.114

Proposed paragraphs 86-3(4)(a)-(g) define the term receiving Commonwealth body to mean any of the following:

• Aged Care Quality and Safety Commission

• Military Rehabilitation and Compensation Commission

• National Disability Insurance Scheme Launch Transition Agency

• NDIS Quality and Safeguards Commission

• Repatriation Commission

• the Department administered by the Minister administering the Disability Services Act 1986

• the Department administered by the Minister administering the Veterans’ Entitlements Act 1986.

The definition also makes provision for other Commonwealth bodies to be prescribed in the Information Principles 2014, which is intended to enable information sharing with other departments and authorities that have powers or functions related to the care and support sector.115

The Explanatory Memorandum states that these amendments are intended to facilitate:

broader information sharing among Commonwealth bodies in relation to the performance of providers and workers in the care and support sector, including where there is concern regarding their conduct and the services being provided.116

Aged Care Quality and Safety Commission Act 2018

Subsection 61(1) of the ACQSC Act sets out the circumstances under which the Aged Care Quality and Safety Commissioner (Commissioner) may disclose protected information. Proposed paragraph 61(1)(da), at item 4 of Schedule 6, provides that the Commissioner may disclose protected information under the Act to a receiving Commonwealth body, where the Commissioner believes on reasonable grounds that the information will assist in the performance of functions or the exercise of the powers of that body.117

113. Ibid., p. 109. 114. Ibid. 115. Aged Care Act 1997, proposed paragraph 86-3(4)(h), at item 3 of Schedule 6. 116. Explanatory Memorandum, op. cit., p. 109. 117. Proposed paragraphs 61(3)(a)-(f) of the ACQSC Act (item 7 of Schedule 6) defines the term receiving Commonwealth body to

mean any of the following: • Military Rehabilitation and Compensation Commission • National Disability Insurance Scheme Launch Transition Agency • NDIS Quality and Safeguards Commission • Repatriation Commission • the Department administered by the Minister administering the Disability Services Act 1986

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 41

Current subparagraph 61(1)(f)(i) of the ACQSC Act provides that the Commissioner may disclose protected information to certain Commonwealth bodies if the Secretary believes, on reasonable grounds,

that a person’s conduct breaches the standards of professional conduct of a profession of which the person is a member. [emphasis added]

Item 5 of Schedule 6 amends subparagraph 61(1)(f)(i) to insert the words ‘or may breach’ after the word ‘breach’ empowering the Commissioner to be proactive in ‘disclos[ing] protected information to such a body where the Secretary believes on reasonable grounds that the person’s conduct may breach a standard of professional conduct’.118

The Explanatory Memorandum states that this amendment is intended to apply in circumstances

where the Commissioner may not necessarily be in a position to form a reasonable belief that the standards have been breached because that is an assessment that is ordinarily conducted by the professional standards body.119

This amendment mirrors the amendment to subparagraph 86-3(1)(f)(i) of the Aged Care Act, at item 2 of Schedule 6, discussed above.

Sharing information for complaints handling or provision of health or community services Proposed paragraph 61(1)(ia) provides that the Commissioner may disclose protected information if, under a law of a State or Territory, a person or body has function(s), that include dealing with complaints or information about the provision of health or community services by a person or body, and the Commissioner believes, on reasonable grounds, that the information will assist in the performance of that function.

Military Rehabilitation and Compensation Act 2004

Proposed table item 2D in subsection 409(2) of the Military Rehabilitation and Compensation Act 2004 (the Military Rehabilitation Act) enables the Military Rehabilitation and Compensation Commission (MRCC) (or a staff member assisting the MRCC) to provide information obtained in the performance of their duties under the Military Rehabilitation Act to a receiving Commonwealth body for a purpose relating to the performance of a function, or the exercise of a power, by that body.

This aligns with the corresponding amendments in this Schedule discussed above,120 and is underpinned by the same rationale in terms of information sharing for the purposes of enhancing monitoring, enforcement and regulation relating to the care and support sector.121

Proposed subsection 409(2A) provides that if a person is entitled to treatment under the Military Rehabilitation Act

• the Department administered by the Minister administering the Veterans’ Entitlements Act 1986. The definition also makes provision for an additional Department of State, or another authority, of the Commonwealth to be prescribed in the rules, but only where the prescribed authority or Department has regulatory, compliance or enforcement functions in relation to the provision of care, support, treatment or other related services or assistance (proposed paragraph

61(3)(g)).

118. Explanatory Memorandum, op. cit., p. 110. 119. Ibid. 120. Aged Care Act, proposed paragraph 86-3(1)(cd) at item 1; Aged Care Quality and Safety Commission Act 2018, proposed paragraph 61(1)(da) at item 4.

121. Explanatory Memorandum, op. cit., p. 112.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 42

• and the treatment is provided to the person through an arrangement (including a contractual arrangement) with a body that is not a corporate Commonwealth entity or a non-corporate Commonwealth entity) 122

• then the Commission (or a staff member assisting the Commission) may provide any information relating to that treatment to a receiving Commonwealth body for a purpose relating to the performance of a function, or the exercise of a power, by that body.123

Safety, Rehabilitation and Compensation (Defence Related Claims) Act 1988

Item 11 of Schedule 6 would insert proposed table item 7 in subsection 151A(1) of the Safety, Rehabilitation and Compensation (Defence-related Claims) Act 1988 (the Defence-related Claims Act, to enable the Military Rehabilitation and Compensation Commission (MRCC) (or a staff member assisting the MRCC) to provide information obtained in the performance of their duties under the Defence-related Claims Act to a receiving Commonwealth body for a purpose relating to the performance of a function, or the exercise of a power, by that body.124

This aligns with the corresponding amendments in this Schedule discussed above,125 and is underpinned by the same rationale in terms of information sharing for the purposes of enhancing monitoring, enforcement and regulation relating to the care and support sector.126

Proposed subsection 151A(1C) enables the MRCC (or a staff member assisting the MRCC) to provide information relating to the provision of treatment to a receiving Commonwealth body for a purpose relating to the performance of a function or the exercise of a power of that body if:

• a person who is, or was, an employee is entitled to compensation for medical treatment under the Defence-related Claims Act and

• the treatment is provided to the person through an arrangement, including a contractual arrangement, with a body that is not a corporate Commonwealth entity or a non-corporate Commonwealth entity.127

The Explanatory Memorandum states the amendment reflects the practical reality ‘that veterans’ care is generally provided under arrangements, including contractual arrangements.’128 Accordingly, information obtained under these arrangements is permitted to be ‘shared with

122. The terms corporate Commonwealth entity and a non-corporate Commonwealth entity have the same meaning as in the Public Governance, Performance and Accountability Act 2013. 123. Item 10 of Schedule 6 would insert a definition of the term receiving Commonwealth body into subsection 409(5) to mean any of the following:

• Aged Care Quality and Safety Commission • National Disability Insurance Scheme Launch Transition Agency • NDIS Quality and Safeguards Commission • Repatriation Commission • the Department administered by the Minister administering the Aged Care Act 1997 • the Department administered by the Minister administering the Disability Services Act 1986 • the Department administered by the Minister administering the Veterans’ Entitlements Act 1986. The definition also makes provision for an additional Department of State, or another authority, of the Commonwealth to be prescribed in the regulations, but only where the prescribed authority or Department has regulatory, compliance or enforcement functions in relation to the provision of care, support, treatment or other related services or assistance (paragraph (g) in the proposed definition of receiving Commonwealth body in subsection 409(5) of the Military Rehabilitation Act). 124. The term receiving Commonwealth body is defined in proposed subsection 151A(4), at item 14 of Schedule 6. 125. Aged Care Act, proposed paragraph 86-3(1)(cd) at item 1; Aged Care Quality and Safety Commission Act 2018, proposed

paragraph 61(1)(da) at item 4; Military Rehabilitation and Compensation Act 2004, proposed table item 2D in subsection 409(2), at item 8. 126. Explanatory Memorandum, op. cit., p. 113. 127. The terms corporate Commonwealth entity and non-corporate Commonwealth entity have the same meaning as in the Public Governance, Performance and Accountability Act 2013. 128. Explanatory Memorandum, op. cit., p. 115.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 43

receiving Commonwealth bodies for a purpose relating to the exercise of a power or performance of a function of those bodies.’129

Section 151A of the Defence-related Claims Act deals with the giving of information and provides, among other things:

(1A) The MRCC (or a staff member assisting the MRCC) may provide any information obtained in the performance of duties under this Act to the Secretary of the Defence Department for any purposes relating to:

(a) litigation involving an injury, disease or death of an employee in relation to which a claim has been made under this Act

(b) monitoring, or reporting on, the performance of the Defence Force in relation to occupational health and safety or

(c) monitoring the cost to the Commonwealth of injuries, diseases or deaths of employees, in relation to which claims have been made under this Act.

(1B) The MRCC (or a staff member assisting the MRCC) may provide any information obtained in the performance of duties under this Act to the Chief of the Defence Force for a purpose relating to the reconsideration or review under Part VI of a determination made under this Act about acceptance of liability for an injury, disease or death.

However, explicit limitations are placed on the sharing of such information by making it clear under paragraphs 151A(2)(a) and (b) that a person must not:

(a) use the information obtained under subsection (1), (1A) or (1B) for a purpose other than those purposes; or

(b) further disclose the information obtained under subsection (1), (1A) or (1B) for a purpose other than those purposes.

Item 13 replaces references to ‘(1B)’ with ‘(1B) or (1C)’ in paragraphs 151A(2)(a) and (b), to extend the scope of restrictions on use and disclosure of information to include the purposes under proposed subsection 151A(1C).

Veterans’ Entitlements Act 1986

Proposed subsection 130(2A) of the Veterans’ Entitlements Act 1986 enables the Secretary of the Department of Veterans’ Affairs (DVA) (or an officer of the Department) to provide information relating to the provision of treatment to a receiving Commonwealth body for a purpose relating to the performance of a function or the exercise of a power by that body where:

• an eligible person is entitled to treatment under Part V of the Veterans’ Entitlement Act and

• treatment is provided to the eligible person through an arrangement, including a contractual arrangement, with a body that is not a corporate-Commonwealth entity or a non-corporate Commonwealth entity.

Section 130 of the Veterans’ Entitlement Act provides rules for the furnishing of information under the Act. Subsection 130(2) states that the Secretary or another officer of the Department may provide any information obtained in the performance of his or her duties under the Veterans’ Entitlement Act to the Secretary of another Department of State of the Commonwealth or to the head of an authority of the Commonwealth for the purposes of that Department or authority.

129. Ibid.

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Subsection 130(3) makes it clear that, if information is disclosed in accordance with subsection 130(2), the disclosure is taken, for the purposes of the Australian Privacy Principles to be authorised by the Veterans’ Entitlement Act.130

Item 16 amends subsection 130(3) and adds, after reference to ‘subsection (2)’ ‘or (2A)’, so that the information disclosed under proposed subsection 130(2A) is also taken to be authorised by the Veterans’ Entitlement Act for the purposes of the Australian Privacy Principles.

The Explanatory Memorandum states

The aim of these amendments is to enable broader information sharing among Commonwealth bodies in relation to the conduct of providers and workers in the care and support sector, including where there is concern regarding their conduct and the services being provided.131

Part 2–Application provisions Item 18 provides that the disclosure or provision of information amendments made by Schedule 6 apply to authorised disclosures of information that occur on or after the commencement of the item, regardless of whether the disclosures involve information that was obtained before, on or after that commencement.

Use of refundable deposits and accommodation bonds (Schedule 7) The amendments in Schedule 7 are, in part, a response to Royal Commission Recommendation 134 which relates in part to strengthening the monitoring powers of the Prudential Regulator (DoH) for the purposes of its prudential regulation and financial oversight functions.132

According to the Minister's second reading speech, these amendments will:

enable the government to identify at-risk providers earlier, and help ensure providers meet their obligations to refund deposits to residents.133

Schedule 7 will amend two Acts:

• Aged Care Act 1997 (the Act)

• Aged Care Quality and Safety Commission Act 2018 (ACQSC Act).

Part 1 – Amendments Aged Care Act

Section 9-3B of the Aged Care Act deals with the obligation of an approved provider to give information to the Secretary or Quality and Safety Commissioner relating to the ability of the provider to refund the balance of a refundable accommodation deposit or bond.

130. Schedule 1 to the Privacy Act 1988 (Cth) sets out 13 Australian Privacy Principles (APPs), which apply to some private sector organisations, as well as most Australian Government agencies. The APPs govern standards, rights and obligations around:

• the collection, use and disclosure of personal information • an organisation or agency’s governance and accountability • integrity and correction of personal information • the rights of individuals to access their personal information

Source: Office of the Australian Information Commissioner, Australian Privacy Principles, website. 131. Explanatory Memorandum, op. cit., p. 115. 132. Royal Commission, Final Report: Care, Dignity and Respect, Volume 3B: The new system, 2021, p. 754. 133. G Hunt, ‘Second reading speech: Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021’,

House of Representatives, Debates, 1 September 2021, p. 13.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 45

Subsection 9-3B(1) of the Act currently provides that where the Secretary or Commissioner has reasonable grounds to believe that a provider has not refunded, or is unable or unlikely to be able to refund the balance of a refundable accommodation deposit or bond, is experiencing financial difficulties, or has used the balance of a refundable accommodation deposit or bond for a non-permitted purpose, then under subsection 9-3B(2) of the Act, the Secretary or Commissioner may request the approved provider to give information relating to any of the following:

a) the approved provider’s suitability to be a provider of aged care

b) the approved provider’s financial situation

c) the amount of one or more refundable accommodation deposits or bonds at a particular time

d) how refundable accommodation deposits or bonds have been used

e) the approved provider’s policies and procedures relating to managing, monitoring and controlling the use of refundable accommodation deposits and bonds

f) the roles and responsibilities of key personnel in relation to managing, monitoring and controlling the use of refundable deposits and accommodation bonds.

Requesting information or documents from a provider or borrower relating to the use of a loan made with a refundable deposit or accommodation bond ‘Information or documents’

Item 2 of Schedule 7 amends subsection 9-3B(2) by inserting ‘or documents’ after ‘information’, thus clarifying that the Secretary or Commissioner may request information or documents under subsection 9-3B(2) of the Act. This amendment is intended to:

• support oversight of the use of refundable accommodation deposits and bonds to make a loan

• assist with monitoring compliance with requirements relating to permitted uses of refundable accommodation deposits and bonds in section 52N-1.134

Both of these matters may impact on the approved provider’s financial viability.

Item 3 proposes to insert a new paragraph 9-3B(2)(da), which enables the Secretary or Commissioner to request from an approved provider, information or documents relating to ‘the use of a refundable deposit or accommodation bond by the approved provider to make a loan’.

The Explanatory Memorandum states that this amendment is designed to support monitoring of

the use of refundable accommodation deposits and bonds to make a loan, noting that such use may impact on an approved provider’s financial viability. It will also assist in monitoring compliance with the requirements relating to the permitted uses of refundable accommodation deposits and bonds in section 52N-1 of the Aged Care Act.135

Kinds of documents that can be requested Item 4 proposes to insert new subsection 9-3B(2A) setting out a non-exhaustive list of examples of the kinds of information or documents that may be specified in a request under subsection 9-3B(2), pursuant to new paragraph 9-3B(2)(da). The Explanatory Memorandum states that new subsection 9-3B(2A) ‘is not intended to limit the power under’ new paragraph 9-3B(2)(da).136 The kinds of information or documents include:

134. Explanatory Memorandum, op. cit., p. 117. 135. Ibid., pp. 117-118. 136. Ibid., p. 118.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 46

• a copy of the agreement relating to the loan that has been executed, or entered into, by the parties to the agreement

• the amount of the loan

• details of any security in respect of the loan

• details of the rate of interest payable on the loan

• evidence that the rate of interest payable on the loan has been set on a commercial basis

• details of the loan repayments

• details of any review of the loan that must or may be conducted

• details of the commercial basis of the loan

• evidence of the use of the money loaned

• a copy of the financial statements (however described) of the borrower (including any such statements that have been audited)

• details of any other conditions or terms of the loan

• any other information or documents relating to the loan.

Obligation to comply with requests for Information in ‘possession, custody or control’ of approved provider Subsection 9-3B(5) of the Aged Care Act provides an offence for approved providers who fail to comply with a request for information made under subsection 9-3B(2).

Item 16 of the Application Provisions at Part 2 of Schedule 7 provides that the amendments to section 9-3B made by Part 1 of this Schedule apply in relation to a use of a refundable deposit or accommodation bond that occurs before, on or after the commencement of this Schedule. The practical effect of this is to empower the Secretary or Commissioner to make a request for information or documents under subsection 9-3B(2) that relate to a use of a refundable deposit or accommodation bond that occurred before the commencement day.

The Explanatory Memorandum states

[t]his is appropriate to support compliance with and enable effective monitoring of the regulatory scheme relating to refundable accommodation deposits and bonds [prior to the commencement day].137

Item 8 proposes to insert new subsection 9-3B(5B) clarifying that the offence at subsection 9-3B(5) does not apply where the information or documents requested under subsection 9-3B(2) are not in the possession, custody or control of the approved provider. A note to the subsection clarifies that the approved provider bears an evidential burden in relation to the matter in this subsection in accordance with subsection 13.3(3) of the Criminal Code.

The Explanatory Memorandum states:

An evidential burden is appropriate as the offence carries a relatively low penalty and the facts relating to the exception would be peculiarly within the defendant’s knowledge and not available to the prosecution.138

137. Ibid., p. 122. 138. Ibid., p. 119.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 47

Permitted uses of refundable deposits and accommodation bonds Subsection 52N-1(1) of the Aged Care Act states that an approved provider must not use a refundable deposit or accommodation bond unless the use is permitted. Subsection 52N-1(2) specifies the permitted uses of a refundable deposit or accommodation bond.

Paragraph 52N-1(2)(c) currently enables an approved provider to use a refundable deposit or accommodation bond to make a loan where the conditions set out in five subparagraphs are satisfied:

i. the loan is not made to an individual

ii. the loan is made on a commercial basis

iii. there is a written agreement in relation to the loan

iv. it is a condition of the agreement that the money loaned will only be used as mentioned in paragraph (a) or (b)

[(a) for capital expenditure of a kind specified in the Fees and Payments Principles 2014 (No. 2) and in accordance with any requirements specified in those Principles, or

(b) to invest in a financial product covered by subsection (3) which deals with financial products (within the meaning of section 764A of the Corporations Act 2001)]

v. the agreement includes any other conditions specified in the Fees and Payments Principles

Item 10 of Schedule 7 amends subparagraph 52N-1(2)(c)(iv) to remove the reference to ‘paragraph (a) or (b)’ and substitutes it with ‘paragraph (a), (b), (d) or (e)’, thus making it a requirement that the loan only be used for one of the permitted purposes as stipulated in those paragraphs. Paragraph 52N-1(d) allows the use of a refundable deposit to refund or repay debt accrued for the purposes of refunding refundable deposit balances, accommodation bond balances or entry contribution balances. Paragraph 52N-1(e) allows a refundable deposit or accommodation bond to be used to repay debt accrued for the purposes of specified capital expenditure. The use of a refundable deposit or accommodation bond to make a loan for these purposes is permitted by paragraph 63(b)(iv) of the Fees and Payments Principles (No.2).139

The effect of this amendment is to specify that an approved provider may only loan a refundable deposit or accommodation bond if it is a condition of the loan agreement that money loaned will only be used for a permitted purpose as mentioned in paragraphs 52N-1(2)(a), (b), (d) or (e).

The effect of this amendment is to consolidate the permitted purposes specified in subparagraph 63(b)(iv) of Fees and Payments Principles 2014 (No. 2) and subparagraph 52N-1(c)(iv) of the Aged Care Act by specifying both of these permitted uses in the Aged Care Act. This will improve the clarity of the law. The Explanatory Memorandum advises that paragraph 63(b) of the Fees and Payments Principles (No. 2) will be repealed to account for this amendment.140

139. Approved providers of residential aged care are required to comply with prudential responsibilities set out in the Aged Care Act and the Fees and Payments Principles 2014 (No. 2) (the Principles), in particular: • responsibilities of approved providers (section 56-1 of the Aged Care Act) • managing refundable deposits, accommodation bonds and entry contributions (Part 3A.3 of the Aged Care Act and Parts

6 and 7 of the Principles) • the Prudential Standards (Part 3A.3 of the Aged Care Act and Part 5 of the Principles). 140. Explanatory Memorandum, op. cit., p. 119.

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Extending period of liability between misuse of refundable deposits & insolvency for providers & key personnel from two years to five years Currently, subsection 52N-2(1) of the Aged Care Act makes it an offence for a corporation (which is or has been an approved provider) to use refundable deposits or accommodation bonds for non-permitted purposes, where both of the following circumstances apply during the period of up to two years after the use of the deposit or bond:

(i) an insolvency event has occurred in relation to the corporation (within the meaning of the Aged Care (Accommodation Payment Security) Act 2006)

(ii) there has been at least one outstanding accommodation payment balance (within the meaning of that Act) for the corporation.

The maximum penalty for this offence is 300 penalty units (currently $66,600).

Subsection 52N-2(2) provides a comparable offence that applies to an individual who is or has been one of the key personnel of an approved provider, if the approved provider uses a refundable deposit or accommodation bond for non-permitted purposes. To commit the offence the individual must have known, or been reckless or negligent as to whether the deposit or bond would be used and whether that use would be permitted. The individual must also have been in a position to influence the conduct of the entity in relation to the use of the deposit or bond and have failed to take all reasonable steps to prevent the use of the deposit or bond. In addition, as with the corporate offence, the offence will only apply where, in the two years after the use of the deposit or bond, an insolvency event has occurred in relation to the corporation and there has been at least one outstanding accommodation payment balance for the corporation.

The maximum penalty for this offence is two years’ imprisonment.

Item 11 proposes to amend paragraphs 52N-2(1)(d) and (2)(g) by removing the reference to the current period of liability of ‘2 years’ and substituting ‘5 years’ as the new extended period of liability. Thus, a corporation or key personnel may be guilty of an offence if a non-permitted use is made of a refundable accommodation deposit or accommodation bond, and within five years of that use there is an insolvency event in relation to the corporation in circumstances where there has been at least one outstanding accommodation payment balance.

Item 17 of the Application Provisions in Part 2 provides that the amendment made by item 11 applies in relation to a use of a refundable deposit or accommodation bond that occurs on or after commencement day. Thus, ‘the extension of the period between a use of a deposit or bond and an insolvency event does not apply to uses that occurred before the commencement day.’141

Request to give information or documents relating to the use of a refundable deposit or accommodation bond to make a loan Item 12 will insert a proposed section 52N-3. Proposed subsection 52-N(3)(1) provides that where an approved provider has used a refundable deposit or accommodation bond to make a loan to a person (borrower) and the Secretary or Quality and Safety Commissioner believes on reasonable grounds that the borrower has information or documents relating to that use, then the Secretary or Commissioner may request the borrower provide such information or documents as are specified in the written request that are in the possession, custody or control of the borrower. Proposed subsection 52N-3(2) enumerates some of the kinds of information or documents that may be specified in a written request under proposed subsection 52N-3(1).

141. Explanatory Memorandum, op. cit., p. 122.

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Item 18 of the Application Provisions in Part 2 provides that the amendment by item 12 applies in relation to a use of a refundable deposit or accommodation bond that occurs before, on or after the commencement day, ‘even if the loan has lapsed or been repaid.’142

Proposed subsection 52N-3(5) specifies the period in which a borrower must comply with the request. While the default period is 28 days, a shorter period may be specified in the written notice to the borrower.

Proposed subsection 52N-3(6) makes it a strict liability offence for a borrower not to comply with a request made under proposed subsection 52N-3(1). The maximum penalty for this offence is 30 penalty units ($6,660).

The Explanatory Memorandum states:

It is appropriate that the prosecution does not need to prove fault for the elements of this offence, on the basis that the state of mind of the defendant is not relevant, the elements of the offence are objective, and the offence is minor and deterrent in nature. The borrower will also be placed on notice that failure to comply with a request is an offence of strict liability.143

Aged Care Quality and Safety Commission Act 2018

Subsection 74EB(1) of the ACQSC Act makes certain provisions under Part 5 of the Regulatory Powers Act 2014 subject to an infringement notice.144

Paragraph 74EB(1)(d) currently provides that an offence provision in Division 9 of the Aged Care Act (which sets out the obligations of approved providers) is subject to an infringement notice under Part 5 of the Regulatory Powers (Standard Provisions) Act 2014. Item 14 amends paragraph 74EB(1)(d) adding a reference to proposed section 52N-3 of the Aged Care Act (item 12), empowering the Commissioner to issue an infringement notice to a borrower for failing to comply with a request under proposed section 52N-3.

The Explanatory Memorandum states

This will reduce the administrative burden on the Government and the courts, as it will enable a penalty to be issued without a need to go to court.145

In practical terms, this offers ‘the person to whom the notice is issued the option to pay the fine specified in the notice in full or elect to have the offence heard by a court.’146 As a relatively minor offence, the ability to respond quickly with such a penalty is thought to act as a deterrent and support the enforcement of requests by the Commissioner.147

As the offence at proposed section 52N-3 has a maximum penalty of 30 penalty units, the maximum penalty payable under an infringement notice will be six penalty units ($1,332).148

142. Ibid. 143. Ibid., p. 121. 144. The Regulatory Powers (Standard Provisions) Act 2014 provides for a standard suite of provisions in relation to monitoring and investigation powers, as well as enforcement provisions through the use of civil penalties, infringement notices, enforceable

undertakings and injunctions. The Act commenced on 1 October 2014, but only has effect where Commonwealth Acts are drafted or amended to trigger its provisions. Source: Attorney-General’s Department, Regulatory Powers, AGD website. 145. Explanatory Memorandum, op. cit., p. 121. 146. Ibid. 147. Ibid., p. 122. 148. Subsection 104(2) of the Regulatory Powers (Standard Provisions) Act 2014.

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 50

Independent Health and Aged Care Pricing Authority (Schedule 8) Schedule 8 of the Bill is intended to respond fully or in part to Recommendations 6, 11, 115 and 139 of the Royal Commission.149

Recommendation 6: Australian Aged Care Pricing Authority

The Australian Government should establish an Aged Care Pricing Authority and confer on it all necessary functions for determining prices (inclusive of subsidies and user contributions) for specified aged care services so as to meet the reasonable and efficient costs of delivering those services. Its functions should include the function of identifying and recommending to the Australian Aged Care Commission the aged care services for which price cap determinations or other forms of economic regulation may be appropriate.150

Recommendation 11: Independent Hospital and Aged Care Pricing Authority

The legislation establishing the Independent Hospital Pricing Authority should be amended by 1 July 2021 to rename the Authority as the Independent Hospital and Aged Care Pricing Authority and confer upon it the functions relating to aged care set out in Recommendation 115.151

Recommendation 115: Functions and objects of the Pricing Authority

1. Before the commencement of independent pricing of aged care services by the Pricing Authority, preliminary work on estimating the costs of providing high quality aged care should be undertaken by or at the direction of the implementation unit or taskforce referred to elsewhere in these recommendations.

2. Upon its establishment, by 1 July 2023, under the new Act, the Pricing Authority should take over that work and all resources developed by the implementation unit.

3. The functions of the Pricing Authority should include:

a. providing expert advice to the System Governor on optimal forms for funding arrangements for particular types of aged care services and in particular market circumstances

b. reviewing data and conducting studies relating to the costs of providing aged care services

c. determining prices for particular aged care services based on estimates of the amounts (whether constituted by government subsidies or user payments or both) appropriate to the provision of high quality and safe aged care services

d. evaluating, or assisting the System Governor to evaluate, the extent of competition in particular areas and markets

e. advising on appropriate forms of economic regulation, and, where necessary, implementation of such regulation.

4. In undertaking its functions, the Pricing Authority should be guided by the following objects:

149. Ibid., p. 124. 150. Royal Commission, Final Report: Care, Dignity and Respect, Volume 3A: The new system, Royal Commission, Adelaide, 2021, p. 54. 151. Ibid., p. 78.

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a. ensuring the availability and continuity of high quality and safe aged care services for people in need of them b. ensuring the efficient and effective use of public funding and private user contributions in the provision of high quality and safe aged care services, taking into account the

principles of competitive neutrality c. promoting efficient investment in the means of supply of high quality and safe aged care services in the long-term interests of people in need of them d. promoting the development and retention of a highly motivated and appropriately

skilled and numerous workforce necessary for the provision of high quality and safe aged care services in the long-term interests of people in need of them.152

Recommendation 139: Parliamentary scrutiny of determinations by the Pricing Authority

1. The determination of prices by the Pricing Authority under Recommendation 115.3(c) should be in the form of a legislative instrument subject to Parliamentary disallowance.

2. If the determination by the Pricing Authority is disallowed, legislation should provide for the Minister to make a new determination in the form of a legislative instrument subject to Parliamentary disallowance.153

Schedule 8 will amend three Acts:

• Aged Care Act 1997 (the Act)

• Aged Care Quality and Safety Commission Act 2018 (ACQSC Act)

• National Health Reform Act 2011 (the Health Reform Act).

Part 1—Amendment of the National Health Reform Act 2011 Section 3 of the National Health Reform Act 2011, sets out the objects of that Act, and makes reference in paragraph 3(c) to the establishment of the Independent Hospital Pricing Authority, as one of the objects of the Act. Item 1 proposes an amendment to paragraph 3(c) by removing reference to the Independent Hospital Pricing Authority, and replacing it with a reference to the Independent Health and Aged Care Pricing Authority (Pricing Authority). The new name reflects the expanded scope and functions of the re-named Pricing Authority.154

Section 4 of the Health Reform Act provides a Simplified Outline of the Act. As a consequence of the amendment made by item 1, item 2 replaces references to the ‘Independent Hospital Pricing Authority’ throughout section 4 with references to the ‘Independent Health and Aged Care Pricing Authority’.

Item 3 and item 4 also propose amendments to section 4 to indicate that particular functions of the Pricing Authority are only in respect of public hospitals and health care pricing and costing. These functions are:

• to determine the national efficient price for health care services provided by public hospitals where the services are funded on an activity basis

152. Royal Commission, Final Report: Care, Dignity and Respect, Volume 3B: The new system, op. cit., pp. 651–652. 153. Ibid., 826. 154. Explanatory Memorandum, op cit., p. 126.

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• to determine the efficient cost for health care services provided by public hospitals where the services are block funded155

• to publish the efficient cost and national efficient price, and other information, for the purpose of informing decision makers in relation to the funding of public hospitals

• if requested by the Minister or the Secretary, to advise the Commonwealth in relation to certain health care pricing and costing matters.

Item 5 proposes further amendments to section 4 to indicate that particular functions of the Pricing Authority are only in relation to aged care. These functions are:

• to provide advice about certain aged care pricing and costing matters to each relevant Commonwealth Minister

• to perform such functions as are conferred on the Pricing Authority by the Aged Care Act.

Item 6 inserts new definitions of key terms into section 5 of the Health Reform Act, including:

• Aged Care Act function means a function conferred on the Pricing Authority by the Aged Care Act, or a legislative instrument made under that Act for the purposes of proposed subparagraph 131A(1)(e)(ii), or a function that is incidental or conducive to such functions.156

• Aged care information means information (including protected information within the meaning of the Aged Care Act) obtained in the course of:

– the performance of the following functions, or the exercising of powers for or in connection with the performance of the following functions: • a function of the Pricing Authority mentioned in proposed subsection 131A(1) (other than an Aged Care Act function of the Pricing Authority) • a function of the Aged Care Advisory Committee (other than a function that relates to an

Aged Care Act function of the Pricing Authority) • a function of a subcommittee established under proposed section 204V (at item 67 of Schedule 8) to advise or assist the Aged Care Advisory Committee in the performance of a

function of the Aged Care Advisory Committee • a function of a committee established under section 205 to advise or assist the Pricing Authority in the performance of a function of the Pricing Authority mentioned in

proposed subsection 131A(1) (other than an Aged Care Act function of the Pricing Authority).

– assisting, under proposed section 204Y (which allows the Pricing Authority to assist the Aged Care Advisory Committee and its subcommittees in the performance of their functions), or section 207 (which allows the Pricing Authority to assist other committees of the Pricing Authority), in the performance of a function mentioned above in this definition. • Health care pricing and costing information means information obtained in the course of:

– the performance of the following functions, or the exercising of powers for or in connection with the performance of the following functions: • a function of the Pricing Authority mentioned in proposed subsection 131(1A) • a function of the Clinical Advisory Committee mentioned in proposed paragraph 177(ba)

(at item 65 of Schedule 8) • a function of a subcommittee established under section 191 to advise or assist the Clinical Advisory Committee in the performance of a function mentioned in paragraph 177(ba) • a function of the Jurisdictional Advisory Committee mentioned in proposed subparagraph

196(1)(va) (at item 66 of Schedule 8)

155. Government block funding refers to the government provision of grants to approved providers to deliver particular programs. The providers must meet a range of conditions and funding is usually linked to their client numbers and services delivered. 156. National Health Reform Act 2011, proposed paragraph 131A(1)(e), at item 27 of Schedule 8.

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• a function of a committee established under section 205 to advise or assist the Pricing Authority in the performance of a function of the Pricing Authority mentioned in proposed subsection 131(1A).

– assisting, under section 194, 204 or 207, in the performance of a function mentioned above. Item 9 amends the definition of protected Pricing Authority information so that it means information that:

• was obtained by a person in the person’s capacity as an official of the Pricing Authority

• relates to the affairs of a person other than an official of the Pricing Authority, and

• does not include protected information (within the meaning of the Aged Care Act) that is not aged care information (within the meaning of the Health Reform Act, as set out above).

The Explanatory Memorandum states that the effect of excluding:

protected information under the Aged Care Act obtained in the performance of Pricing Authority’s Aged Care Act functions from the National Health Reform Act’s secrecy provisions, [is] that it will only be subject to the Aged Care Act secrecy provisions, as specified in Division 86 of the Aged Care Act. This is appropriate as an Aged Care Act function relates to the operation of the Aged Care Act.157

Item 10 inserts a new definition of relevant Commonwealth Minister to mean the Minister with responsibility for the National Health Reform Act and, if that Minister is not also the Aged Care Minister, the Aged Care Minister.

Independent Health and Aged Care Pricing Authority (Chapter 4 of the Health Reform Act) Section 128 of the Health Reform Act provides a simplified outline to Chapter 4 of the Health Reform Act. Items 14, 15 and 16 amend section 128 to provide that certain functions of the Pricing Authority are only in relation to public hospitals and health care pricing and costing. These functions are:

• to determine the national efficient price for health care services provided by public hospitals where the services are funded on an activity basis

• to determine the efficient cost for health care services provided by public hospitals where the services are block funded

• to publish this, and other information, for the purpose of informing decision makers in relation to the funding of public hospitals

• if requested by the Minister or the Secretary, to advise the Commonwealth in relation to certain health care pricing and costing matters.

Item 17 amends section 128 of the Health Reform Act to provide that certain functions of the Pricing Authority are only in relation to aged care. These specific functions are:

• to provide advice about certain aged care pricing and costing matters to each relevant Commonwealth Minister and

• to perform such functions as are conferred on the Pricing Authority by the Aged Care Act.

Item 17 also amends section 128 to provide that Chapter 4 sets up three committees to assist the Pricing Authority:

• the Clinical Advisory Committee (already in existence)

• the Jurisdictional Advisory Committee (already in existence)

157. Explanatory Memorandum, op cit., p. 129.

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• the Aged Care Advisory Committee (new).

Subsection 129(1) of the Health Reform Act deals with the establishment of the Independent Hospital Pricing Authority. Item 19 proposes to repeal subsection 129(1) and replace it with a new subsection 129(1) to clarify that the body formerly known as the Independent Hospital Pricing Authority is continued in existence with the new name of the Independent Health and Aged Care Pricing Authority, which reflects the new scope of the re-named body’s functions.

Proposed subsection 129(3) (at item 20) provides that in establishing the (renamed) Pricing Authority, it is intended that the body perform functions relating to health care pricing and costing matters, and aged care matters.

Section 130 of the Health Reform Act deals with the objects of the Pricing Authority.

Proposed subsection 130(2) (at item 22) adds to the existing objects of the Pricing Authority to:

• on request, give independent advice to the Commonwealth in relation to health care pricing and costing matters

• give independent advice to the Commonwealth in relation to aged care pricing and costing matters, and

• perform other functions conferred on the Pricing Authority by the Aged Care Act or legislative instruments made under that Act.

Proposed subsection 131(1A) (at item 24) provides that the Pricing Authority’s functions also include, in addition to its public hospitals function specified in subsection 131(1):

• if the Minister or the Secretary requests, in writing, the Pricing Authority to do so—to advise the Commonwealth in relation to one or more health care pricing or costing matters (whether or not the matters relate to health care services provided by public hospitals)

• to conduct costing and other studies for the purpose of performing the function mentioned above or if requested by the Minister or the Secretary

• to publish (whether on the internet or otherwise) reports and papers relating to the functions mentioned above

• to do anything incidental to or conducive to the performance of any of the above functions.

Regard to certain matters in performing functions

Subsection 131(3) of the Health Reform Act provides that in performing its functions, the Pricing Authority must have regard to certain matters. Item 25 amends subsection 131(3) to provide that the matters it lists only relate to the Pricing Authority’s performance of its public hospitals function specified in subsection 131(1). The matters set out in subsection 131(3) that the Pricing Authority must have regard to include the following matters:

• relevant expertise and best practice within Australia and internationally

• the need to ensure:

– reasonable access to health care services – safety and quality in the provision of health care services – continuity and predictability in the cost of health care services and – the effectiveness, efficiency and financial sustainability of the public hospital system.

Functions of the Pricing Authority—aged care Proposed section 131A(1) (at item 27) sets out the new aged care functions of the Pricing Authority:

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Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021 55

• to provide advice to each relevant Commonwealth Minister about methods for calculating amounts of subsidies and supplements to be paid under Chapter 3 of the Aged Care Act or under Chapter 3 of the Aged Care (Transitional Provisions) Act 1997

• such functions relating to aged care (if any) as are specified in regulations

• to, as necessary, review data, conduct studies and undertake consultation for the purpose of performing a function mentioned above

• to do anything incidental to or conducive to the performance of the above functions

• such functions (an Aged Care Act function) as are:

– conferred on the Pricing Authority by the Aged Care Act, or by a legislative instrument made under that Act – specified in regulations or – incidental or conducive to the performance of these functions. In performing all these functions, the Pricing Authority must have regard to the objects of the Aged Care Act and the Transitional Act.

Subsection 133(1) of the Health Reform Act provides that COAG may give written policy principles to the Pricing Authority about the performance of the Pricing Authority’s functions.158 Proposed subsection 133(1A) (at item 29) provides that section 133 applies only to the existing public hospital functions of the Pricing Authority mentioned in subsection 131(1).

Section 143 of the Health Reform Act deals sets out the membership of the Pricing Authority. Items 31 to 33 amend section 143 with the effect that:

• rather than one Deputy Chair, there will be two Deputy Chairs—a Deputy Chair (Hospital Pricing) and a Deputy Chair (Aged Care Pricing and

• the number of ordinary members will decrease from seven to six.

Section 144 of the Health Reform Act deals with the appointment of members of the Pricing Authority. Item 34 proposes amendments to section 144(2), with the effect that:

• the Deputy Chair (Hospital Pricing) is to be appointed with the agreement of each State/Territory Health Minister, and

• before appointing a person as a member of the Pricing Authority (other than the Chair or a Deputy Chair), the Minister must consult each State/Territory Health Minister.

Item 34 also specifies the required experience of the Deputy Chair (Hospital Pricing), the Deputy Chair (Aged Care Pricing), and other members of the Pricing Authority.

The Minister must ensure that the Deputy Chair (Hospital Pricing) and at least one other member of the Pricing Authority have:

(a) substantial experience or knowledge and

(b) significant standing

in either or both of the following fields:

(c) public hospital strategic leadership or operational management

(d) public hospital pricing and costing. 159

158. Noting that the National Cabinet has replaced COAG as the primary forum for intergovernmental relations, items 43 to 45 of Schedule 2 to the COAG Legislation Amendment Bill 2021 propose to amend section 133 of the Health Reform Act to replace the reference to COAG with a reference to the First Ministers Council.

159. National Health Reform Act 2011, proposed subsection 144(3A).

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The Minister must ensure that the Deputy Chair (Aged Care Pricing) and at least one other member of the Pricing Authority have:

(a) substantial experience or knowledge and

(b) significant standing

in either or both of the following fields:

(c) aged care strategic leadership or operational management

(d) aged care pricing and costing.160

Delegation by the Pricing Authority Section 161 of the Health Reform Act deals with the delegation of the functions and powers of the Pricing Authority. Proposed subsection 161(3) (at item 49) provides that the Pricing Authority must not delegate an Aged Care Act function (explained above) to anyone other than a person who is:

• an SES employee or acting SES employee and

• an officer or employee mentioned in paragraph 174(a) or (b) (that is, an officer or employee of an Agency (within the meaning of the Public Service Act 1999) or an authority of the Commonwealth) whose services are made available to the Pricing Authority in connection with the performance of the function.

Proposed subsection 161(4) provides that the Pricing Authority must not delegate any of the following functions or powers:

• a function set out in any of paragraphs 131(1)(a) to (f) or paragraph 131(1)(j)

• a function set out in paragraph 131(1A)(a)

• a function set out in paragraph 131A(1)(a) or (c)

• any other function that involves giving advice to the Minister

• a function or power under Part 4.8 (which relates to the CEO of the Pricing Authority)

• the power to make, vary or revoke a legislative instrument

Proposed subsection 161(5) provides that in performing a delegated function or exercising a delegated power, the delegate must comply with any written directions of the Pricing Authority.

Establishment and functions of the Aged Care Advisory Committee

Item 67 of Schedule 8 inserts proposed Part 4.11A (consisting of proposed sections 204A to 204Y) into the Health Reform Act to establish the Aged Care Advisory Committee (ACAC).

Proposed section 204A provides for the establishment of the ACAC.

Proposed section 204B provides that the functions of the ACAC are:

(a) to advise the Pricing Authority in relation to methods for calculating amounts of subsidies and supplements to be paid under Chapter 3 of the Aged Care Act or under Chapter 3 of the Aged Care (Transitional Provisions) Act 1997

(b) to advise the Pricing Authority in relation to matters that:

(i) relate to the functions of the Pricing Authority mentioned in proposed subsection 131A(1) (other than the Aged Care Act functions) and

160. Ibid., proposed subsection 144(3B).

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(ii) are referred to the ACAC by the Pricing Authority

(c) to do anything incidental to or conducive to the performance of the above functions.

Membership of the Aged Care Advisory Committee Membership of ACAC is to consist of:

• a Chair, who must be the Deputy Chair (Aged Care Pricing) of the Pricing Authority and

• six other members appointed by the Minister, one of whom must be a member of the Pricing Authority (other than the Chair or the Deputy Chair (Hospital Pricing)).161

Appointment of ACAC members

Each member of the ACAC (other than the Deputy Chair (Aged Care Pricing) of the Pricing Authority) is to be appointed by the Minister by written instrument. Each committee member (other than the Deputy Chair (Aged Care Pricing) of the Pricing Authority) holds office for the period specified in the instrument of appointment, which must not exceed five years. However, a member can be reappointed.162

Acting appointments

The Minister may, by written instrument, appoint a person to act as a member of the ACAC (other than the Chair) either during a vacancy or where a member of the Committee is absent from duty or from Australia, or where a Committee member is unable to perform duties of their office for whatever reason.163

Remuneration of ACAC members

A member of the ACAC is to be paid the remuneration that is determined by the Remuneration Tribunal. If no determination is in operation, the member is to be paid the remuneration that is prescribed by the regulations.164 Any allowances are to be prescribed by the regulations.165

Disclosure of interests to the Minister and Pricing Authority

A member of the ACAC must give written notice to the Minister and the Pricing Authority of all interests, pecuniary or otherwise, that the member has or acquires that conflict or could conflict with the proper performance of the member’s functions.166

Disclosure of interests to the Aged Care Advisory Committee

A member of the ACAC who has an interest, pecuniary or otherwise, in a matter being considered or about to be considered by the ACAC must disclose the nature of the interest to a meeting of the Committee.167 This disclosure must be made as soon as possible after the relevant facts have come to the member’s knowledge and must be recorded in the minutes of the meeting.168 Unless the ACAC otherwise determines, the member must not be present during any deliberation by the ACAC on the matter, and must not take part in any decision of the ACAC with respect to the matter.169

161. Ibid., proposed section 204C. 162. Ibid., proposed section 204D; Acts Interpretation Act 1901, section 33AA . 163. National Health Reform Act 2011, proposed section 240E. 164. Ibid., proposed subsection 204F(1). 165. Ibid., proposed subsection 204F(2). 166. Ibid., proposed subsection 204G. 167. Ibid., proposed subsection 204G(H)(1). 168. Ibid., proposed subsections 204H(2) and (3). 169. Ibid., proposed subsection 204G(H)(4).

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Termination of appointment

The Minister may at any time terminate the appointment of a member of the ACAC.170

Other terms and conditions

A member of the ACAC holds office on the terms and conditions (if any) in relation to matters not covered by the Act that are determined by the Minister.171

Decision-making by the Aged Care Advisory Committee

Holding of meetings The ACAC is to hold such meetings as are necessary for the performance of its functions, and the Chair of the Committee may convene a meeting at any time.172

Quorum At a meeting of the ACAC, four members of the Committee constitute a quorum.173

Voting at meetings etc. At a meeting of the ACAC, a question is decided by a majority of the votes of the Committee members present.174 The person presiding at a meeting has a deliberative vote and, if the votes are equal, a casting vote.175

Decisions without meetings The ACAC is taken to have made a decision at a meeting if, despite not meeting if:

• a majority of the members who are entitled to vote on the proposed decision have indicated agreement with the decision in accordance with a method determined by the Committee, and

• all the members were informed of the proposed decision, or reasonable efforts were made to inform all the members of the proposed decision.176

Conduct of meetings The ACAC may, subject to the Health Reform Act, regulate proceedings at its meetings as it considers appropriate.177

Meeting Minutes Required

The ACAC must keep minutes of its meetings.178

Subcommittees

170. Ibid., proposed subsection 204L. 171. Ibid., proposed section 204M. 172. Ibid., proposed subsections 204N(1) and (2). 173. Ibid., proposed section 204Q. 174. Ibid., proposed subsection 204R(1). 175. Ibid., proposed subsection 204R(2). 176. Ibid., proposed subsection 204S(1). 177. Ibid., proposed section 204T. 178. Ibid., proposed section 204U.

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The ACAC may, with the written approval of the Pricing Authority CEO, establish subcommittees to advise or assist it in the performance of its functions.179 A subcommittee is to be composed partly by one or more members of the ACAC, and partly by one or more other persons.180

In relation to a subcommittee established under proposed subsection 204V(1), the Pricing Authority may determine:

• the subcommittee’s terms of reference

• the terms and conditions of appointment of the members of the subcommittee and

• the procedures to be followed by the subcommittee.181

Remuneration and allowances

In relation to a subcommittee established under proposed subsection 204V(1) a subcommittee member is to be paid the remuneration that is determined by the Remuneration Tribunal. If no determination is in operation, the member is to be paid the remuneration that is prescribed by the regulations.182 Any allowances are to be prescribed by the regulations.183

A subcommittee member is not entitled to be paid remuneration if the member holds an office or appointment, or is otherwise employed, on a full-time basis in the service or employment of a State, a public statutory corporation (other than a tertiary education institution), a company beneficially owned by a State or a public statutory corporation.184

Annual Report The Chair of the ACAC must, after the end of each financial year, prepare and give to the Minister, for presentation to the Parliament, a report on the operations of the ACAC during that year.185

Pricing Authority may assist the Aged Care Advisory Committee and its subcommittees The Pricing Authority may assist the ACAC and its subcommittees in the performance of their functions, and that assistance may include providing information and making available resources and facilities, including (though not limited to) secretariat services and clerical assistance.186

Requirements for functions in relation to hospitals Current section 208 provides that a State or Territory Health Minister may require the Pricing Authority to prepare reports or give specified information on matters relating to its functions. Item 69 inserts proposed subsection 208(1A) to specify that this section only applies in relation to the Pricing Authority’s public hospital functions set out in subsection 131(1).

Section 209 of the Act requires the Pricing Authority to keep the Standing Council on Health informed of its operations. Item 70 amends subsection 209(2) to provide that the Pricing Authority is not required to keep the Standing Council on Health informed about the following matters:

• the performance of the Pricing Authority’s new health care pricing and costing functions set out in proposed subsection 131(1A) or its new aged care functions set out in proposed subsection 131A(1) or the exercise of powers for or in connection with those functions

179. Ibid., proposed subsection 204V(1). 180. Ibid., proposed subsection 204V(2)(a) and (b). 181. Ibid., proposed subsection 204V(3). 182. Ibid., proposed subsection 204W(2). 183. Ibid., proposed subsection 204W(4). 184. Ibid., proposed subsection 204W(3). 185. Ibid., proposed section 204X. 186. Ibid., proposed subsections 204Y(1) and (2).

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• the performance of the functions of the Clinical Advisory Committee under proposed paragraph 177(ba) or the exercise of related powers

• the performance of the functions of the Jurisdictional Advisory Committee under proposed subparagraph 196(1)(a)(va) or the exercise of related powers

• the performance of the functions of the Aged Care Advisory Committee or exercise of related powers or

• the performance of functions or exercise of powers under the Public Governance, Performance and Accountability Act 2013.187

The Explanatory Memorandum states:

That requirement is intended to ensure that the Pricing Authority performs its public hospital pricing functions in accordance with agreements made between the Commonwealth and the States and Territories, which share funding responsibility for public hospital services. These agreements do not relate to the new health care pricing and costing functions of the Pricing Authority.188

Requirements for functions in relation to health care pricing and costing Reports

The Minister may, by written notice given to the Pricing Authority, require the Pricing Authority to:

(a) prepare a report about one or more specified matters relating to the performance of the aged care functions of the Pricing Authority mentioned in proposed subsection 131(1A) and

(b) give copies of the report to the Minister within the period specified in the notice.189

Information

The Minister may, by written notice given to the Pricing Authority, require the Pricing Authority to:

(a) prepare a document setting out specified information relating to the performance of the aged care functions of the Pricing Authority mentioned in proposed subsection 131(1A) and

(b) give copies of the document to the Minister within the period specified in the notice. 190

The Pricing Authority must comply with the abovementioned requirements. 191

Publication of reports and documents

The Minister may cause to be published (whether on the internet or otherwise) the abovementioned reports or information. 192

Reporting to Parliament The Pricing Authority must, as soon as practicable after the end of each financial year, prepare and give to the Minister, for presentation to the Parliament, a report on the aged care advice (if any)

187. As a result of the National Cabinet replacing COAG as the primary forum for intergovernmental relations, items 48 and 49 of Schedule 2 to the COAG Legislation Amendment Bill 2021 propose to amend section 209 of the Health Reform Act to replace the reference to ‘Standing Council on Health’ with a reference to ‘Ministerial Council’.

188. Explanatory Memorandum, op cit., p. 144. 189. National Health Reform Act 2011, proposed subsection 211A(1). 190. Ibid., proposed subsection 211A(2). 191. Ibid., proposed subsection 211A(3). 192. Ibid., proposed subsection 211A(4).

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given by the Pricing Authority in that year under proposed subsection 131(1A).193 The report must include the details of when the advice was given by the Pricing Authority and the content of the advice that was given.194

Requirements for functions in relation to aged care Reports

A relevant Commonwealth Minister may, by written notice given to the Pricing Authority, require the Pricing Authority to:

(a) prepare a report about one or more specified matters relating to the performance of the aged care functions of the Pricing Authority mentioned in proposed subsection 131(1A) and

(b) give copies of the report to the Minister within the period specified in the notice.195

Information

A relevant Commonwealth Minister may, by written notice given to the Pricing Authority, require the Pricing Authority to:

(a) prepare a document setting out specified information relating to the performance of the aged care functions of the Pricing Authority mentioned in proposed subsection 131(1A) and

(b) give copies of the document to the Minister within the period specified in the notice. 196

The Pricing Authority must comply with the abovementioned requirements. 197

Publication of reports and documents

The Minister may direct the Pricing Authority to publish (whether on the internet or otherwise) the abovementioned reports or information. 198

Certain information not to be published

The Pricing Authority must not publish any part of a report or document that contains protected Pricing Authority information that is aged care information, or protected information (within the meaning of the Aged Care Act) that is not aged care information.199

Reporting to Parliament The Pricing Authority must, as soon as practicable after the end of each financial year, prepare and give to the Minister, an annual report for presentation to the Parliament.200 The report must include information on the advice (if any) given by the Pricing Authority in that year in the performance of its aged care functions under proposed subsection 131(1A). The report must include details of when the advice was given by the Pricing Authority and the content of the

193. Ibid., proposed subsection 211B(2). 194. Ibid., proposed subsection 211B(3). 195. Ibid., proposed subsection 211C(1). 196. Ibid., proposed subsection 211C(2). 197. Ibid., proposed subsection 211C(4). 198. Ibid., proposed subsection 211C(3). 199. Ibid., proposed subsection 211C(5). 200. Ibid., proposed subsection 211D(1).

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advice. 201The report must also contain details relating to the Pricing Authority’s Aged Care Act functions:

• the number of applications under section 52G-4 of the Aged Care Act that were made to the Pricing Authority during the financial year for approval to charge an accommodation payment higher than the maximum amount

• the number of such applications that were approved, rejected or withdrawn during the financial year

• the number of applications under Division 35 of that Act that were made to the Pricing Authority during the financial year for approval to charge an extra service fee

• any other details required by regulations. 202

Restrictive practices (Schedule 9) A restrictive practice is ‘any action that restricts the rights or freedom of movement of a care recipient’ and ‘in an aged care setting must always be the last resort.’203 The five types of restrictive practices are: chemical restraint, environmental restraint, mechanical restraint, physical restraint, and seclusion.204

The strengthened arrangements in relation to these practices is now reflected in use of the term ‘restrictive practice’ in place of ‘restraint’ and those strengthened arrangements commenced on 1 July 2021 as a result of legislative change.205 The legislative changes were accompanied by practical measures that residential aged care providers must comply with.

The amendments to the Aged Care Act proposed by Schedule 9, which was introduced by Government amendments to the Bill,206 are intended to:

revise the strengthened arrangements on the use of restrictive practices that commenced on 1 July 2021, to address unexpected outcomes in relation to the interaction with State and Territory guardianship and consent laws.207

Recommendation 17 of the Royal Commission’s final report deals with the regulation of restraints and states, among other things, that subject to specified and limited exceptions, restrictive practices should be prohibited and only used where six criteria are satisfied. One of those criteria (Recommendation 17(1)(b)(v)) is that restrictive practices only be used:

in accordance with relevant State or Territory laws and with the documented informed consent of the person receiving care or someone authorised by law to give consent on that person’s behalf. 208

Interim Consent Arrangements for the Use Restrictive practices

201. Ibid., proposed paragraph 211D(2)(a). 202. Ibid., proposed paragraph 211D(2)(b). 203. Department of Health, Restrictive practices in aged care – a last resort, DoH website. 204. Quality of Care Principles 2014, section 15E. 205. The Amendments in Schedule 9 are in response to the changes introduced in the Aged Care and Other Legislation Amendment

(Royal Commission Response No. 1) Act 2021 – which mostly came into effect on 1 July. The larger changes to introduce the SIRS were implemented through the Aged Care Legislation Amendment (Serious Incident Response Scheme and Other Measures) Act 2021. 206. Amendment (14) Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, Government amendment, sheet ZB120, House of Representatives, 25 October 2021.

207. Supplementary Explanatory Memorandum, Aged Care and Other Legislation Amendment (Royal Commission Response No. 2) Bill 2021, op. cit., p. 4.

208. Royal Commission, Final Report: Care, Dignity and Respect, Volume 3A: The new system, op. cit., p. 109.

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The proposed amendments in Schedule 9 introduce interim consent arrangements until State and Territory laws can be amended to address these issues.

Division 54 of the Aged Care Act makes provision for a range of issues relating to quality of care. Subsection 54-1(1) of the Aged Care Act sets out the responsibilities of approved providers. These include, among other things, paragraph 54-1(1)(f) which states that if the provider provides aged care of a kind specified in the Quality of Care Principles 2014 to care recipients, they are required to ensure that a restrictive practice in relation to those recipients is only used in the circumstances set out in those Quality of Care Principles.209 The circumstances and requirements for the use of restrictive practices are set out in Division 3, Part 4A of the Quality of Care Principles.

Section 54-10 of the Aged Care Act deals with the matters that the Quality of Care Principles must require or make provision for.

Item 1 of Schedule 9 inserts proposed subsection 54-10(1A) into the Aged Care Act, and provides that the Quality of Care Principles, made for the purposes of paragraph 54-1(1)(f), may make provision for, or in relation to the persons or bodies who may give informed consent to the use of a restrictive practice in relation to a care recipient, if that care recipient lacks the capacity to give consent themselves. This will enable the

Quality of Care Principles to authorise a person or body to consent to the use of restrictive practices where it is not clear that State and Territory laws currently provide for this authorisation. It is proposed that the Quality of Care Principles will include a hierarchy of people who would be authorised to provide consent to the use of a restrictive practice in relation to a care recipient where the care recipient lacks the requisite capacity to consent to the use of the restrictive practice themselves.210

These interim arrangements are designed to ensure that approved providers are able to meet the strengthened requirements on the use of restrictive practices in all jurisdictions.

Immunity from Liability in Relation to Use of Restrictive practices

Item 3 inserts proposed section 54-11 into the Aged Care Act to provide immunity from civil or criminal liability to a protected entity in relation to the use of a restrictive practice in defined circumstances and where certain conditions are met.

A protected entity is:

• an approved provider who provides aged care of a kind specified in the Quality of Care Principles for the purposes of paragraph 54-1(1)(f) to a care recipient or

• an individual who used, or assisted in the use of, a restrictive practice in relation to a care recipient.211

Such an approved provider or individual is protected from civil or criminal liability in the following circumstances:

• a restrictive practice is used in relation to the care recipient

• the care recipient lacked capacity to give informed consent to the use of the restrictive practice

209. The Quality of Care Principles, made under section 96-1 of the Aged Care Act, set out the responsibilities of approved providers in providing care and services for residential and home care. The Restrictive Practices Principles regulate approved providers of residential aged care (providers) under the Aged Care Act and were put in place to protect senior Australians from the inappropriate use of restraint.

210. Supplementary Explanatory Memorandum, op. cit., p. 17. 211. Aged Care Act, proposed subsection 54-11(3).

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• informed consent to the use of the restrictive practice was given by a person or body specified in the Quality of Care Principles and

• the restrictive practice was used in the circumstances set out in the Quality of Care Principles made for the purposes of paragraph 54-1(1)(f).212

212. Aged Care Act, proposed subsections 54-11(1) and (2).