Commonwealth of Australia Explanatory Memoranda

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AGED CARE AMENDMENT (RED TAPE REDUCTION IN PLACES MANAGEMENT) BILL 2015

                             2013 - 2014 - 2015



    THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




               HOUSE OF REPRESENTATIVES/SENATE




  AGED CARE AMENDMENT (RED TAPE REDUCTION IN PLACES
               MANAGEMENT) BILL 2015




                    EXPLANATORY MEMORANDUM




(Circulated by authority of the Minister for Aged Care, the Hon Sussan Ley MP)


AGED CARE AMENDMENT (RED TAPE REDUCTION IN PLACES MANAGEMENT) BILL 2015 OUTLINE Transfer of Places This Bill amends the Aged Care Act 1997 to streamline the transfer of places between approved providers while still ensuring a high level of care is provided to older Australians. The amendments in this Bill will simplify the process for transferring places between approved providers by deeming proposed transfers as approved. This approval is subject to the Secretary's power to veto any proposed transfer which makes sure that only transfers that uphold standards of appropriate care will progress. Provisionally Allocated Places This Bill amends the Aged Care Act 1997 by streamlining the management of provisionally allocated places while still promoting access to care for older Australians. The amendments in this Bill will reduce red tape for approved providers by extending the current provisional allocation period and as a result reducing the need for approved providers to apply for extensions. The amendments will also ensure that care is provided to older Australians in a reasonable timeframe by limiting the number of extensions available. Financial Impact Statement Nil 1


Statement of Compatibility with Human Rights Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 AGED CARE AMENDMENT (RED TAPE REDUCTION IN PLACES MANAGEMENT) BILL 2015 This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. Overview of the Bill Transfer of Places Prior to these amendments, an approved provider had to submit an application for the transfer of places to another approved provider and the Secretary of the Department was required to consider and either reject or approve all applications. The amendments to this Schedule will streamline this process and remove the need for approved providers to make applications and wait for the Secretary's decision by deeming proposed transfers as approved after a notice of transfer has been submitted by the approved provider. However, the appropriateness of transfer will still be considered, with the Secretary having the power to veto a transfer to ensure that suitable arrangements and care are provided to older Australians. This means only suitable and appropriate transfers will take effect. Provisionally Allocated Places Prior to these amendments, approval from the Secretary of the Department was required for any extension of a provisionally allocated place after the provisional allocation period of two (2) years. The amendments to this Schedule will increase the provisional allocation period to four (4) years. This reduces regulation for approved providers as it means they will not have to apply for an extension until four years after their place has been provisionally allocated. Also prior to these amendments, an unlimited amount of extensions were available to extend the allocation of a provisionally allocated place. This meant that places could be allocated without care being provided for an indefinite period of time. The amendments to this Schedule ensure that timely care is provided to older Australians by limiting the amount of extensions available to two 12 month periods with further extensions available only in exceptional circumstances. This will ensure that provisionally allocated places take effect and care is provided to older Australians in reasonable timeframes. Human rights implications The proposed amendments to the Aged Care Act 1997 do not engage any applicable human rights. The amendments reduce the regulatory burden on approved providers with no increase or detrimental impact on their existing human rights obligations. Conclusion This Bill is compatible with human rights as it does not raise any human rights issues. The Hon Sussan Ley MP, the Minister for Aged Care 2


AGED CARE AMENDMENT (RED TAPE REDUCTION IN PLACES MANAGEMENT) BILL 2015 NOTES ON CLAUSES Clause 1 - Short Title This clause provides that the Bill, once enacted, may be cited as the Aged Care Amendment (Red Tape Reduction in Places Management) Act 2015. Clause 2 - Commencement This clause provides that the Bill will commence on the day after this Act receives Royal Assent. Clause 3 - Schedules This clause provides that each Act that is specified in a Schedule to this Bill is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item has effect according to its terms. Schedules 1 and 2 amend the Aged Care Act 1997 (hereafter referred to as the Aged Care Act). SCHEDULE 1 -- AMENDMENT OF THE AGED CARE ACT Transfer of Places Item 1 - Division 16 This item will repeal Division 16 of the Aged Care Act and substitute a new Division 16 with new Subdivisions 16-A and 16-B. New subdivision 16-A deals with the transfer of places other than provisionally allocated places and new Subdivision 16-B deals with the transfer of provisionally allocated places. New section 16-1 confirms that Subdivision 16-A applies to allocated places other than provisionally allocated places. New subsection 16-2(1) enables an approved provider to give a transfer notice to the Secretary notifying the Secretary of the transfer of places to another person. Prior to the amendments proposed in this Bill, an approved provider was required to apply to the Secretary for approval to transfer places. The Secretary was then required to provide notice of their decision to approve or reject the transfer. The change from an application to a transfer notice means the transfer is deemed to be 'approved' subject to the Secretary's power to veto the transfer under new section 16-6. This change of deeming transfers as 'approved' streamlines the transfer process and provides greater certainty for approved providers. If the approved provider does not receive a response to the contrary, the transfer is deemed to be approved which allows the transfer to take place on the proposed transfer day. New subsection 16-2(2) specifies the requirements for the transfer notice, such as the form and information to be included. New subsection 16-2(3) specifies the particular information that must be included in the transfer notice. 3


New subsection 16-2(4) specifies the period of time before the proposed transfer day that the transfer notice must be given to the Secretary, subject to the Secretary being able to determine another period under new subsection 16-2(5). If the transferee is already an approved provider under section 8-1, the period is at least 60 days before the proposed transfer day. If the transferee is not already an approved provider under section 8-1, the period is at least 90 days before the proposed transfer day. New subsection 16-2(5) provides for the Secretary, at the request of the transferor and transferee, to determine another period for the transfer notice to be given before the proposed transfer day as opposed to those outlined in new subsection 16-2(4). For example, the transferor and the transferee may ask the Secretary to shorten or extend the notice period to facilitate the sale of the business and ensure commercial deals do not lapse. New subsection 16-2(6) provides that in determining another period under new subsection 16-2(5), the Secretary must consider any matters set out in the Allocation Principles. Amendments will be made to the Allocation Principles under a separate process. New subsection 16-2(7) provides for the Secretary to give written notice of their decision to determine another period under new subsection 16-2(5) to the transferor and transferee. New subsection 16-2(8) provides that if information included in a transfer notice changes, the transfer notice is taken to have not been given unless the transferor and transferee give the Secretary written notice of the changes. This provision is included to ensure that the decision whether or not to veto the transfer is made by the Secretary with the most up to date and accurate information. New section 16-3 specifies the factors the Secretary must consider and be satisfied of after receiving the transfer notice. If the Secretary is not satisfied of the matters in this section, the Secretary may issue a veto notice rejecting the transfer under new section 16-6. This ensures that the needs of care recipients are still being considered and the Secretary will continue to ensure that transfers of places will not have a detrimental effect on care recipients. New section 16-4 enables the Secretary to issue a notice to resolve if there are any issues of concern relating to the transfer notice. The notice to resolve must be issued by the Secretary within 28 days of receiving the transfer notice. The transferee and transferor will then have 28 days, or such shorter period as specified in the notice, to make submissions regarding the concerns raised by the Secretary. If the issues relating to the notice remain of concern to the Secretary, the Secretary may issue a veto notice rejecting the transfer under the new section 16-6. The decision to issue a notice to resolve is not a reviewable decision under section 85-1 of the Aged Care Act. However, the transferor and the transferee are able to make submissions in response to the notice to resolve meaning that any issues with the notice can be addressed then. 4


Before the amendments proposed in this Bill, the Secretary was able to request further information in relation to an application for transfer but was unable to issue a notice to resolve. If a matter in an application for transfer was of concern, the Secretary could only reject the application, meaning the approved provider would have to reapply for the transfer once any issues had been rectified. The insertion of new section 16-4 into the Aged Care Act will enable the Secretary to raise matters of concern, including requesting further information, and receive a response before making the decision of whether or not to issue a veto notice under new section 16-6. This will reduce red tape for approved providers as there is less chance they will need to submit a new transfer notice in order to address the concerns of the Secretary. New subsection 16-5(1) stipulates that a proposed transfer day, as specified in the transfer notice, will become a later day if the Secretary; (a) is given notice of changes to information included in the transfer notice under new subsection 16-2(8) within 28 days of the proposed transfer day; or (b) issues a notice to resolve under new section 16-4. The note at the end of subsection new 16-5(1) confirms that this section may operate multiple times in respect of one transfer, for example, if changes to the information in the transfer notice within 28 days of the proposed transfer day occur more than once. New subsection 16-5(2) states that, subject to new subsection 16-5(3), if the matters set out in new subsection 16-5(1) occur the proposed transfer day will become the 29th day after the changing proposed transfer day. New subsection 16-5(3) states that if the transferor and transferee agree in writing for the proposed transfer day to be another day that is later than the 29th day after the changing proposed transfer day, and the Secretary also agrees in writing to the other day, that this day will become the proposed transfer day. New section 16-6 specifies the matters for which the Secretary can issue a veto notice disallowing the transfer. The veto notice must be given to the transferor and transferee at least seven days before the proposed transfer day. Enabling the Secretary to veto proposed transfers ensures that only appropriate transfers will proceed. This fundamentally ensures that adequate and appropriate care will be provided to the older Australians affected by the transfer. The decision to issue a veto notice rejecting the transfer is a reviewable decision under section 85-1 of the Aged Care Act. New section 16-7 relates to the transfers of places to a residential care service that has extra service status. If the Secretary is not satisfied that either new subsection 16-7(1) or 16-7(2) apply, the Secretary may issue a veto notice rejecting the transfer under new section 16-6. New section 16-8 provides for the transfer of a place to take effect on the transfer day. The transfer day is either the proposed transfer day as specified in the transfer notice or another day that is the proposed transfer day as determined by the operation of this new Division. 5


This new section also clarifies that a transfer does not occur on transfer day if a veto notice rejecting the transfer has been given and is in effect or the transferee is not an approved provider. The changes proposed by this bill reduce regulation as they clarify that the Secretary no longer needs to approve a transfer for it to take effect. The approved providers can therefore expect the transfer to take place on the proposed transfer day unless they receive a veto notice. The ability of the Secretary to issue a veto notice rejecting the transfer ensures that only transfers that will adequately provide care for older Australians will proceed. New section 16-9 specifies the effect on certain matters if a transfer of a place takes effect on the transfer day. This section essentially replicates the existing section 16-11. The intent of these provisions is to ensure there is continuity of care and that the obligations and responsibilities of the outgoing approved provider transfer to the incoming approved provider along with the places. In addition, new paragraph 16-9(e) provides that if an application to vary conditions of allocation was made at the same time as the transfer notice was given it will be deemed approved if the Secretary does not veto the transfer. New section 16-10 relates to information that may be given from the Secretary to the transferee. This provision essentially replicated the existing section 16-9. It enables the Secretary to release certain information to the incoming approved provider that might otherwise be restricted by the protected information provisions in Division 86. This provision can be used to authorise the disclosure of information, for example to facilitate the smooth transfer of care and responsibilities between approved providers. It will ensure there is the least disruption to care recipients in the event the outgoing approved provider does not give necessary information to the incoming approved provider. New section 16-11 specifies the information that must be given from the transferor to the transferee if the transfer is completed. This provision replicates existing 16-10 to facilitate the smooth transfer of care and responsibilities between approved providers New section 16-12 confirms that subdivision 16-B applies to provisionally allocated places. New subsection 16-13(1) enables an approved provider to give a transfer notice to the Secretary notifying the Secretary of the proposed transfer of provisionally allocated places to another person. Prior to the amendments proposed in this Bill, an approved provider was required to apply to the Secretary for approval to transfer provisionally allocated places. The Secretary was then required to provide notice of their decision to approve or reject the transfer. The change from an application to a transfer notice means the transfer is deemed to be 'approved' subject to the Secretary's power to veto the transfer under new section 16-17. This change of deeming transfers as 'approved' streamlines the transfer process and provides greater certainty for approved providers. If the approved provider does not receive a response to the contrary, the transfer is deemed to be approved which allows the transfer to take place on the proposed transfer day. 6


New subsection 16-13(2) specifies the requirements for the transfer notice, such as the form and information to be included. New subsection 16-13(3) specifies the particular information that must be included in the transfer notice. New subsection 16-13(4) specifies the period of time before the proposed transfer day that the transfer notice must be given to the Secretary, subject to the Secretary being able to determine another period under new subsection 16-13(5). If the transferee is already an approved provider under section 8-1, the period is at least 60 days before the proposed transfer day. If the transferee is not already an approved provider under section 8-1, the period is at least 90 days before the proposed transfer day. New subsection 16-13(5) provides for the Secretary, at the request of the transferor and transferee, to determine another period for the transfer notice to be given before the proposed transfer day as opposed to those outlined in new subsection 16-13(4). For example, the transferor and the transferee may ask the Secretary to shorten or extend the notice period to facilitate the sale of the business and ensure commercial deals do not lapse. New subsection 16-13(6) provides that in determining another period under new subsection 16-13(5), the Secretary must consider any matters set out in the Allocation Principles. Amendments will be made to the Allocation Principles under a separate process. New subsection 16-13(7) provides for the Secretary to give written notice of their decision to determine another period under new subsection 16-13(5) to the transferor and transferee. New subsection 16-13(8) provides that if information included in a transfer notice changes, the transfer notice is taken to have not been given unless the transferor and transferee give the Secretary written notice of the changes. This provision is included to ensure that the decision whether or not to veto the transfer is made by the Secretary with the most up to date and accurate information. New section 16-14 specifies the factors the Secretary must consider and be satisfied of after receiving the transfer notice. If the Secretary is not satisfied of the matters in this section, the Secretary may issue a veto notice rejecting the transfer under new section 16-17. This ensures that the needs of future care recipients are still being considered and the Secretary will continue to ensure that transfers of places will not have a detrimental effect on future care recipients. New section 16-15 enables the Secretary to issue a notice to resolve if there are any issues of concern in the transfer notice. The notice to resolve must be issued by the Secretary within 28 days of receiving the transfer notice. The transferee and transferor will then have 28 days, or such shorter period as specified in the notice, to make submissions regarding the concerns raised by the Secretary. If the issues specified in the notice remain of concern to the Secretary, the Secretary may issue a veto notice rejecting the transfer under new section 16-17. 7


The decision to issue a notice to resolve is not a reviewable decision under section 85-1 of the Aged Care Act. However, the transferor and the transferee are able to make submissions in response to the notice to resolve meaning that any issues with the notice can be addressed then. Before the amendments proposed in this Bill, the Secretary was able to request further information in relation to an application for transfer but was unable to issue a notice to resolve. If a matter in an application for transfer was of concern, the Secretary could only reject the application, meaning the approved provider would have to reapply for the transfer once any issues had been rectified. The insertion of new section 16-15 into the Aged Care Act will enable the Secretary to raise matters of concern, including requesting further information, and receive a response before making the decision of whether to issue a veto notice under new section 16-17. This will reduce red tape for approved providers as there is less change they will need to submit a new transfer notice in order to address the concerns of the Secretary. New subsection 16-16(1) stipulates that a proposed transfer day, as specified in the transfer notice, will become a later day if the Secretary; (a) is given notice of changes to information included in the transfer notice under new subsection 16-13(8) within 28 days of the proposed transfer day; or (b) issues a notice to resolve under new section 16-15. The note at the end of new subsection 16-16(1) confirms that this section may operate multiple times in respect of one transfer, for example, if changes to the information in the transfer notice within 28 days of the proposed transfer day occur more than once. New subsection 16-16(2) states that, subject to new subsection 16-16(3), if the matters set out in subsection 16-16(1) occur the proposed transfer day will become the 29th day after the changing proposed transfer day. New subsection 16-16(3) states that if the transferor and transferee agree in writing for the proposed transfer day to be another day that is later than the 29th day after the changing proposed transfer day, and the Secretary also agrees in writing to the other day, that this day will become the proposed transfer day. New section 16-17 specifies the circumstances in which the Secretary can issue a veto notice disallowing the transfer. The veto notice must be given to the transferor and transferee at least seven days before the proposed transfer day. Enabling the Secretary to veto proposed transfers ensures that only appropriate transfers will proceed. This fundamentally ensures that adequate and appropriate care will be provided to the older Australians affected by the transfer. The decision to issue a veto notice rejecting the transfer is a reviewable decision under section 85-1 of the Aged Care Act. New section 16-18 relates to the transfers of provisionally allocated places to a residential care service that has extra service status. If the Secretary is not satisfied that either new subsection 16-18(1) or 16-18(2) apply, the Secretary may issue a veto notice rejecting the transfer under new section 16-17. 8


New section 16-19 provides for the transfer of a provisionally allocated place to take effect on the transfer day. The transfer day is either the proposed transfer day as specified in the transfer notice or another day that is the proposed transfer day as determined by the operation of this Division. This new section also clarifies that a transfer does not occur on transfer day if a veto notice rejecting the transfer has been given and is in effect or the transferee is not an approved provider. This changes proposed in this bill reduce regulation as they clarify that the Secretary no longer needs to approve a transfer before it takes effect. The approved providers can therefore expect the transfer to take place on the proposed transfer day unless they receive a veto notice. The ability of the Secretary to issue a veto notice rejecting the transfer ensures that only transfers that will provide adequate arrangements for future care for older Australians will proceed. New section 16-20 specifies the effect of a transfer of a provisionally allocated place. The intent of this provision is to ensure there is continuity of the obligations and responsibilities of the outgoing approved provider transfer to the incoming approved provider along with the provisionally allocated places. New section 16-21 relates to information that may be given from the Secretary to the transferee. This provision essentially replicated the existing section 16-21. It enables the Secretary to release certain information to the incoming approved provider that might otherwise be restricted by the protected information provisions in Division 86. This provision can be used to authorise the disclosure of information, for example to facilitate the smooth transfer of responsibilities between approved providers. Item 2 - Paragraph 31-3(1)(b) This item will omit the words ", 16-8(2) or 16-20(2)" and substitute them with "or Division 16". This change is consequential to the repeal of the previous sections 16-8 and 16-20 and the insertion of the new Division 16 as found in item 1 above. Item 3 - Paragraph 63-1(1)(e) This item will omit the words "section 16-10" and substitute them with "section 16-11". This change is consequential to the repeal of the previous section 16- 10 and the insertion of the new section 16-11 as found in item 1 above. Item 4 - Section 85-1 (table items 10 to 12C) This item will repeal items 10 to 12C of the table at the end of section 85-1 of the Aged Care Act and substitute new items 10 and 11. These changes are consequential to the repeal of the previous Division 16 and the insertion of new Division 16 in item 1 above. New item 10 specifies that a decision by the Secretary to issue a veto notice rejecting the transfer of an allocated place, other than a provisionally allocated place, under new subsection 16-6(1) is a reviewable decision. New item 11 specifies that a decision by the Secretary to issue a veto notice rejecting the transfer of a provisionally allocated place under new subsection 16-17(1) is a reviewable decision. 9


Item 5 - At the end of subsection 85-2(1) This item will add a note at the end of subsection 85-2(1) confirming that this subsection cannot apply to decisions under Division 16. This clarifies that if no response is given to the transfer notice given under new subsection 16-2(1) and 16-13(1), it will not be taken to have been rejected. Transfer notices are not applications as provided for in paragraph 85-2(1)(a). There is also no period specified for the Secretary giving notice of their decision for approval as required for paragraphs 85-2(1)(b) and (c). If no response is received by the Secretary after the transfer notice has been given to the Secretary, the transfer is deemed to be approved which allows the transfer to take place on the proposed transfer day. Item 6 - Subsection 89-1(2) This item will omit the words "section 16-10" and substitute them with the words "section 16-11". This change is consequential to repeal of the previous Division 16 and the insertion of the new section 16-11 as found in item 1 above. Item 7 - Application and savings provisions This item provides that changes made to Division 16 of the Aged Care Act, by item 1 above, apply to all allocated places or provisionally allocated places, whether the allocation occurred before, on or after commencement of this Schedule. It also provides that the previous Division 16 of the Aged Care Act, as was in force immediately before the commencement of this Schedule continues to apply on or after commencement in relation to applications for the transfer of places, and applications for the transfer of provisionally allocated places, that were made before commencement of this item. SCHEDULE 2 -- AMENDMENT OF THE AGED CARE ACT Provisionally Allocated Places Item 1 - Subsection 15-7(1) Item 2 - Paragraph 15-7(2)(b) These items omit the words "2 years" (wherever occurring) and substitute them with the words "4 years". This change extends the provisional allocation period to four years and aims to reduce red tape for approved providers by reducing the need to apply for extensions. This means that after a place is provisionally allocated, the approved provider will have four years to become ready to provide care. Currently, approved providers only have two years to build a new facility or refurbish an existing facility. The amendments proposed by this Bill mean approved providers have longer to prepare facilities and will not be required to seek as many extensions. Item 3 - Paragraphs 15-7(3)(b) and (c) This item repeals paragraphs 15-7(3)(b) and (c) and substitutes a new paragraph (b) which specifies circumstances in which the Secretary must extend a provisional allocation period. The Secretary will only be able to grant a first or second extension where the extension is justified in the circumstances. The Secretary will only be able 10


to grant a third or further extension if exceptional circumstances justify the granting of a further extension. This change aims to ensure that care is provided to older Australians in a reasonable timeframe by encouraging approved providers to make their provisionally allocated take effect in a timely manner. It removes the ability for a provisionally allocated place to be allocated without care being provided for an indefinite period of time unless there are exceptional circumstances. Item 4 - After subsection 15-7(3) This item inserts new subsection 15-7(3A) which provides for the Allocation Principles to specify matters that must be regarded when considering whether exceptional circumstances justify a further extension being granted. Item 5 - Paragraph 15-7(5)(b) This item makes technical changes consequential on omitting part of subsection 15- 7(5) in item 6 below. Item 6 - Subsection 15-7(5) This item will omit the words "and, within that period notify that the person accordingly." This change is consequential to the insertion of 15-7(5A) in item 7 below. Item 7 - After subsection 15-7(5) This item will insert new subsection 15-7(5A). This amendment specifies the time period for notice to be given about a decision to grant an extension or reject the application for an extension. Item 8 - Subsection 15-7(6) This item will omit the words "unless the Secretary is satisfied that the applicant meets the criteria in the Allocation Principles for increasing or decreasing the period of the extension". This change aims to streamline the management of places by clarifying that any extensions granted are only for 12 months. Item 9 - At the end of section 15-7 This item will add new subsection 15-7(7) which specifies when the provisional application period ends after an application for an extension is rejected. This amendment includes reference to when there is no further reconsideration or review of the decision. This includes any reconsideration under sections 85-4 or 85-5 of the Aged Care Act and any subsequent tribunal or court proceedings. Item 10 - Application provision This item provides that the changes made to section 15-7 of the Aged Care Act, by items 1 to 9 above, will apply to places provisionally allocated before, on or after the commencement of this Part. These changes apply to places provisionally allocated before commencement in order to streamline the management of provisionally allocated places and encourage the timely provision of aged care. The changes will be deemed to apply from the time which the provisional allocation was made. The provisional allocation period that applies will be based on the amount of years the place has been allocated as outlined in the table below. 11


The capping of the extensions available at two years for allocations made before commencement, unless there are exceptional circumstances, may represent a disadvantage for approved providers who were previously able to apply for an unlimited amount of extensions. However, it is necessary that this change applies to these allocations in order to ensure that residential aged care is delivered to older Australians within reasonable timeframes. It is essential that these places do not remain allocated without taking effect for a substantial period of time unless there are exceptional circumstances. Length of time since provisional Provisional Allocation Period that allocation was made Applies 0 years Provisional allocation period of 4 years 1 year 1 year into the provisional allocation period of 4 years (3 years remaining) 2 years 2 years into the provisional allocation period of 4 years (2 years remaining) 3 years 3 years into the provisional allocation period of 4 years (1 year remaining) 4 years Will have to apply for 12 month extension and show the extension is justified in the circumstances 5 years Will have to apply for 12 month extension and show the extension is justified in the circumstances 6+ years Will have to apply for 12 month extension and show that exceptional circumstances justify the further extension. If the Secretary is not satisfied that exceptional circumstances justify a further extension, the provisional allocation will lapse and the places will return to the Department for future reallocation. 12


 


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