Government quietly drops formal response to Aged Care Royal Commission on Budget Day – what reforms didn’t make the cut?

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After the fanfare of the Government’s interim response to the Royal Commission’s Final Report, there was no presser for its full response – or even a press release.

You can download the full 102-page response here.

As we reported in our top story, the Government has elected to take up in full or in part 126 of the Commissioners’ 148 recommendations – with another 12 to be further considered and six not accepted.

So, what were the major reforms that didn’t make the cut – or are still up in the air?

The Hon Scott Morrison MP Prime Minister of Australia The Hon Greg Hunt MP Minister for Health and Aged Care Senator the Hon Richard Colbeck Minister for Senior Australians and Aged Care Services

Recommendation 5: Australian Aged Care Commission [Not accepted]

By 1 July 2023, the Australian Aged Care Commission should be established under the new Act as a corporate Commonwealth entity within the meaning of the Public Governance, Performance and Accountability Act 2013 (Cth).

Unsurprisingly the Government has supported Commissioner Lynelle Briggs AO’s alternative Government‐led governance model led by a revamped Department of Health.

With aged care set to account for almost $25 billion in Government expenditure in five years’ time, the Government will want to maintain its control over funding and regulation.

Recommendation 25: A new aged care program [Accepted in-principle]

By 1 July 2024, the System Governor should implement a new aged care program that combines the existing Commonwealth Home Support Programme, Home Care Packages Program, and Residential Aged Care Program, including Respite Care and Short‐Term Restorative Care.

The Government accepted‐in‐principle this recommendation, saying it is “committed to improving outcomes for senior Australians requiring aged care supports”. But while they have committed to a redesign of the home care program and a single assessment program, the Government is still keeping residential care and home care separate – for the time being at least.

Recommendation 41: Planning based on need, not rationed [Accepted in-principle]

By 1 July 2024, the System Governor should replace the Aged Care Provision Ratio with a new planning regime which: a. supports a funding allocation that is sufficient to meet people’s entitlements for their assessed need b. provides for demand‐driven access to aged care based on assessed need.

Again, the Government has only committed to finalising the design of a new support at home program.

Recommendation 72: Equity for people with disability receiving aged care workers [Under consideration]

By 1 July 2024, every person receiving aged care who is living with disability, regardless of when acquired, should receive through the aged care program daily living supports and outcomes (including assistive technologies, aids and equipment) equivalent to those that would be available under the National Disability Insurance Scheme to a person under the age of 65 years with the same or substantially similar conditions.

The Government says this recommendation is subject to further consideration. The work on the new support at home program will look at the level of support available to people in aged care, including for people who would otherwise be eligible for the National Disability Insurance Scheme (NDIS) but for their age (over 65). This work should be completed by the end of 2022 so there is room for the Government to accept this one.

Recommendation 77: National registration scheme [Accepted in-principle]

By 1 July 2022, the Australian Government should establish a national registration scheme for the personal care workforce.

No surprises here. The Government has taken the advice of the Department of Health and backed a worker registration scheme, but not through an Australian Health Practitioner Regulation Agency (AHPRA) model which would require the Department to work with the States and Territories on its operation.

Recommendation 78: Mandatory minimum qualification for personal care workers [Under consideration]

A Certificate III should be the mandatory minimum qualification required for personal care workers performing paid work in aged care.

An interesting one. The Government says it is subject to consideration through the development of the whole‐of‐government Care Workforce Strategy. The reality is the sector is already struggling for workers and mandating this requirement now would make the challenge to meet new mandated staff time standards even harder to meet.

Recommendation 84: Increases in award wages [???]

Employee organisations entitled to represent the industrial interests of aged care employees covered by the Aged Care Award 2010, the Social, Community, Home Care and Disability Services Industry Award 2010 and the Nurses Award 2010 should collaborate with the Australian Government and employers and apply to vary wage rates in those awards to: a. reflect the work value of aged care employees in accordance with section 158 of the Fair Work Act 2009 (Cth), and/or b. seek to ensure equal remuneration for men and women workers for work of equal or comparable value in accordance with section 302 of the Fair Work Act 2009 (Cth).

Another intriguing response. The Government has not accepted this recommendation or said it is subject to further considering, noting the issue is currently being considered by the Fair Work Commission (FWC).

“The Health Services Union has made claims to the FWC for increased wages for aged care workers covered by the Aged Care Award 2010,” they state. “Decisions made by the FWC are independent of Government. The Government will provide information and data to the FWC as required.”

Watch this space then.

Recommendation 87: Employment status and related labour standards as enforceable standards [Under consideration]

By 1 January 2022, the Australian Government should require as an ongoing condition of holding an approval to provide aged care services that a. approved providers: have policies and procedures that preference the direct employment of workers engaged to provide personal care and nursing services on their behalf b. where personal care or nursing work is contracted to another entity, that entity has policies and procedures that preference direct employment of workers for work performed under that contract. 2. From 1 January 2022, quality reviews conducted by the Quality Regulator must include assessing compliance with those policies and procedures and record the extent of use of independent contractors

A recommendation that seems unlikely to be taken up now given the casualised nature of the current aged care workforce.

The Government says this recommendation will be referred to the Productivity Commission for examination so another one that will come up again.

Recommendation 101: Civil penalty for certain contraventions of the general duty [Under consideration]

  1. The new Act should provide that, on application by the Quality Regulator to a court of competent jurisdiction, a breach by an approved provider of the general duty to provide high quality safe aged care is a contravention of the Act attracting a civil penalty if: a. the act, omission or conduct giving rise to the breach also gives rise to a failure to comply with one or more of the Aged Care Quality Standards, and b. the breach gives rise to harm, or a reasonably foreseeable risk of harm, to a person to whom the provider is providing care or engaged under a contract or understanding to provide care.
  2. The new Act should also provide that such a contravention attracts accessorial liability for key personnel who: a. aids, abets, counsels or procures the approved provider to commit the contravention, or b. is in any other way, directly or indirectly, knowingly concerned in, or party to, the contravention by the approved provider.

The Department of Health and their regulator in their submission on the Counsel Assisting’s recommendations had supported this measure – but rejected the idea of personal compensation (see the next recommendation) but the Government is clearly a little more wary. They add this recommendation will be considered as part of the development of the new Aged Care Act.

Recommendation 102: Compensation for breach of certain civil penalty provisions [Under consideration]

The new Act should provide: a. that an order may be made on the application of the Quality Regulator to a court of competent jurisdiction that an approved provider that has contravened a civil penalty provision, or a person involved in the contravention, pay damages for any loss and damage suffered by a person receiving aged care services as a direct result of the contravention, and b. for a private right of action for damages in a court of competent jurisdiction by, or on behalf of, a person receiving aged care services who has suffered loss and damage as a direct result of a contravention of a civil penalty provision, in which proceeding any findings or admissions of the contravention in another proceeding may be adduced in evidence as proof that the contravention occurred.

Unsurprisingly, this is also under consideration as part of the development of the new Aged Care Act.

Recommendation 125: Abolition of contributions for certain services [Under consideration]

  1. Individuals who are assessed as needing social supports, assistive technologies and home modifications, or care at home should not be required to contribute to the costs of that support. 2. Individuals who are assessed as needing residential care should not be required to contribute to the costs of the care component of that support.

The Government is clearly reluctant to ‘shake down Granny’ and increase consumer contributions for care. This recommendation is subject to further consideration.

Recommendation 126: Fees for respite care [Under consideration]

  1. Individuals receiving respite care under the new Act should only be required to contribute to the costs of the services that they receive associated with ordinary costs of living (as defined in Recommendation 127, below) up to a maximum of 85% of the single basic age pension, and any additional services they choose to receive. They should not be required to contribute to the costs of the accommodation and care services that they receive. 2. The level of the maximum amount that respite providers may recover for the ordinary costs of living should be determined by the Pricing Authority. 3. The new Act should also contain provisions that ensure that individuals who are unable to pay the co‐payments toward the ordinary costs of living are not denied access to the high-quality respite care that they have been assessed as needing. 4. The Australian Government should pay each approved provider of respite to a person an amount representing the difference between the contribution the person makes to their ordinary costs of living in accordance with paragraph 126.1 and the amount that the respite provider may recover (which may not exceed the amount calculated by the Pricing Authority in accordance with paragraph 126.2).

In the same vein as above, this recommendation is still to be considered further.

Recommendation 127: Fees for residential aged care—ordinary costs of living [Not accepted]

  1. Individuals receiving residential aged care under the new Act should be required, subject to the other parts of this recommendation, to contribute to the costs of the goods and services that they receive to meet their ordinary living needs currently specified in Part 1 of Schedule 1 of the Quality of Care Principles 2014 (Cth) (the ordinary costs of living).

The Government has flat out rejected the idea of aged care residents paying more for their daily living needs, noting the “discordant views” of the Commissioners in dismissing this recommendation.

Recommendations 128 and 140: Fees for residential aged care accommodation [Not accepted]

Similarly, the Government does not support aged care residents footing the bill for their accommodation, turning down different recommendations from both Commissioners.

Recommendation 129 and 141: Changes to the means test [Not accepted]

Fairer means testing is also still on the nose for the Government – again, both Commissioners’ proposals were rejected.

Recommendation 142: Phasing out of Refundable Accommodation Deposits [Under consideration]

The Australian Government should: a. from 1 July 2025, begin to phase out Refundable Accommodation Deposits for new residents b. assist providers with the transition away from Refundable Accommodation Deposits as a source of capital by establishing an aged care accommodation capital facility, with the terms and conditions of assistance designed to create incentives for providers to develop small household models of accommodation.

Some good news for the operators that lodged submissions against the abolition of RADs.

The Government has promised to work with the aged care sector and relevant stakeholders to develop a reformed Residential Aged Care Accommodation framework which will review the role of RADs and consider options that could reduce the current dependence on RADs as a capital funder.

Recommendation 144: Introduce a new earmarked aged care improvement levy [Not accepted]

  1. By 1 July 2022, the Australian Government should introduce legislation to Parliament to establish an aged care improvement levy of a flat rate of 1% of taxable personal income. The levy imposed should be levied, and paid, for the financial year commencing on 1 July 2023 and for all subsequent financial years until the Parliament otherwise provides. 2. The legislation introducing the levy should be based on the Medicare Levy Act 1986 (Cth).

The big one – but a recommendation that was always going to be a bridge too far for a tax-wary Government dealing with the costs of a rapidly expanding NDIS.