Kay Hull (Riverina, National Party) Share this | Hansard source

It is with great pleasure that I rise today to support the Aged Care (Bond Security) Bill 2005, the Aged Care (Bond Security) Levy Bill 2005 and the Aged Care Amendment (2005 Measures No. 1) Bill 2005 in the House. I am very pleased to see that the former Minister for Ageing is sitting in the chamber. It is very fitting; these were her pieces of legislation—and what a fantastic Minister for Ageing she was. We think that she has done more for the benefit of our residents in aged care facilities and their families than any other minister has done in a long time. I congratulate her for all that she has done, and these are true and genuine congratulations to the former minister for having undertaken her role as a minister for aged care in such a professional and profoundly competent way.

These bills aim to continue the government’s goals to ensure that the protection of aged care residents is paramount when it comes to accommodation bonds. Already this government has made provision for people with dementia and improved training for aged care workers, and the number of aged care places continues to increase throughout my electorate of Riverina and across the nation as a whole. We have put in place a whole host of measures and accreditation to ensure that, when our loved ones have to enter into an aged care facility, the treatment and the service they get is of a high standard. Aged care workers are a dedicated group of people who are entirely committed to the residents of aged care homes. This government has sought to put them in a position whereby their quality assurance and protection along with the protection of the residents is highly valued. I congratulate all of those workers in the industry who are absolutely committed and dedicated to the care of our ageing and elderly Australians who have given much to this nation over their lives.

The Aged Care (Bond Security) Bill 2005 will guarantee the repayment of aged care residents’ bond balances in the event an approved provider is unable to repay residents’ bonds. Under the Aged Care Act 1997, an accommodation bond is an initial payment that an approved provider may charge a resident of aged care services for entry to low-level residential aged care or to high-level residential aged care in an extra service facility. Some aged care residents in multipurpose services may also be charged accommodation bonds. The balance of a bond that is paid to a provider when a resident enters a facility, minus certain deductions and any investment returns retained by the provider, is refunded to the resident on their exit from the facility. They may decide to exit for many different reasons.

With about 74 per cent of aged care services requiring a levy bond to be paid, the effect of the security that comes with the introduction of this bill will assist many older people and in particular their families. Often it is difficult enough for an aged person to adapt to the prospect of having to live in a residence and to be cared for, often far away from family members and friends. Then, perhaps, they may also face losing a huge proportion of their life savings, which they have used for accommodation bonds, by not being repaid when they need the money to move into other levels of care. It certainly will be hugely reassuring to have a guarantee of this kind that their bonds will be repaid due to this legislation currently before the House.

If an aged care facility in a small community closes, it is very difficult not only for family members, who face the task of finding new accommodation for their aged parent, relative or loved one, but also for aged residents, particularly when they are quite ill or frail, who are sometimes sent elsewhere. Not being able to immediately obtain much needed finances to secure other accommodation is a problem that has a great impact on aged people and their families. The majority of aged care providers are absolutely committed to their residents—so much so that they may keep their doors open long after they perhaps should have taken a decision to close in the interests of financial viability. They may continually use up all of their assets and risk their financial viability trying to come up with a way in which to continue to provide their residents with services and a facility. This is why aged care bonds become a casualty and it is how they sometimes get caught up in these issues. Of course there are some unscrupulous operators, but in the main providers of aged care services are absolutely committed, along with their staff. Many aged people require care because they have fallen ill or have had an accident or because their families have had to move away for job reasons and they are not able to be relocated. But to then be told that money that is rightfully theirs has gone because a provider has become insolvent would be absolutely devastating news. That certainly will not occur once this bill becomes law.

Many families find it difficult enough coping with their own daily pressures, let alone trying to recoup lost accommodation bonds and finding more money for a bond at another aged care facility. With an increasing average value of bonds of $127,600 in 2004-05, up from an average value of $26,000 in 1996-97, this bill is welcomed as a valuable protection when bonds need to be recovered after a resident, for any reason, leaves an aged care facility. Currently, if a provider becomes bankrupt or insolvent, the resident is not guaranteed the return of the balance, because they are considered an unsecured creditor under the corporations and bankruptcy law.

If an aged care facility in the Riverina were to become insolvent, a resident would find it very difficult to find alternative accommodation within the region. I think this measure is long overdue. We have a long waiting list for hostel places in my region and it is a difficulty that we have been overcoming. With the help of the former minister and the government, we have been able to overcome many of those issues. I might add that when I first became the member for Riverina the major issue confronting me at almost every constituent interview was the lack of places in hostel care and aged care. Thankfully, due to the efforts of the government in overcoming the bed shortage that was inherited from the previous government, I now find that this is no longer one of the most pressing issues in my region. I certainly thank the minister and the government for the number of beds that have been allocated to our region to assist with our ageing population.

The distance between aged care facilities is greater in rural areas and this places added stress on families already struggling to deal with the daily running of their households and then perhaps also being forced to find alternative accommodation for family members. The introduction of this bill by the government is welcomed because, with 100 per cent of bond moneys owing having to be repaid in full, the loss of a bond is a potential burden that families and residents no longer have to face. There is a feeling of security. People will take the risk of perhaps going into smaller facilities and they will not be concerned that if something happens they might lose their bond. They do not have that risk. They have the security of knowing that they will have their bond refunded in full, aside from some agreed administrative costs, and that is part of all aged care provision.

The aged population of Australia is increasing. It is anticipated that by 2040 those aged over 65 will represent 25 per cent of the total population and there will be one million people over the age of 85. These bills will ensure security on accommodation bonds not only today but in future years, as the need is only going to become greater.

The Aged Care (Bond Security) Levy Bill is part of the government’s guarantee scheme in which the Australian government will pay 100 per cent of the bond balance to residents with interest in the event of a provider becoming insolvent or bankrupt and being unable to meet its financial obligations. This bill will mean the government is able to recover the total amount to be repaid to residents plus the administrative costs associated with the refund and the attempt to recover from the insolvent provider.

In 2004 there were 2,493 services and 1,309 providers in Australia, which included private incorporated bodies, community based organisations, religious organisations, state and territory government organisations, charitable organisations and local government bodies. About 57 per cent of the more than 1,300 providers received bond money, indicating the wide use of accommodation bonds.

The Aged Care Amendment (2005 Measures No. 1) Bill is designed to ensure greater responsibility is taken by individual providers to appropriately manage and secure residents’ accommodation bonds, provide certain information to residents and prospective residents about the financial viability of the provider and better inform residents, prospective residents and their representatives. So we will give effect to the establishment of new prudential regulatory arrangements to improve the management of residents’ accommodation bonds and entry contributions. These new regulations will apply to all services holding bonds, whether they are residential care services or flexible care services.

A significant change included in this bill will be to the arrangements following the death of a resident. The current 60-day provision is problematic for providers if the legal beneficiary has not been firmly established. Under the new provisions, a provider must refund the accommodation bond balance within 14 days of being shown probate or letters of administration. This will be widely welcomed by families who have the unpleasant and unenviable task of trying to settle and determine estates as trustees and executors.

In early 2005, the government announced that lump sum accommodation bonds paid by residents in aged care facilities would be exempt from the social security and veterans’ affairs assets test. From 1 July last year, an aged care resident who pays an accommodation bond wholly or partly by periodic payment is able to rent out their former home without the value of the home or the rental income affecting their pension. These exemptions apply to bonds paid by existing and new residents in aged care, regardless of when the bond was paid. For some existing residents in aged care, these changes may result in an increase in their rate of pension or their becoming eligible to receive a pension.

This legislation aims to continue this government’s goals and commitments to ensure the protection of aged care residents when it comes to accommodation bonds. It is a welcome change to the current regulations. I commend the legislation to the House. It will provide a very fine form of security for aged care residents, those who are considering entering into a facility, and their families when they are asked to pay a bond. The legislation provides greater security and greater peace of mind for all the people in that position.

See this speech in context