Proposed second stage of legislative reforms for aged care in response to the Royal Commission  

05 October 2021

The Aged Care and other Legislation Amendment (Royal Commission Response No.2) Bill 2021The following is a high level summary of the proposed changes and the proposed commencement dates (the Bill) was introduced on 1 September 2021 and foreshadows the proposed legislative changes to respond to the Royal Commission into Aged Care Quality and Safety’s Final Report: Care Dignity and Respect.

The Bill is structured into 8 Schedules with varying proposed commencement dates, and some dates not yet specified.

The following is a high level summary of the proposed changes and the proposed commencement dates.

ScheduleProposed commencement dateProposed Changes
Schedule 1: Assessment and Funding1 October 2022The Aged Care Funding Instrument (ACFI) will be replaced by the Australian National Aged Care Classification (AN-ACC);
Calculation for funding split between a variable amount and a fixed amount;
Variable subsidy amount based on AN ACC level of resident;
Fixed subsidy amount based on the individual characteristics of the residential aged care service where the care is delivered, including whether the services is a rural and remote service or a specialist service;
The fixed subsidy amount is proposed to be the same for all residents of that service



Schedule 2:
Worker Screening and Registration
1 July 2022National pre-employment screening processes for aged care workers;
National Personal Care Worker/Personal Care Attendant registration scheme;
Introduction of an Aged Care Screening Database which providers can access to ensure that any potential workers have the appropriate employment checks and clearances;
Introduction of banning orders to prohibit or restrict a former, prospective or current aged care worker or governing person of an approved provider from being involved in all or specified types of aged care, or activities on behalf of an approved provider.
Schedule 3: Codes of Conduct1 July 2022Codes of Conduct to Key Personnel and aged care staff;
Increased investigation powers for the Aged Care Quality and Safety Commission (ACQSC);
Introduction of banning orders;
Civil penalties for non-compliance with the codes for both individuals and corporations where an approved provider is a corporation and there is a failure by an employee or governing person to comply with the code

Schedule 4: Serious Incident Response Scheme (SIRS) in Community Care
1 July 2022
Introduction of SIRS for Home care and Flexicare delivered in a community setting;
Introduction of a requirement for home care providers to implement and maintain an incident management system in accordance with the Quality of Care Principles 2014;
Expansion of the definition of a reportable incident to include home and community care providers;
Expansion of the current protected disclosure provisions to include disclosures made in a community care setting;
Expansion of the ACQSC's scope and authority to deal with incidents that are reported by commonwealth grant funded aged care services.

Schedule 5: Approved Provider Governance
1 March 2022Introduction of new:
Governance responsibilities regarding board membership;
Advisory body requirements;
Leadership and cultural requirements;
Reporting responsibilities regarding approved provider operations, including an annual statement on operations which will be made publicly available.
New requirements for approved providers to maintain an annual record that their Key Personnel are suitable to continue as Key personnel;
Scope for the ACQSC to request to view the annual key personnel review as part of their monitoring and investigation powers;
Proposed creation of strict liability offences which apply to key personnel who fail to notify an approved provider of a change in their circumstances which relate to their suitability to remain/continue as key personnel within 14 days of the change.

Schedule 6: Information Sharing and Enforcement Collaboration
No date specifiedIncreased scope for cross collaboration between Commonwealth Departments when investigating and responding to suspected or known non-compliance with obligations managing by providers of aged care, disability services and veterans affairs;
Increased information sharing to enable appropriate responses to cross sector risks.
Information sharing of protected information is limited to sharing information only where it will assist the regulatory body to carry out its' compliance, regulatory and enforcement functions
Schedule 7: Refundable Accommodation PaymentsNo date specifiedProposed changes are phase 2 of 3 phases being proposed to be implement a new financial prudential monitoring, compliance and intervention framework.
Increase in the scope of authority for the ACQSC to request information and documents regarding use of refundable accommodation deposits and accommodation bonds, including loans made using refundable accommodation deposits or accommodation bonds;
ACQSC will be able to issue an Infringement Notice where there is a failure to comply with a request to provide information or documents;
Proposed creation of strict liability offences for failure by a borrower to provide information or documents in response to a request by the ACQSC
Period of liability of an approved provider for an insolvency event and misuse of accommodation deposits or accommodation bonds has been expanded from 2 years to 5 years
Schedule 8: Independent Health and Aged Care Pricing AuthorityNo date specifiedExpansion of the functions of renamed Independent Health and Aged Care Pricing Authority to include provision of advice on:
Aged care pricing;
Aged care costing matters;
Health care pricing; and
Health care costing matters.

*Whilst there is no date specified in this current draft of the Bill, the date of commencement may be the date the Act receives Royal Assent (commences) or may be specified as part of further amendments to the Bill.

Whilst there may be further amendments made to the Bill, it is not anticipated that these amendments will significantly alter the content of the Bill, noting the Bill is based on the Royal Commission’s recommendations.

In consideration of the ground swell of changes facing the industry, we recommend Providers and their Boards take a proactive approach and start early familiarising and preparing for the implications and obligations imposed by the Bill.

Contact our Aged Care & Retirement Living Team to discuss how we can assist you with navigate the impact of these changes on your organisation.

This article was written by Sabine Phillips AM, Partner and Tamie Duncan-Bible, Senior Associate. 

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