Senate

Aged Care Legislation Amendment (Improved Home Care Payment Administration No. 2) Bill 2020

Revised Explanatory Memorandum

(Circulated by authority of the Minister for Aged Care and Senior Australians, Senator the Hon Richard Colbeck)
This memorandum takes account of amendments made by the House of Representatives to the bill as introduced.
This revised explanatory memorandum responds to concerns raised by the Senate Standing Committee for the Scrutiny of Bills in Scrutiny Digest No. 15 dated 11 November 2020 and in Scrutiny Digest No. 17 dated 2 December 2020

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

AGED CARE LEGISLATION AMENDMENT (IMPROVED HOME CARE PAYMENT ADMINISTRATION NO. 2) BILL 2020

The Aged Care Legislation Amendment (Improved Home Care Payment Administration No. 2) Bill 2020 (the 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

The Bill amends both the Aged Care Act 1997 and the Aged Care (Transitional Provisions) Act 1997. The Bill makes a consequential amendment to the A New Tax System (Goods and Services Tax) Act 1999 to ensure that the supply of home care remains GST-free.

The Schedules in the Bill make amendments to improve financial accountability and allow for better transparency over the actual use of funds for home care service delivery by requiring approved providers to report the cost of the services provided to home care recipients to the Commonwealth in order to be paid subsidy. The Bill specifies that the Commonwealth will retain, on behalf of home care recipients, the Commonwealth subsidy that may be in excess of the services provided, to be drawn down in future. Providers maintain the responsibility for managing consumer contributions towards their home care package.

Approved providers are currently required to provide a monthly statement to their home care recipients that shows the care recipient's available funds, how the funds are being spent (i.e. care and services delivered) and the amount of unspent funds.

The measures in the Bill improve financial accountability and allow for better transparency over the actual use of funds for home care service delivery by requiring approved providers to also report to the Commonwealth the cost of care and services delivered to the home care recipient each month in order for the subsidies to be paid to the approved provider.

In the 2019-20 Budget, the Government announced reforms to improve payment administration for home care packages to address concerns regarding unspent funds and align home care arrangements with other Government programs.

Currently, approved providers hold and manage any accumulated unspent funds that may arise over time on behalf of the home care recipient if the cost of the care and services they access is less than the sum of their home care fees and subsidies paid by the Commonwealth.

The Bill gives effect to the second stage of reforms to improve payment administration arrangements for home care packages announced by the Government in the 2019-20 Budget. The first stage of the reforms to change home care subsidy from being paid in advance to being paid in arrears was introduced by the Aged Care Legislation Amendment (Improved Home Care Payment Administration No. 1) Bill 2020.

In the first stage, the home care subsidy paid to an approved provider changes from being a payment made in advance of the home care services being delivered to a consumer, to a payment made in arrears after the services have been delivered to a home care consumer. The home care subsidy continues to be paid at the full rate.

In the second stage of the reforms introduced by this Bill, the Government intends to continue to pay home care subsidy in arrears, however the payments will be based on actual care and services delivered. This will allow unspent home care subsidy to accumulate with the Commonwealth on behalf of the home care recipient instead of with an approved provider and will provide better transparency over the actual use of funds for home care service delivery.

The Bill introduces a mechanism whereby the Commonwealth portion of the provider held unspent funds is taken into account for the purposes of the home care subsidy calculator if the provider elects to return unspent funds to the Commonwealth.

Providers who elect to return unspent funds will do this through a 100 per cent subsidy reduction from the cost of the care and services provided until the unspent funds are exhausted.

Human rights implications

The Bill engages the following human rights as contained in Articles 11 and 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) and Articles 3, 5, 25 and 28 of Convention of the Rights of Persons with Disabilities (CRPD):

the right to an adequate standard of living;
the right to the enjoyment of the highest attainable standard of physical and mental health;
the rights of equality and non-discrimination; and
the right to choice for persons with disabilities.

The Government recognises that older people want to remain living in their own home for as long as possible and may need to receive care to do so. As such, the Government subsidises home care packages to provide comprehensive home-based care that can improve older Australians quality of life and help them remain active and connected to their communities.

This involves the payment of subsidy to approved providers for the provision of care and services to people with a condition of frailty or disability who require assistance to achieve and maintain the highest attainable standard of physical and mental health.

The home care package program ensures access to care that is affordable by, and appropriate to, the needs of people who require it.

The measures in the Bill improve financial accountability and allow for better transparency over the actual use of funds for home care service delivery by requiring approved providers to report to the Commonwealth cost of care and services delivered to the home care recipient each month in order for the subsidies to be paid to the approved provider. The Bill will also allow the Commonwealth to retain the Commonwealth subsidy that may be in excess of the services provided, to be drawn down in future.

In doing so, the Bill positively engages the rights set out in Articles 11 and 12 of the ICESCR and Articles 25 and 28 of the CRPD by promoting the right to an adequate standard of living and the right to the enjoyment of the highest attainable standard of physical and mental health.

The Bill promotes the rights of equality and non-discrimination, as set out in Article 5 of the CRPD, by improving the financial accountability of, and allowing for better transparency over the actual use of the subsidies paid to provide care and services to those who need them, regardless of race, culture, language, gender, economic circumstances or geographic location.

The home care package program positively engages the rights for persons with disabilities set out in Articles 25 and 28 of the CRPD, including the right to enjoyment of the highest attainable standard of health and the right to an adequate standard of living without discrimination on the basis of disability, by providing genuine consumer direction of care. Improving the home care payment administration arrangements by introducing more transparency over the actual use of home care subsidy further engages these rights.

The Bill is the second stage of reforms to improve payment administration arrangements for home care packages and strengthens the integrity of the home care package program. As facilitated by this Bill, strengthening the home care package program leads to an improvement in the lives of older Australians, including those with disabilities.

The Bill will not affect the eligibility of home care recipients for home care subsidy or the amount of home care subsidy payable for eligible home care recipients and ensures that the supply of home care remains GST-free.

Conclusion

The Bill promotes human rights to the highest attainable standard of physical and mental health and is compatible with the human rights and freedoms recognized and declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.


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