ACAR delayed pending passage of Bills

Minister for Ageing, Mark Butler says aged care providers and older Australians alike may be left pondering their futures if the passage of five bills, currently before the House of Representatives, does not proceed.

Above: Minister for Ageing, Mark Butler

By Keryn Curtis

In an exclusive interview with Australian Ageing Agenda this morning, the Minister has said that he will have no choice but to delay the announcement of the results of the 2012-13 Aged Care Approvals Round (ACAR), expected next month, if the five bills which provide the legislative framework for the Government’s $3.7 million Living Longer Living Better aged care reform package are not passed.

Mr Butler said the decision to delay the announcement of up to 5,835 home care packages and 8,341 residential aged care places has not been taken lightly.  However, he said opposition to the bills in the Parliament has created a level of uncertainty which has made it unfeasible to proceed with the announcements that would otherwise be due as early as the first week of July.

“I have taken the view that it would not be responsible to release the outcomes of a process that would essentially depend on the aged care reforms going ahead.  If the bills don’t pass, given the degree to which the changes in home care in particular depend on the legislation, we would have to go back to the drawing board.”

Mr Butler said it was particularly important to ensure that providers, and more importantly, consumers could have confidence in the new home care packages due to commence on 1 July this year.  

“The legislation has to pass to underpin that. The alternative would be to make an announcement in the next week or two that I am unable to deliver on, which would be raising false hope.  

“At the end of the day, the parliament has always known that the new packages and other arrangements commence on 1 July and they won’t be able to commence unless the legislation is passed.  So the responsible thing is to hold off until we are confident,” he said.

Disappointed

Minister Butler said he was disappointed with the recent mixed messages and opposition regarding the bills that had been expressed to members of the lower house and senators, and to the Senate Standing Committee on Community Affairs, which has been undertaking an inquiry into the five bills and is due to report on 31 May.

“I had a high level of confidence some time ago but mixed messages, in particular from the provider peaks, have injected some uncertainty into the parliament.  

“Parliamentarians very broadly have been supportive of the aged care reforms.  But some have become a little unsettled by the mixed messages recently.  

“MPs have a range of questions, very much focused on the position of residential aged care providers.  

“In addition, the Opposition has now engaged in a blocking manoeuvre by introducing a motion to delay a vote in the House of Representatives pending the outcome of the current Senate Standing Committee on Community Affairs Inquiry.

“The legislation has been debated part way through and is due to be continued on Monday but the Opposition wants to defer that.  Our strong view is that the bills should move into the Senate for debate and consideration of amendments.  

“And the Senate will have the benefit of the [Senate Standing] committee report, which will allow for good, fulsome debate in the Senate,” he said.  

The Minister said that the Aged Care Financing Authority had worked hard to provide very particular advice about the impact of the reforms for providers.

“They have consulted very deeply – in an unprecedented way.  Not only with providers and the peaks but they have also commissioned a report from KPMG [released yesterday] modelling the outcomes of the changes [to the payment model involving choice for consumers about whether they pay a refundable accommodation deposit  (RAD) or a daily accommodation payment (DAP)].

“Some providers and people in the finance sector have expressed a concern about the impact of giving consumers choice about the way they pay.  I think the KPMG report largely puts that to bed,” he said.

Mr Butler said allowing consumer choice was not negotiable.

He also expressed concern that delays to the bills could put the whole reform package at risk because of practical timing issues and the large legislative workload before the parliament in the next few weeks. 

However he acknowledged that the two aged care provider peak bodies, Aged and Community Services Australia (ACSA) and Leading Age Services Australia (LASA) have now moved to address concerns regarding mixed messages from among their members by issuing a joint statement expressing  their support for the passage of the bills through the lower house.

The Minister said he remains optimistic and confident that the legislation can go through .He said, following the successful passage of the bills through the lower house, he would be ready to look at ACAR next week and announce the outcome shortly after that.

Australian Ageing Agenda will report further on the progress of the reforms this afternoon and in the coming days.

The Bills

The five Bills giving effect to the aged care reforms are currently before the House of Representatives while concurrently being considered by the Senate Standing Committee on Community Affairs:

Aged Care (Living Longer Living Better) Bill 2013

Australian Aged Care Quality Agency Bill 2013

Australian Aged Care Quality Agency (Transitional Provisions) Bill 2013

Aged Care (Bond Security) Amendment Bill 2013

• Aged Care (Bond Security) Levy Amendment Bill 2013 

Tags: acar, living-longer-living-better, senate-standing-committee-on-community-affairs,

7 thoughts on “ACAR delayed pending passage of Bills

  1. I wonder if the Minister and Providers are aware that over the past 2 weeks it has been revealed that the way the means test will be applied means that once somebody sells their house to pay a RAD the value of the sale of the house is then used to work out a fee they will pay for the cost of their care. Turning a $144,500 (deemed value) asset into, say a $ 350,000, asset means the resident will then pay more fees. Therefore, creating a financial disincentive for a RAD to be paid.
    The choice the resident and their families will have is – keep the house, rent it out and pay the periodical accommodation fee or sell the house and pay a RAD. If they sell the house and pay the RAD they will also pay extra fees.
    The likely outcome is that very few will choose to pay a RAD and therefore pay the daily fee. The opinion of the banks is that this way of treating the sale of the family home will significantly reduce the ability of Providers to gain RAD monies and therefore the banks will be unable to fund any future aged care development in terms of loan funds.
    As for those who already have loans and have used Bonds to build, then the prospect of not being able to replace these Bonds with a RAD is very high.
    Everybody has to do their own sums, but many will struggle to continue.
    It is interesting that the KPMG report has missed this point altogether in their assessment.

  2. It is indeed interesting that the Minister wants to rush this legislation through given its impact on an industry for which he holds responsibility given the additional level of control he seeks to have over its viability. The KPMG report itself concludes a bias towards DAF over RAD payments, and then interestingly and without explanation concludes a significant weighting towards RAD for high care, noting that will be the “saving grace”. Understandably ACFA members would have seen far more details of the modelling but nobody else has. The report itself highlights and supports the industry’s concern. If the Minister is fair dinkum and genuine he will accept amendments that ensure security to consumers and the age services industry, and not alter the treatment of the bond / RAD from the current policy, and once we see the impact then make a decision based on knowledge and not guesswork. Is the viability of an industry caring for 1,000,000 Australians and employing another 350,000 not worth being treated with respect and courtesy – or is it Minister simply dispensable if the guesswork is found tobe wrong? Of course if providers fall over the Department will just put it down to bad management, which is always the response when the reality of bad policy hits an industry now almost completely controlled through bureaucratic whim. Let the legislation pass, with appropriate amendments to address the concerns, and then the ACAR announcements can be made. After all, providers were given a whole six weeks leading up to Christmas, and we’re already 5 months down the path. Understanding that legislative changes are needed to give breath to aspects of the ACAR this is still achievable. It just needs a Minister with courage to make a moral rather than political, decision.

  3. There appears to be a tacit recognition that the proposed legislation is flawed and yet many are still pushing for it to be supported in both houses. And the question is WHY? A once in a decade opportunity and its flawed.

  4. The Minister can rest assured that he can at least not worry about Western Australia when it comes to any requirement to delay the announcement of the Aged Care Approval Round (ACAR). With only 85 of the 5835 home care packages available in the West and of the 1500 beds only 400 will be taken up leaving a 1100 under-subscription, WA is now used to waiting, since 2007, for the Government/DoHA to correct the collapse of aged care planning in WA. WA providers when questioned are clearly not convinced that the current Legislation will deliver the reform that is required for long term sustainability. It is not surprising that WA Federal politicians want to speak on the LLLB Bills as they have seen first hand the crisis WA providers have been facing since 2006/07 and most have long queues of providers and consumers wanting assistance and answers. Nearly all submissions to the Senate Standing Committee called for significant amendments to the proposed legislation and nothing has changed since those submissions.

  5. The Minister can rest assured that he can at least not worry about Western Australia when it comes to any requirement to delay the announcement of the Aged Care Approval Round (ACAR). With only 85 of the 5835 home care packages available in the West and of the 1500 beds only 400 will be taken up leaving a 1100 under-subscription, WA is now used to waiting, since 2007, for the Government/DoHA to correct the collapse of aged care planning in WA. WA providers when questioned are clearly not convinced that the current Legislation will deliver the reform that is required for long term sustainability. It is not surprising that WA Federal politicians want to speak on the LLLB Bills as they have seen first hand the crisis WA providers have been facing since 2006/07 and most have long queues of providers and consumers wanting assistance and answers. Nearly all submissions to the Senate Standing Committee called for significant amendments to the proposed legislation and nothing has cha nged since those submissions.

  6. Ah, now when is a threat not a treat. When ACAR in WA has 85 packages and a massive under-subscription in beds. Please Minister your mallet has been working in WA for so long your handle has worn off. It so nice to see your expressive terminology ” a level of uncertainty”, “unfeasible to proceed”, “until we are confident” and of course my personal favourite ” mixed messages”. Welcome to our world where budgets cannot be set, when income is unknown, where capital investment is non-existent, where staff are….missing/ presumed mining? When we question the need to debate legislation and present amendments supportive of industry needs, especially in regards the totally MIA concerns in rural, regional and remote we are causing you “disappointment”. Our problems have not gone away, step up, man up and do what is right for our seniors not for your party political shenanigans.

  7. I hope they ditch the whole thing! What a pity it is to ruin a creative/innovatice Community Care sector with the super restrictive CDC subsidy approach. Service providers and consumers have worked together in supplying services that build community capacity but an individualistic approach will burn this capacity building. There are thousands of CACP consumers receiving supports way above the set subsidy rates because services can find efficiencies across ‘packages’. All of these people will receive MUCH less as soon as the CDC rolls out. The people that don’t need the level of supports will still receive the set subsidy. It makes no sense!

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