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

Notes on Clauses

Clause 1 - Short Title

This clause provides that the Bill, once enacted, may be cited as the Aged Care Legislation Amendment (Improved Home Care Payment Administration No. 2) Act 2020.

Clause 2 - Commencement

This clause sets out when the Bill commences. Item 1 to the table provides that sections 1 to 3 of the Act commence the day the Act receives the Royal Assent.

Item 2 to the table provides that Parts 1 and 2 of Schedule 1 commence on a day to be fixed by Proclamation. However, if the commencement of the provisions is not fixed by a Proclamation registered on the Federal Register of Legislation within 6 months after the Royal Assent, the provisions in Parts 1 and 2 of Schedule 1 are repealed on the day after the end of that period.

Item 3 to the table provides that Part 3 of Schedule 1, commences immediately after the commencement of Parts 1 and 2 of Schedule 1 to the Bill. However, if the provisions in Parts 1 and 2 of Schedule 1 do not commence, the provisions in Part 3 of Schedule 1 are repealed at the same time as the provisions in Parts 1 and 2 of Schedule 1 are repealed.

Clause 3 - Schedule(s)

This clause provides that each Act that is specified in a Schedule to this Bill is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item has effect according to its terms. This is a technical provision which gives operational effect to the amendments contained in the Schedules.

Schedule 1 amends the Aged Care Act 1997 (the Aged Care Act) and the Aged Care (Transitional Provisions) Act 1997 (the TP Act) in relation to the payment of home care subsidy. Schedule 1 also 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.

SCHEDULE 1 - AMENDMENTS

Aged Care Act 1997

Item 1 - Before section 48-1

This item inserts the heading of Subdivision A - Amount of home care subsidy immediately before section 48-1

Item 2 - Subsection 48-1(2)

This item repeals subsection 48-1(2) and substitutes in its place new subsections 48-1(2) and 48-1(3). New subsection 48-1(2) sets out the home care subsidy calculator and the steps to be followed when calculating the amount of home care subsidy for a care recipient.

New subsection 48-1(3) identifies circumstances when the home care account balance is not added to the Commonwealth contribution amount for the purposes of Step 4 of the calculator. Step 4 of the calculator recognises that in some situations an approved provider may need time to receive and process outstanding invoices for the home care account balance to be finalised, such as when a home care recipient has ceased to be provided with home care from a particular approved provider and then commences to receive home care from a new approved provider. The Subsidy Principles will be amended to provide the relevant period for new subsection 48-1(3).

Item 3 - After section 48-1

This item inserts a new heading, Subdivision B - Commonwealth contribution amount, and new section 48-1A which sets out the Commonwealth contribution amount calculator.

Items 4, 5 and 6 - Subsection 48-3(1), section 48-4 and sub-section 48-9(1)

Items 4, 5 and 6 omit the words "home care subsidy" and substitute the words "Commonwealth contribution amount" in their place in subsection 48-3(1), section 48-4 and subsection 48-9(1) respectively.

Item 7 - At the end of Part 3.2

This item inserts new Subdivision C - Shortfall amount and new Subdivision D - Home care accounts.

New section 48-13 in Subdivision C sets out how to calculate the shortfall amount for a payment period. New subsection 48-13(1) sets out the shortfall amount calculator.

The shortfall amount calculator operates so that where a provider elects to return the Commonwealth portion of a care recipient's unspent home care funds to the Commonwealth, the price of the care and services provided in the payment period will be reduced by the amount of the Commonwealth portion of unspent funds that were available at the end of the previous payment period, up to 100% of the price. The User Rights Principles will be amended to set out any requirements for an approved provider to elect to return the Commonwealth portion of a care recipient's unspent home care funds.

New subsection 48-13(2) sets out that the Subsidy Principles must specify the way to work out the price for the home care that has been provided during a payment period for the purposes of step 1 of the shortfall amount calculator.

New subsection 48-13(3) sets out that the Subsidy Principles may require the price for the home care that has been provided to include or to exclude amounts in specified circumstances.

New subsection 48-13(4) sets out that the Subsidy Principles may specify the care recipient contribution amount, or how to work out the care recipient contribution amount for the purposes of the shortfall amount calculator.

New section 48-14 in Subdivision D sets out that on or after the implementation day (the meaning of implementation day is inserted by Item 10) there will be a home care account for each prioritised home care recipient.

If a person is a prioritised home care recipient on the implementation day, they will start to have a home care account on the implementation day. If a person is not a prioritised home care recipient on the implementation day, they will start to have a home care account on the day the Secretary first makes (after the implementation day) a determination under section 23B-1 of the Aged Care Act that the person is a prioritised home care recipient.

The creation of a home care account is necessary to facilitate the management of any unspent subsidy that the Commonwealth may commence to hold on behalf of home care recipients.

Debits from, and credits to, a home care account will take place when unspent subsidy is added to, or drawn from, a home care account.

New section 48-15 in Subdivision D sets out the circumstances in which a home care credit arises in a home care account.

New section 48-16 in Subdivision D sets out the circumstances in which a home care debit arises in a home care account.

New section 48-17 in Subdivision D sets out the meaning of home care account balance for the purposes of the Act. The home care account balance in a care recipient's home care account at a particular time equals the sum of the home care credits in that account, less the sum of the home care debits in that account at the time.

New section 48-18 in Subdivision D sets out that a home care account ceases when the care recipient dies.

Item 8 - Subparagraphs 56-2(b)(i) and (c)(i)

This item inserts the words "the care recipient" after the word "charge" in subparagraphs 56-2(b)(i) and (c)(i) to make clear that the limit on charging in those subparagraphs is a limit on charging the care recipient.

Item 9 - Section 96-1 (table item 23)

This item omits the words "Part 4.2" from table item 23 in section 96-1 and substitutes the words "Parts 3.2 and 4.2" in their place. This amendment will enable the User Rights Principles to be amended to provide for any matters required or permitted, or necessary or convenient, under Part 3.2 of the Act relating to the Home Care Subsidy.

Item 10 - Clause 1 of Schedule 1

Item 10 amends Clause 1 of Schedule 1 - Dictionary to the Act to insert the meanings of the terms "home care account" and "home care credit" and "home care debit" and "implementation day".

Home care account means an account that arises under new section 48-14.

Home care credit has the meaning given by new section 48-15.

Home care debit has the meaning given by new section 48-16.

Implementation day means the day that Part 1 of Schedule 1 to the Aged Care Legislation Amendment (Improved Home Care Payment Administration No. 2) Act 2020 commences.

Item 11 - Clause 1 of Schedule 1 (definition of payment period)

Item 11 amends Clause 1 of Schedule 1 - Dictionary to the Act by repealing the definition of "payment period" and substituting in its place a new definition. The new definition of "payment period" provides that this term is defined in section 43-2 in relation to residential care, and section 47-2 in relation to home care.

Aged Care (Transitional Provisions) Act 1997

Item 12 - Subsections 48-1(2) to (4)

Item 12 repeals subsections 48-1(2) to (4) of the TP Act and substitutes new subsections 48-1(2) and 48-1(3) in their place.

Subsections 48-1(2) to (4) of the TP Act deal with the amount of home care subsidy that is payable to an approved provider in respect of a care recipient as determined by the Minister and worked out in accordance with a method determined by the Minister by legislative instrument.

New subsection 48-1(2) provides that the amount of home care subsidy payable to an approved provider in respect of a care recipient in respect of the relevant payment period is the amount specified in the Aged Care (Transitional Provisions) Principles or the amount worked out in accordance with a method specified in the Aged Care (Transitional Provisions) Principles.

The intention of new subsection 48-1(3) is to allow new rules in the Aged Care (Transitional Provisions) Principles to maintain consistency with the current structure for working out the amount of home care subsidy payable to an approved provider.

Item 13 - Clause 1 of Schedule 1 (definition of payment period)

Item 13 amends Clause 1 of Schedule 1 - Dictionary to the TP Act by repealing the definition of "payment period" and substituting in its place a new definition. The new definition of "payment period" provides that this term is defined in section 43-2 in relation to residential care, and section 47-2 in relation to home care.

A New Tax System (Goods and Services Tax) Act 1999

Item 14 - Subsection 38-30(1)

Item 14 repeals subsection 38-30(1) of the A New Tax System (Goods and Services Tax) Act 1999 and substitutes it with a new subsection 38-30(1) to ensure that the supply of home care remains GST-free.

Item 15 - Application of amendments

Item 15 specifies that the amendments to the Aged Care Act 1997 and the TP Act made by this Part apply in relation to payment periods beginning on or after the day this item commences.

Item 16 - Rules

Item 16 of the Bill enables the creation of rules by the Minister, in the form of a legislative instrument, that pertain to transitional matters. The proposed changes introduced by this Bill and the complexity of the home care payment administration system require such a rule making power to permit legislative amendments to be made to address any unanticipated consequences as a result of the transition to the new payment administration arrangements.

Rules made under this item are not intended to adversely affect any individuals because they would only be made in circumstances where it was necessary to address detrimental consequences of the Bill. As a result, any rules (if made) would not operate to disadvantage any person.

Sub-item 16(1) sets out that the Minister may, by legislative instrument, make rules prescribing matters of a transitional nature (including any saving or application provisions) relating to the amendments or repeals made by this Act.

Sub-item 16(2) sets out that the rules may not create an offence or civil penalty; may not provide powers of arrest, detention, entry, search, or seizure; may not impose a tax; or directly amend the text of an Act.

Sub-item 16(3) states that the rules may provide that, during or in relation to the first 12 months after the commencement of the item, the Act or any other Act or instrument has effect with any modifications prescribed by the rules.

Sub-item 16(3) is intended to allow the making of subordinate legislation to deal expeditiously with matters which may have unintentionally unfairly affected home care recipients or approved providers. It is considered that the most practical and appropriate way to quickly address emerging circumstances regarding the administration of home care subsidy payment arrangements is to include a provision that subordinate legislation may, during the first 12 months after the commencement of the item, modify the provisions as appropriately required.

Sub-item 16(4) sets out that subsection 12(2) of the Legislation Act 2003 does not apply to rules made under this item. This is to allow the rules, which under this item must be made within 12 months after the commencement of this item, to apply from the commencement of this item in order to expeditiously address emerging issues relevant to the administration of home care subsidy payments resulting from the commencement of this Bill.

The purpose of sub-item 16(4) is to ensure that all approved providers that provide home care, that may be affected by the provisions of the Bill and any subsequent rules made under sub-item 16(3), will be subject to the same legislative requirements with effect from a date specified by the rules, if necessary. In addition, it is intended that the rules made under item 16 should operate beneficially, so as to not affect the eligibility of home care recipients to home care subsidy or the amount of home care subsidy payable for eligible home care recipients.

Part 2 - Variation of claims for home care subsidy

Aged Care Act 1997

Item 17 - Paragraph 47-4A(1)(a)

Item 17 repeals paragraph 47-4A(1)(a) of the Act in relation to the time after a payment period in which an approved provider may vary a claim for payment. Item 17 substitutes a new paragraph 47-4A(1)(a) that sets out that an approved provider may make a variation to a claim made in respect of a payment period within the period specified in the Subsidy Principles, or if no such period is specified, within 2 years after the end of that payment period (which is the existing period in which an approved provider may vary a claim in respect of a payment period).

The intention of item 17 regarding periods in which approved providers can make a variation to a claim for payment is to facilitate the management of any unspent subsidy the Commonwealth may commence to hold on behalf of home care recipients and the calculation of the balance of a care recipient's home care account.

It is noted that there is no change to paragraph 47-4A(1)(b) of the Aged Care Act which allows the Secretary to determine a longer period in which an approved provider may vary a claim in respect of a payment period.

Item 18 - After subsection 47-4A(1)

Item 18 inserts new subsection 47-4A(1A) after subsection 47-4A(1) of the Aged Care Act. New subsection 47-4A(1A) sets out that the Subsidy Principles may specify different periods in respect of different classes of claim variations.

Item 18 facilitates the management of any unspent subsidy that the Commonwealth may commence to hold on behalf of home care recipients as a result of this Act and the calculation of the balance of a care recipient's home care account.

Aged Care (Transitional Provisions) Act 1997

Item 19 - Paragraph 47-4A(1)(a)

Item 19 repeals paragraph 47-4A(1)(a) in relation to the time after a payment period in which an approved provider may vary a claim for payment. Item 19 substitutes a new paragraph 47-4A(1)(a) that sets out that an approved provider may make a variation to a claim made in respect of a payment period within the period specified in the Aged Care (Transitional Provisions) Principles, or if no such period is specified, within 2 years after the end of that payment period (which is the existing period in which an approved provider may vary a claim in respect of a payment period).

The intention of item 19 regarding periods in which approved providers can make a variation to a claim for payment is to facilitate the management of any unspent subsidy the Commonwealth may commence to hold on behalf of home care recipients and the calculation of the balance of a care recipient's home care account.

It is noted that there is no change to paragraph 47-4A(1)(b) of the TP Act, which allows the Secretary to determine a longer period in which an approved provider may vary a claim in respect of a payment period.

Item 20 - After subsection 47-4A(1)

Item 20 inserts new subsection 47-4A(1A) after subsection 47-4A(1) of the TP Act. New subsection 47-4A(1A) sets out that the Aged Care (Transitional Provisions) Principles may specify different periods in respect of different classes of claim variations. Item 20 facilitates the management of any unspent subsidy that the Commonwealth may commence to hold on behalf of home care recipients as a result of this Act and the calculation of the balance of a care recipient's home care account.

Item 21 - Application of amendments

Item 21 specifies that the amendments of subsection 47-4A(1) of the Aged Care Act and subsection 47-4A(1) of the TP Act made by this Part apply in relation to any claim for payment made in respect of a payment period beginning on or after the day this item commences.

Item 21 also sets out that on and from the day that is 12 months after the day this item commences, the amendments of subsection 47-4A(1) of the Aged Care Act and subsection 47-4A(1) of the TP Act made by this Part also apply in relation to any claim for payment made in respect of a payment period beginning before the day this item commences.

Part 3 - Previous claims

Aged Care Act 1997

Item 22 - Paragraph 47-1(1A)(b)

Item 22 repeals paragraph 47-1(1A)(b), which will be inserted into the Aged Care Act 1997 by item 1 of Schedule 1 to the Aged Care Legislation Amendment (Improved Home Care Payment Administration No. 1) Act 2020, and substitutes in its place a new paragraph 47-1(1A)(b) setting out that subsidy is only payable if the approved provider has made a claim in respect of the payment period to the Secretary and the approved provider has made claims in respect of each preceding payment period from when the approved provider was eligible for home care subsidy.

Item 22 will facilitate the management of any unspent subsidy the Commonwealth may commence to hold on behalf of home care recipients as a result of this Act. This is because an approved provider will need to have made claims for payment for all preceding payment periods for the Commonwealth to correctly calculate a care recipient's home care account balance.

Aged Care (Transitional Provisions) Act 1997

Item 23 - Paragraph 47-1(1A)(b)

Item 23 repeals paragraph 47-1(1A)(b), which will be inserted into the TP Act by item 5 of Schedule 1 to the Aged Care Legislation Amendment (Improved Home Care Payment Administration No. 1) Act 2020, and substitutes in its place a new paragraph 47-1(1A)(b) setting out that subsidy is only payable if the approved provider has made a claim in respect of the payment period to the Secretary and the approved provider has made claims in respect of each preceding payment period from when the approved provider was eligible for home care subsidy.

Item 23 will facilitate the management of any unspent subsidy the Commonwealth may commence to hold on behalf of home care recipients as a result of this Act. This is because an approved provider will need to have made claims for payment for all preceding payment periods for the Commonwealth to correctly calculate a care recipient's home care account balance.

Item 24 - Application of amendments

Item 24 specifies that the amendments of the Aged Care Act and the TP Act made by this Part apply in relation to payment of home care subsidy in respect of payment periods beginning on or after the day this item commences.


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