Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Aged Care, Disabilities and Carers) Share this | Hansard source

The first two bills that we are debating here this evening, the Aged Care (Bond Security) Bill 2005 and the Aged Care (Bond Security) Levy Bill 2005 are designed to protect accommodation bonds held by residential aged care providers in case of a provider becoming insolvent. The third bill in this suite, the Aged Care Amendment (2005 Measures No. 1) Bill 2005, is designed to ensure that residents of flexible care services are afforded the same protections as residents in residential aged care services. It puts in place a set of prudential standards and is designed to ensure that interest is repaid to the estate of a resident for a period between the death of a resident and the repayment of the bond. It is also designed to change the time frame of repayment of a bond to the estate of a deceased resident. Finally, it is designed to reduce the time frame in which a bond must be refunded in the event of a resident leaving a facility or if a resident dies.

The essential purpose that these three bills provide is to strengthen the prudential requirements and enhance the protections available to residents in aged care who have paid accommodation bonds. These bonds are paid, as many of us know, upon entry by non-concessional residents of low-care residential aged care facilities, by residents in high-care facilities which have extra service status and by some residents in multipurpose services. When residents leave an aged care facility, they, their family or the estate may be eligible for a refund of part of the accommodation bond that has been paid. Under current arrangements, if a residential care facility provider became bankrupt or insolvent, the resident is not guaranteed that they will get their relevant accommodation bond amount refunded. These bills are designed to ensure that residents will in all cases be refunded the amount of accommodation bond that they are owed.

The introduction of these arrangements was recommended by Professor Hogan in his 2004 review of pricing arrangements in residential aged care. There is general industry acceptance of the proposals as an appropriate way to protect residents’ funds. Professor Warren Hogan recommended that measures be introduced to protect the increasing pool of accommodation bonds that exist. Currently, approximately $4.3 billion is held by residential aged care providers as bonds, with an average bond being $127,600. Unfortunately—and I am very glad the minister is here, because he might be able to answer this in his contribution to the debate—we are still waiting for the government’s long-term response to the Hogan review. The summary report of the review of pricing arrangements in residential aged care was received by the government in March 2004. It has now taken this government longer to respond to the report than it took Professor Hogan to undertake the research and write the report for his original work.