AGED CARE (BOND SECURITY) BILL 2005

Aged Care (Bond Security) Bill 2005 No. , 2005 ii

Contents

Part 1--Preliminary

1 Short

title ...........................................................................................1

2 Commencement.................................................................................1

3 Simplified

outline ..............................................................................2

4 Application

of this Act ......................................................................3

5 Binding

the

Crown ............................................................................3

6 Definitions.........................................................................................3

Part 2--Insolvency event declaration

7 Making

insolvency

event declaration ............................................7

8 Notice

insolvency

event declaration..............................................7

Part 3--Requirement to notify Secretary of certain insolvency

events

Notice of certain insolvency events ...................................................8

Part 4--Default event declaration

Making of default event declaration ..................................................9

Notice of default event declaration....................................................9

Part 5--Refund declaration

12 Secretary

determine certain matters.............................................10

Making of refund declaration ..........................................................10

Notice of refund declaration ............................................................11

Part 6--Transfer of rights and payments of refund amounts

Transfer of recovery rights to Commonwealth ................................12

16 Payments

Commonwealth ..........................................................12

17 Appropriation ..................................................................................12

Part 7--Costs recoupment determinations

Making of refund costs recoupment determination .........................13

Making of administrative costs recoupment determination .............14

Part 8--Miscellaneous

20 Delegations

by Minister...................................................................15

21 Delegations

by Secretary .................................................................15

22 Regulations......................................................................................15

Part 1 Preliminary

Section 3

2 Aged Care (Bond Security) Bill 2005 No. , 2005

column 2 of the table. Any other statement in column 2 has effect

according to its terms.

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1. Sections 1 and

2 and anything in

this Act not

elsewhere covered

by this table

The day on which this Act receives the

Royal Assent.

2. Sections 3 to

At the same time as Schedule 5 to the Aged

Care Amendment (2005 Measures No. 1) Act

2005 commences.

Note:

This table relates only to the provisions of this Act as originally

passed by the Parliament and assented to. It will not be expanded to

deal with provisions inserted in this Act after assent.

(2) Column 3 of the table contains additional information that is not

part of this Act. Information in this column may be added to or

edited in any published version of this Act.

3 Simplified outline

The following is a simplified outline of this Act and some related

material:

In certain circumstances, the Commonwealth will pay to a person

an amount that the Secretary considers is equal to a bond balance,

and interest, owed to the person by an approved provider (see

sections 10, 12, 13 and 16).

Any rights that a person who is paid such an amount had to recover

the amount from an approved provider are transferred to the

Commonwealth (see section 15).

Preliminary Part 1

Section 4

Aged Care (Bond Security) Bill 2005 No. , 2005 3

The Commonwealth may recoup certain costs it incurs from other

approved providers (see sections 18 and 19 and the Aged Care

(Bond Security) Levy Act 2005).

4 Application of this Act

(1) This Act applies in all the States and Territories.

(2) However, this Act does not apply in any external Territory.

5 Binding the Crown

(1) This Act binds the Crown in each of its capacities.

(2) This Act does not make the Crown liable to be prosecuted for an

offence.

6 Definitions

(1) In this Act:

accommodation bond has the meaning given by the Dictionary in

Schedule 1 to the Aged Care Act 1997.

administrative costs, in relation to a default event declaration,

means costs incurred by the Commonwealth in relation to, and as

the result of, the making of the default event declaration and

includes, but is not limited to, costs incurred by the

Commonwealth as a result of:

(a) making any insolvency event declaration under section 7 that

enabled the making of the default event declaration; and

(b) giving notice of such an insolvency event declaration under

section 8; and

section 11; and

(d) determining matters under section 12 that were required to be

determined as a result of the making of the default event

declaration; and

Part 1 Preliminary

Section 6

4 Aged Care (Bond Security) Bill 2005 No. , 2005

(e) making any refund declarations under section 13 that were

required to be made as a result of the making of the default

event declaration; and

(f) giving notice of those refund declarations under section 14;

and

(g) attempting to recover amounts that the Commonwealth

gained the right to recover under section 15 as a result of the

making of those refund declarations; and

(h) making refund costs recoupment determinations under

section 18 relating to those refund declarations; and

(i) recovering levy that the Commonwealth was enabled, as a

result of the making of those refund costs recoupment

determinations, to impose by regulations made under

section 6 of the Aged Care (Bond Security) Levy Act 2005.

administrative costs recoupment determination means a

determination made under section 19.

approved provider has the meaning given by the Dictionary in

Schedule 1 to the Aged Care Act 1997.

bond means:

(a) an accommodation bond; or

(b) an entry contribution.

bond balance:

(a) in relation to a bond that is an accommodation bond--means

an accommodation bond balance as defined in the Dictionary

in Schedule 1 to the Aged Care Act 1997; or

(b) in relation to a bond that is an entry contribution--means an

entry contribution balance as defined in the Dictionary in

Schedule 1 to the Aged Care Act 1997.

corporation means a trading or financial corporation within the

meaning of paragraph 51(xx) of the Constitution.

default event declaration means a declaration made under

section 10.

entry contribution has the meaning given by the Dictionary in

Schedule 1 to the Aged Care Act 1997.

Preliminary Part 1

Section 6

Aged Care (Bond Security) Bill 2005 No. , 2005 5

Finance Minister means the Minister who administers the

Financial Management and Accountability Act 1997.

formal agreement has the meaning given by the Dictionary in

Schedule 1 to the Aged Care Act 1997.

insolvency event: each of the following events is an insolvency

event that may occur in relation to an approved provider:

(a) a CGT event G3 (within the meaning of the Income Tax

Assessment Act 1997) in respect of shares or financial

instruments of the approved provider;

(b) the making of an order:

(i) under section 459A or 459B of the Corporations Act

2001; or

(ii) under a provision of the law of a State, or Territory,

which deals with the incorporation of associations;

that the approved provider be wound up in insolvency;

(i) under section 491 of the Corporations Act 2001; or

(ii) under a provision of the law of a State, or Territory,

which deals with the incorporation of associations;

that the approved provider be wound up voluntarily;

(d) the passing of a resolution under paragraph 439C(c) of the

Corporations Act 2001 by the creditors of the approved

provider that the approved provider be wound up;

(e) the making of a sequestration order against the estate of the

approved provider;

(f) the acceptance of a debtor's petition (within the meaning of

the Bankruptcy Act 1966) against the approved provider by

an Official Receiver (within the meaning of that Act);

(g) the making of an insolvency event declaration in relation to

the approved provider (see section 7).

insolvency event declaration means a declaration made under

section 7.

national newspaper means a newspaper circulating generally

throughout Australia.

Part 1 Preliminary

Section 6

6 Aged Care (Bond Security) Bill 2005 No. , 2005

operator has the meaning given by the Dictionary in Schedule 1 to

the Aged Care Act 1997.

outstanding bond balance has the meaning given by

subsection (2).

refund amount, in relation to a refund declaration, means the

amount that the refund declaration declares is to be paid by the

Commonwealth.

refund costs recoupment determination means a determination

made under section 18.

refund declaration means a declaration made under section 13.

refund recipient, in relation to a refund declaration, means the

person that the refund declaration declares is to be paid an amount

by the Commonwealth.

Secretary means the Secretary of the Department.

Outstanding bond balance

(2) For the purposes of this Act, a bond balance is an outstanding

bond balance of an approved provider at a particular time if:

(a) at that time all, or part, of the bond balance has not been

refunded; and

(b) that time is later than the time required for the bond balance

to be refunded by the approved provider under:

(i) Subdivision 57-G of the Aged Care Act 1997; or

(ii) the User Rights Principles made under section 96-1 of

the Aged Care Act 1997; or

(iii) a formal agreement applying in respect of the bond

balance.

Insolvency event declaration Part 2

Section 7

Aged Care (Bond Security) Bill 2005 No. , 2005 7

Part 2--Insolvency event declaration

7 Making of insolvency event declaration

(1) The Minister may make an insolvency event declaration in relation

to an approved provider if:

(a)

either:

(i) the approved provider is an externally-administered

body corporate (within the meaning of the Corporations

Act 2001); or

(ii) a personal insolvency agreement under Part X of the

Bankruptcy Act 1966 is in effect in relation to the

approved provider or the approved provider's property;

and

(b) there is at least one outstanding bond balance of the approved

provider.

Note:

An approved provider that is a body that is incorporated under a law

of a State or Territory may be an externally-administered body

corporate within the meaning of the Corporations Act 2001.

(2) The insolvency event declaration must be in writing.

(3) An insolvency event declaration is not a legislative instrument.

8 Notice of insolvency event declaration

(1) The Secretary must give a copy of an insolvency event declaration

to the approved provider to which the insolvency event declaration

relates.

(2) A failure to comply with subsection (1) does not affect the validity

of any insolvency event declaration.

Part 3 Requirement to notify Secretary of certain insolvency events

Section 9

8 Aged Care (Bond Security) Bill 2005 No. , 2005

Part 3--Requirement to notify Secretary of certain

insolvency events

9 Notice of certain insolvency events

(1) An approved provider must notify the Secretary the first time that

any of the events mentioned in paragraph (a), (b), (c), (d), (e) or (f)

of the definition of insolvency event occur in relation to the

approved provider. The notification must be given in writing by the

end of the first business day after the day on which the event

occurs.

(2) An approved provider commits an offence if the approved provider

refuses or fails to comply with a requirement under subsection (1).

Penalty: 30 penalty units.

Default event declaration Part 4

Section 10

Aged Care (Bond Security) Bill 2005 No. , 2005 9

Part 4--Default event declaration

10 Making of default event declaration

(1) As soon as practicable after the Secretary first becomes aware that:

(a) an insolvency event has occurred in relation to an approved

provider; and

(b) there is at least one outstanding bond balance of the approved

provider;

the Secretary must make a default event declaration.

(2) The default event declaration must:

(a) be in writing; and

(b) state that an insolvency event has occurred in relation to the

approved provider; and

outstanding bond balance of the approved provider.

(3) A default event declaration is not a legislative instrument.

11 Notice of default event declaration

(1) The Secretary must give a copy of a default event declaration to:

(a) the approved provider in relation to which the declaration

states an insolvency event has occurred; and

(b) each person whom the Secretary considers may be entitled to

receive a refund of an outstanding bond balance of the

approved provider.

(2) The Secretary must publish a copy of a default event declaration in

a national newspaper.

(3) A failure to comply with subsection (1) or (2) does not affect the

validity of any default event declaration.

Part 5 Refund declaration

Section 12

10 Aged Care (Bond Security) Bill 2005 No. , 2005

Part 5--Refund declaration

12 Secretary to determine certain matters

(1) If the Secretary has made a default event declaration stating that an

insolvency event has occurred in relation to an approved provider,

the Secretary must identify each bond balance that:

(a) was an outstanding bond balance of the approved provider at

the time that the default event declaration was made; or

(b) later becomes an outstanding bond balance of the approved

provider.

(2) In respect of each bond balance identified by the Secretary under

subsection (1), the Secretary must determine:

(a) the date on which the bond balance became an outstanding

bond balance; and

(b) the amount that the Secretary considers is equal to the

amount of the bond balance that had not been refunded at the

time that bond balance became an outstanding bond balance;

and

amount representing interest on the amount determined under

paragraph (b), worked out in accordance with the User Rights

Principles made under section 96-1 of the Aged Care Act

1997, that has accrued at the time that the Secretary

determines the amount under paragraph (b); and

(d) the person to whom the Secretary considers the approved

provider was required to refund the bond balance at the time

that it became an outstanding bond balance; and

(e) the method that the Secretary considers would be most

appropriate for the Commonwealth to use to pay a refund

amount to the person mentioned in paragraph (d).

13 Making of refund declaration

(1) As soon as practicable after the Secretary has determined the

matters mentioned in subsection 12(2) in respect of an outstanding

Refund declaration Part 5

Section 14

Aged Care (Bond Security) Bill 2005 No. , 2005 11

bond balance of an approved provider, the Secretary must make a

refund declaration relating to the outstanding bond balance.

(2) The refund declaration must:

(a) be in writing; and

(b) specify the approved provider that has not refunded all, or

part, of the relevant outstanding bond balance; and

the sum of:

(i) the amount determined under paragraph 12(2)(b); and

(ii) the amount determined under paragraph 12(2)(c);

to the person determined under paragraph 12(2)(d).

(3) A refund declaration is not a legislative instrument.

14 Notice of refund declaration

(1) The Secretary must give a copy of a refund declaration to:

(a) the refund recipient; and

(b) the approved provider specified in the refund declaration.

(2) A failure to comply with subsection (1) does not affect the validity

of any refund declaration.

Part 6 Transfer of rights and payments of refund amounts

Section 15

12 Aged Care (Bond Security) Bill 2005 No. , 2005

Part 6--Transfer of rights and payments of refund

amounts

15 Transfer of recovery rights to Commonwealth

Immediately after the Secretary makes a refund declaration, any

rights that the refund recipient had when the refund declaration was

made to recover an amount equal to the refund amount from the

approved provider specified in the refund declaration are, by force

of this section, transferred to the Commonwealth.

Note:

Any rights that the refund recipient has to receive from the approved

provider any additional amounts are not transferred to the

Commonwealth by force of this section.

16 Payments by Commonwealth

Within 14 days after the Secretary makes a refund declaration, the

Commonwealth must pay the refund amount to the refund

recipient.

17 Appropriation

The amounts payable under section 16 are to be paid out of the

Consolidated Revenue Fund, which is appropriated accordingly.

Costs recoupment determinations Part 7

Section 18

Aged Care (Bond Security) Bill 2005 No. , 2005 13

Part 7--Costs recoupment determinations

18 Making of refund costs recoupment determination

(1) The Minister may, at a particular time, make a refund costs

recoupment determination relating to one or more refund

declarations if:

(a) before that time, the Minister has informed the Treasurer and

the Finance Minister that the Minister intends to make a

refund costs recoupment determination relating to those

refund declarations; and

(b) at that time, the Commonwealth has not recovered all of each

refund amount in relation to those refund declarations; and

refund costs recoupment determination relating to each of

those refund declarations.

(2) A refund costs recoupment determination must:

(a) be in writing; and

(b) specify the refund declarations to which the determination

relates; and

and

(d) specify the default event declaration to which the

determination relates (see subsection (4)).

(3) The costs recoupment amount specified in a refund costs

recoupment determination is the amount equal to the sum of each

refund amount that:

(a) is specified in a refund declaration specified in the

determination; and

(b) has not been recovered by the Commonwealth at the time the

determination is made.

(4) A default event declaration is a default event declaration to which a

refund costs recoupment determination relates if the making of the

default event declaration was a precondition of the making of the

Part 7 Costs recoupment determinations

Section 19

14 Aged Care (Bond Security) Bill 2005 No. , 2005

refund declarations specified in the refund costs recoupment

determination.

(5) A refund costs recoupment determination is not a legislative

instrument.

19 Making of administrative costs recoupment determination

(1) The Minister may, at a particular time, make an administrative

costs recoupment determination relating to a default event

declaration if:

(a) before that time, the Minister has informed the Treasurer and

the Finance Minister that the Minister intends to make an

administrative costs recoupment determination relating to

that default event declaration; and

(b) at that time, the Minister considers, on reasonable grounds,

that the Commonwealth has not recouped all of the

administrative costs relating to the default event

determination.

(2) An administrative costs recoupment determination must:

(a) be in writing; and

(b) specify the default event declaration to which it relates; and

(3) The costs recoupment amount specified in an administrative costs

recoupment determination must not exceed the sum of:

(a) the amount that the Minister considers, on reasonable

grounds, is equal to the amount of the administrative costs

relating to the default event declaration specified in the

determination that the Commonwealth has not recouped at

the time that the determination is made; and

(b) the amount that the Minister considers, on reasonable

grounds, is likely to cover the costs of recovering levy that

the Commonwealth will be enabled to impose by regulations

made under section 6 of the Aged Care (Bond Security) Levy

Act 2005 as a result of the making of the determination.

(4) An administrative costs recoupment determination is not a

legislative instrument.

Miscellaneous Part 8

Section 20

Aged Care (Bond Security) Bill 2005 No. , 2005 15

Part 8--Miscellaneous

20 Delegations by Minister

(1) The Minister may, in writing, delegate to the Secretary all or any of

the Minister's powers or functions under this Act.

(2) In exercising powers or functions delegated under subsection (1),

the Secretary must comply with any directions of the Minister.

21 Delegations by Secretary

(1) The Secretary may, in writing, delegate to an SES employee, or

acting SES employee, in the Department all or any of the

Secretary's powers or functions under this Act.

(2) In exercising powers or functions delegated under subsection (1),

the delegate must comply with any directions of the Secretary.

22 Regulations

(1) The Governor-General may make regulations prescribing matters:

(a) required or permitted by this Act to be prescribed; or

(b) necessary or convenient to be prescribed for carrying out or

giving effect to this Act; or

facilitating the collection of levy imposed by regulations

under section 6 of the Aged Care (Bond Security) Levy Act

2005.

(2) Without limiting paragraph (1)(c), regulations prescribing matters

necessary or convenient to be prescribed for enabling or facilitating

the collection of levy may provide for the following:

(a) the person who is liable to pay levy;

(b) the time levy is due and payable;

Commonwealth of Australia Bills

AGED CARE (BOND SECURITY) BILL 2005