Senate Community Affairs Legislation Committee – Report on the Aged Care Bill 2024

The Aged Care Bill 2024 (Cth) (Bill) was introduced into the House of Representatives on 12 September 2024 and is set to be enacted on 1 July 2025. As part of the legislative process, the Bill was referred to the Senate Community Affairs Legislation Committee (Committee) for inquiry (Inquiry) and report (Report). The Inquiry was chaired by ALP Senator Marielle Smith and held public hearings across the country throughout October and received 185 public submissions on the Bill. The Report was released on 4 November 2024. The Report made one recommendation with bipartisan support:

‘that the Bill be passed’

Funding

The Committee heard evidence that ensuring sustainable funding measures was ‘critical’. Several providers gave evidence that current funding did not provide sufficient funds for facility improvements or expansion, which are needed to support a growing aging population.

Whilst supportive of the new funding scheme, providers raised concerns about the cost of transitioning to, and cost of compliance with, the new system. In response, the Department of Health and Aged Care (Department) noted they are developing ‘an integrated readiness plan’ to provide support for both the aged care sector and older Australians to transition.

The Report acknowledged that changes to Refundable Accommodation Deposits (RAD) are one of the measures to increase funding for providers. However, regional and remote providers highlighted that an increase to RADs would unlikely benefit regional and remote areas.

Providers and advocacy groups raised concerns about means-tested co-contributions, arguing that caps on hours of domestic assistance in Support at Home packages are too low. Providers also raised concerns about the reduction of the cap on care management fees from 20% to 10%, noting ‘service fees are unlikely to reflect the real cost of delivering services’. In response, the Independent Health and Aged Care Pricing Authority (IHACPA) told the Committee that data used to inform pricing was taken from across the aged care sector, including providers of all sizes.

Enforcement and protection

The Inquiry highlighted tensions surrounding the introduction of a positive obligation to uphold the Statement of Rights, with some submitters arguing that this obligation will be ‘watered down’ through a lack of enforceability and its intention to apply to providers as a ‘one-size fits all’. In response to this concern, the Office of the Inspector-General of Aged Care (OIGAC) identified that an individual may lodge a complaint with the Complaints Commissioner to enforce their rights, however, raised concerns regarding the lack of clarity surrounding the proactive measures the Complaints Commissioner can undertake to uphold an individual's rights.

There was a mixed response to the removal of criminal penalties from the Bill. Providers generally welcomed the removal due to the potential adverse impacts the criminal penalties may have had on workforce recruitment and retention. In contrast, some submitters argued that the removal of criminal sanctions diminishes the protective measures designed to safeguard individuals accessing the aged care system.

Providers acknowledged the importance of whistleblower protections but held concerns that disclosures can be made to aged care workers which would require all staff to understand how to appropriately manage disclosures. In response, some submissions recommended that providers should instead be required to identify specific people or roles who are authorised to receive a disclosure.

Aged Care Rules

Reservations were raised about the impact of the Aged Care Rules 2024 (Rules) on the operation of the new framework, and the lack of public visibility of the Rules. The OIGAC noted the ambiguity surrounding the operation of many clauses in the Bill which depend on the Rules. In response, the Department clarified that the Rules can only be finalised and tabled following the passage of the Bill.

Transition timeline

The need to update existing systems and procedures to comply with the Bill prompted calls for greater support for providers in the transition process.
Multiple providers called for a 12-month transition period to enable providers to comply with the Act following release of the Rules. The Aged Care Quality and Safety Commission (ACQSC) confirmed it is working with the Department to ‘streamline the transition to the new registration framework’. The Opposition noted in the Report that a separate transitional Bill will be tabled this month but is yet to be released.

Worker screening

The Inquiry found the public was largely in favour of a national registration scheme which requires a minimum standard for aged care workers. However, some submissions emphasised that providers are best-placed to make decisions regarding staff suitability and should ultimately have the final say on potential workers whose background checks raise issues. This was highlighted as a particularly important consideration for First Nations workers, who ‘are often best positioned to provide culturally safe care to other First Nations people’.

Recommendations by the Opposition

Whilst acknowledging the Bill is integral to delivering key recommendations from the Aged Care Royal Commission, the Opposition noted the Bill in its current form does not fulfill those recommendations. In the Report, the Opposition recommended the Bill be passed with amendment and provided over 30 recommendations.

The Opposition has previously been integral in ensuring amendments to the Bill in its current form, including the introduction of full grandfathering agreements, a reduced, lifetime cap on care contributions, the removal of ‘worker voice’ provisions and the removal of strict liabilities and criminal penalties, amongst others.

Regulation

• Recommendation 4: Refer all relevant Rules pertaining to the Aged Care Bill 2024 to the Senate Standing Committee for Community Affairs for inquiry and public comment.
• Recommendation 8: The Government adopt an approach which ensures providers are not penalised until full transition has been completed.
• Recommendation 31: Increase Parliamentary scrutiny in relation to the Commissioner's powers in making decisions which involve a civil penalty.

Care

• Recommendation 2: Ensure aged care places cannot be reduced unless demand for services has decreased.
• Recommendation 18: Allow greater flexibility in care minutes to allow RACs to deliver individualised care within the limitations of their market, while still ensuring high quality care.
• Recommendation 19: Give further consideration to regulatory requirements to ensure that the right for older people to take risks remains central to high-quality care requirements.
• Recommendation 20: Introduce a mandate that ensures an aged care resident is never denied access to the person that they designate under appropriate authority.
• Recommendation 27: Emphasise the value offered by organisations who provide value through community engagement and inadvertent care.

Reporting

• Recommendation 1: Require the System Governor to produce a quarterly report on the current waitlist and wait times from application to service commencement.
• Recommendation 30: Ensure provider reporting remains fit for purpose, proportionate and delivers real value by reducing unnecessary or duplicative reporting requirements.

Timing

• Recommendation 3: Release the schedule of Rules prior to the Bill being passed.
• Recommendation 5: Revise the timeframe for the commencement of the Support at Home Programme to allow sufficient time for implementation.
• Recommendation 6: Require the Government to provide certainty through a clear transition path including implementation information beyond 1 July 2025.
• Recommendation 7: Include a provision in the transition arrangements that ensures the start date for all changes that require ICT builds be set on a date not less than six months following (a) receipt of pricing from IHACPA, (b) tabling of the chapter 4 Rules, and (c) all associated Government ICT changes be in place (or, at least scoped to the extent that would provide certainty regarding the systems interface with providers IT).
• Recommendation 9: Expedite the CHSP replacement program to give providers sufficient time to make necessary changes.
• Recommendations 22 and 23: Shorten the review period of the new Accommodation Supplement from 5 years to 1 year and the review period of the new Aged Care Act from 5 to 3 years.

Fees

• Recommendation 10: The Government undertake further consultation on care management fee caps, including with clinicians, to provide greater transparency about the factors used to determine the Service Lists.
• Recommendation 11: The Government specifically review their determination to cap cleaning and gardening services and the categorisation of activities such as showering within the Service Lists.
• Recommendation 21: Exclude RADs from aged care testing provisions where the person has sold their family home to pay the RAD, to align the treatment of a RAD to the age pension assessment and recognise that residential aged care is an individuals’ home.
• Recommendation 28: Ensure the liability for unrecoverable debts’ rests with the appropriate entity to manage risk, such as shifting the liability for bad or uncoverable debts from providers to Government entities such as Services Australia.

Content of the Bill

• Recommendations 13 and 14: Include an explicit definition of 'hardship' in the Bill and include clear definitions of terms, including metrics which providers will be measured against, in the Bill rather than Rules.
• Recommendation 15 and 24: Remove supporter provisions from the Bill to allow additional time for consultation and remove the provision which allows an agreement for additional services to be made after a participant has entered care.
• Recommendation 16: Clarify who within an aged care organisation should be authorised to receive a disclosure, including the provision for an employee to opt out of being required to receive such disclosures.
• Recommendation 17: Introduce a time-based obligation for complaint determinations in the Bill and urge the Government to explore additional measures to ensure the integrity of complaint reconsiderations and reviews.
• Recommendation 25: Amend worker screening provisions to allow service providers the discretion to make the final decisions.

Next steps for the Bill

Members of the House of Representatives are now undertaking comprehensive debate on the Bill

Our experienced Aged Care Team is here to assist you through the ongoing sector reforms. We are working closely with our clients to tailor solutions for their circumstances, as well as developing package offerings. If you have questions or would like to discuss these reforms, we would be delighted to assist.
The debate process will provide for potential amendments, before Members of Parliament vote on the Bill in its final form during the third reading. The Bill will then progress to the Senate for further debate.

Aged Care Minister Anika Wells suggested that the Government aims to pass the Bill before the end of the year, which would require the Bill to pass through Parliament in the 8 remaining sitting days.

Our experienced Aged Care Team is here to assist you through the ongoing sector reforms. We are working closely with our clients to tailor solutions for their circumstances, as well as developing package offerings.

If you have questions or would like to discuss these reforms, we would be delighted to assist.