EXPLANATORY STATEMENT
Minute No. 11 of 2006 – Minister for Ageing
Subject: Aged Care Amendment (2005 Measures No. 1) Act 2006
Proclamation
Item 2 of the table in subsection 2(1) of the Aged Care Amendment (2005 Measures No. 1) Act 2006 (the Act) provides that Schedules 1 to 7 to the Act will commence on a single day to be fixed by Proclamation. Item 2 also provides that if any of the provisions do not commence within the period of 6 months beginning on the day on which the Act receives Royal Assent, they commence on the first day after the end of that period. The Act received Royal Assent on 6 April 2006.
The Act amends the Aged Care Act 1997 (the AC Act) to:
- provide for the establishment of new prudential regulatory arrangements for all providers who hold, or will hold, accommodation bonds and entry contributions (including approved providers of residential care services and flexible care services);
- amend the timeframes in which accommodation bonds must be repaid;
- enable interest to be paid to residents for the period after a resident leaves an aged care service and before the bond (or entry contribution) is repaid;
- afford the same rights and protections to residents who paid entry contributions before 1 October 1997 as those protections in place for residents who have paid, or will pay, accommodation bonds;
- require all approved providers holding bonds or entry contributions to provide certain information to the Department of Health and Ageing about their bond holdings and compliance with the prudential regulations;
- amend the timeframe in which the Minister for Ageing must provide the Annual Report to Parliament from 30 September to 30 November, in order that the Minister may include in that report information about approved providers compliance with the new prudential arrangements.
The purpose of the Proclamation is to fix 31 May 2006 as the day on which Schedules 1 to 7 to the Act commence.
Schedule 1 requires approved providers of flexible care services to comply with the requirements of Division 57 of the AC Act in relation to accommodation bonds. “Flexible care” means care provided in a residential or community setting through an aged care service that addresses the needs of care recipients in alternative ways to the care provided through residential care services and community care services.
Schedule 2 applies new Prudential Standards and requirements under section 57-21B of the AC Act to approved providers holding entry contributions paid by a care recipient prior to 1 October 1997.
Schedule 3 repeals provisions relating to current prudential requirements and replaces them with a new section 57-4 which provides that the User Rights Principles may set out Prudential Standards. These Prudential Standards may provide for:
- protection of accommodation bond balances and entry contribution balances;
- sound financial management of accommodation bonds by approved providers; and
- provision of information about the financial management of approved providers.
Schedule 4 requires approved providers to comply with new timeframes in relation to the repayment of bond balances and requires an approved provider to pay interest on the accommodation bond balance in circumstances specified in the User Rights Principles 1997 issued by the Minister for Ageing.
Schedule 5 gives the Secretary the power to require an approved provider to give information in relation to accommodation bonds and entry contributions in order to administer the provisions of the Aged Care (Bond Security) Act 2006 and the Aged Care (Bond Security) Levy Act 2006. Failure to comply with the requirements may give rise to sanctions under Part 4.4 of the AC Act being imposed or a penalty of up to 30 penalty units (if an approved provider is a corporation). Both of the above Acts received Royal Assent on 6 April 2006.
Schedule 6 requires the Minister to table in Parliament the annual report on the operation of the AC Act by 30 November rather than 30 September.
Schedule 7 allows for regulations to be made to give effect to the Act, particularly in relation to matters of a transitional nature relating to amendments or repeals made by the Act.
Extensive consultation was undertaken with all major stakeholders throughout the development of the Aged Care Amendment (2005 Measures No. 1) Act 2006, the Aged Care (Bond Security) Act 2006, and the Aged Care (Bond Security) Levy Act 2006. Implementation of the new prudential requirements, including amendments to the User Rights Principles 1997 and associated guidance material, has been undertaken in close consultation with industry and consumer representatives and government officials.
Commencement on 31 May 2006 is proposed to provide sufficient time to enable approved providers and residents to become fully informed about the new arrangements and for approved providers to establish any new systems to comply with the new arrangements.
The Proclamation would be a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Authority: Subsection 2(1) of the Aged Care Amendment (2005 Measures No. 1) Act 2006