A Bill for an Act to guarantee the refund of certain bond
balances, and for related purposes
The Parliament of Australia enacts:
Part 1—Preliminary
1
Short title
This Act may be cited as the Aged
Care (Bond Security) Act 2005.
2
Commencement
(1) Each provision of this Act specified in column
1 of the table commences, or is taken to have commenced, in accordance with
column 2 of the table. Any other statement in column 2 has effect according to
its terms.
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Commencement
information
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Column 1
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Column 2
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Column 3
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Provision(s)
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Commencement
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Date/Details
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1. Sections 1 and 2 and anything in this Act not
elsewhere covered by this table
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The day on which this Act receives the Royal Assent.
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2. Sections 3 to 22
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At the same time as Schedule 5 to the Aged Care
Amendment (2005 Measures No. 1) Act 2005 commences.
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Note: This table
relates only to the provisions of this Act as originally passed by the
Parliament and assented to. It will not be expanded to deal with provisions
inserted in this Act after assent.
(2) Column 3 of the table contains additional
information that is not part of this Act. Information in this column may be
added to or edited in any published version of this Act.
3
Simplified outline
The following is a simplified outline of
this Act and some related material:
In certain circumstances, the
Commonwealth will pay to a person an amount that the Secretary considers is
equal to a bond balance, and interest, owed to the person by an approved
provider (see sections 10, 12, 13 and 16).
Any rights that a person who is paid
such an amount had to recover the amount from an approved provider are
transferred to the Commonwealth (see section 15).
The Commonwealth may recoup certain
costs it incurs from other approved providers (see sections 18 and 19 and
the Aged Care (Bond Security) Levy Act 2005).
4
Application of this Act
(1) This Act applies in all the States and
Territories.
(2) However, this Act does not apply in any
external Territory.
5
Binding the Crown
(1) This Act binds the Crown in each of its
capacities.
(2) This Act does not make the Crown liable
to be prosecuted for an offence.
6
Definitions
(1) In this Act:
accommodation bond has the meaning given by
the Dictionary in Schedule 1 to the Aged Care Act 1997.
administrative costs, in relation to a
default event declaration, means costs incurred by the Commonwealth in relation
to, and as the result of, the making of the default event declaration and includes,
but is not limited to, costs incurred by the Commonwealth as a result of:
(a) making any insolvency event
declaration under section 7 that enabled the making of the default event
declaration; and
(b) giving notice of such an
insolvency event declaration under section 8; and
(c) giving notice of the default event
declaration under section 11; and
(d) determining matters under
section 12 that were required to be determined as a result of the making
of the default event declaration; and
(e) making any refund declarations
under section 13 that were required to be made as a result of the making
of the default event declaration; and
(f) giving notice of those refund
declarations under section 14; and
(g) attempting to recover amounts that
the Commonwealth gained the right to recover under section 15 as a result
of the making of those refund declarations; and
(h) making refund costs recoupment
determinations under section 18 relating to those refund declarations; and
(i) recovering levy that the
Commonwealth was enabled, as a result of the making of those refund costs
recoupment determinations, to impose by regulations made under section 6
of the Aged Care (Bond Security) Levy Act 2005.
administrative costs recoupment determination
means a determination made under section 19.
approved provider has the meaning given by
the Dictionary in Schedule 1 to the Aged Care Act 1997.
bond means:
(a) an accommodation bond; or
(b) an entry contribution.
bond balance:
(a) in relation to a bond that is an
accommodation bond—means an accommodation bond balance as defined in the
Dictionary in Schedule 1 to the Aged Care Act 1997; or
(b) in relation to a bond that is an
entry contribution—means an entry contribution balance as defined in the
Dictionary in Schedule 1 to the Aged Care Act 1997.
corporation means a trading or financial
corporation within the meaning of paragraph 51(xx) of the Constitution.
default event declaration means a declaration
made under section 10.
entry contribution has the meaning given by
the Dictionary in Schedule 1 to the Aged Care Act 1997.
Finance Minister means the Minister who
administers the Financial Management and Accountability Act 1997.
formal agreement has the meaning given by the
Dictionary in Schedule 1 to the Aged Care Act 1997.
insolvency event: each of the following
events is an insolvency event that may occur in relation to an
approved provider:
(a) a CGT event G3 (within the meaning
of the Income Tax Assessment Act 1997) in respect of shares or financial
instruments of the approved provider;
(b) the making of an order:
(i) under
section 459A or 459B of the Corporations Act 2001; or
(ii) under a provision of
the law of a State, or Territory, which deals with the incorporation of
associations;
that the approved provider be
wound up in insolvency;
(c) the passing of a special
resolution:
(i) under section 491
of the Corporations Act 2001; or
(ii) under a provision of
the law of a State, or Territory, which deals with the incorporation of
associations;
that the approved provider be
wound up voluntarily;
(d) the passing of a resolution under
paragraph 439C(c) of the Corporations Act 2001 by the creditors of the
approved provider that the approved provider be wound up;
(e) the making of a sequestration
order against the estate of the approved provider;
(f) the acceptance of a debtor’s
petition (within the meaning of the Bankruptcy Act 1966) against the
approved provider by an Official Receiver (within the meaning of that Act);
(g) the making of an insolvency event
declaration in relation to the approved provider (see section 7).
insolvency event declaration means a
declaration made under section 7.
national newspaper means a newspaper
circulating generally throughout Australia.
operator has the meaning given by the
Dictionary in Schedule 1 to the Aged Care Act 1997.
outstanding bond balance has the meaning
given by subsection (2).
refund amount, in relation to a refund
declaration, means the amount that the refund declaration declares is to be
paid by the Commonwealth.
refund costs recoupment determination means a
determination made under section 18.
refund declaration means a declaration made under
section 13.
refund recipient, in relation to a refund
declaration, means the person that the refund declaration declares is to be
paid an amount by the Commonwealth.
Secretary means the Secretary of the
Department.
Outstanding bond balance
(2) For the purposes of this Act, a bond
balance is an outstanding bond balance of an approved provider at
a particular time if:
(a) at that time all, or part, of the
bond balance has not been refunded; and
(b) that time is later than the time
required for the bond balance to be refunded by the approved provider under:
(i) Subdivision 57‑G
of the Aged Care Act 1997; or
(ii) the User Rights
Principles made under section 96‑1 of the Aged Care Act 1997;
or
(iii) a formal agreement
applying in respect of the bond balance.
Part 2—Insolvency event declaration
7
Making of insolvency event declaration
(1) The Minister may make an insolvency event
declaration in relation to an approved provider if:
(a) either:
(i) the approved provider
is an externally‑administered body corporate (within the meaning of the Corporations
Act 2001); or
(ii) a personal insolvency
agreement under Part X of the Bankruptcy Act 1966 is in effect in
relation to the approved provider or the approved provider’s property; and
(b) there is at least one outstanding
bond balance of the approved provider.
Note: An approved provider that is a body that is
incorporated under a law of a State or Territory may be an externally‑administered
body corporate within the meaning of the Corporations Act 2001.
(2) The insolvency event declaration must be
in writing.
(3) An insolvency event declaration is not a
legislative instrument.
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Notice of insolvency event declaration
(1) The Secretary must give a copy of an
insolvency event declaration to the approved provider to which the insolvency
event declaration relates.
(2) A failure to comply with
subsection (1) does not affect the validity of any insolvency event
declaration.
Part 3—Requirement to notify Secretary of certain insolvency events
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Notice of certain insolvency events
(1) An approved provider must notify the
Secretary the first time that any of the events mentioned in
paragraph (a), (b), (c), (d), (e) or (f) of the definition of insolvency
event occur in relation to the approved provider. The notification must
be given in writing by the end of the first business day after the day on which
the event occurs.
(2) An approved provider commits an offence
if the approved provider refuses or fails to comply with a requirement under
subsection (1).
Penalty: 30 penalty units.
Part 4—Default event declaration
10
Making of default event declaration
(1) As soon as practicable after the
Secretary first becomes aware that:
(a) an insolvency event has occurred
in relation to an approved provider; and
(b) there is at least one outstanding
bond balance of the approved provider;
the Secretary must make a default event declaration.
(2) The default event declaration must:
(a) be in writing; and
(b) state that an insolvency event has
occurred in relation to the approved provider; and
(c) state that the Secretary considers
that there is at least one outstanding bond balance of the approved provider.
(3) A default event declaration is not a
legislative instrument.
11
Notice of default event declaration
(1) The Secretary must give a copy of a
default event declaration to:
(a) the approved provider in relation
to which the declaration states an insolvency event has occurred; and
(b) each person whom the Secretary
considers may be entitled to receive a refund of an outstanding bond balance of
the approved provider.
(2) The Secretary must publish a copy of a
default event declaration in a national newspaper.
(3) A failure to comply with
subsection (1) or (2) does not affect the validity of any default event
declaration.
Part 5—Refund declaration
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Secretary to determine certain matters
(1) If the Secretary has made a default event
declaration stating that an insolvency event has occurred in relation to an approved
provider, the Secretary must identify each bond balance that:
(a) was an outstanding bond balance of
the approved provider at the time that the default event declaration was made;
or
(b) later becomes an outstanding bond
balance of the approved provider.
(2) In respect of each bond balance
identified by the Secretary under subsection (1), the Secretary must
determine:
(a) the date on which the bond balance
became an outstanding bond balance; and
(b) the amount that the Secretary
considers is equal to the amount of the bond balance that had not been refunded
at the time that bond balance became an outstanding bond balance; and
(c) the amount that the Secretary
considers is equal to the amount representing interest on the amount determined
under paragraph (b), worked out in accordance with the User Rights
Principles made under section 96‑1 of the Aged Care Act 1997,
that has accrued at the time that the Secretary determines the amount under
paragraph (b); and
(d) the person to whom the Secretary considers
the approved provider was required to refund the bond balance at the time that
it became an outstanding bond balance; and
(e) the method that the Secretary
considers would be most appropriate for the Commonwealth to use to pay a refund
amount to the person mentioned in paragraph (d).
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Making of refund declaration
(1) As soon as practicable after the
Secretary has determined the matters mentioned in subsection 12(2) in respect
of an outstanding bond balance of an approved provider, the Secretary must make
a refund declaration relating to the outstanding bond balance.
(2) The refund declaration must:
(a) be in writing; and
(b) specify the approved provider that
has not refunded all, or part, of the relevant outstanding bond balance; and
(c) declare that the Commonwealth is
to pay an amount equal to the sum of:
(i) the amount determined
under paragraph 12(2)(b); and
(ii) the amount determined
under paragraph 12(2)(c);
to the person determined under
paragraph 12(2)(d).
(3) A refund declaration is not a legislative
instrument.
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Notice of refund declaration
(1) The Secretary must give a copy of a
refund declaration to:
(a) the refund recipient; and
(b) the approved provider specified in
the refund declaration.
(2) A failure to comply with
subsection (1) does not affect the validity of any refund declaration.
Part 6—Transfer of rights and payments of refund amounts
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Transfer of recovery rights to Commonwealth
Immediately after the Secretary makes a
refund declaration, any rights that the refund recipient had when the refund
declaration was made to recover an amount equal to the refund amount from the
approved provider specified in the refund declaration are, by force of this
section, transferred to the Commonwealth.
Note: Any rights that the refund recipient has to
receive from the approved provider any additional amounts are not transferred
to the Commonwealth by force of this section.
16
Payments by Commonwealth
Within 14 days after the Secretary makes
a refund declaration, the Commonwealth must pay the refund amount to the refund
recipient.
17
Appropriation
The amounts payable under
section 16 are to be paid out of the Consolidated Revenue Fund, which is
appropriated accordingly.
Part 7—Costs recoupment determinations
18
Making of refund costs recoupment determination
(1) The Minister may, at a particular time,
make a refund costs recoupment determination relating to one or more refund
declarations if:
(a) before that time, the Minister has
informed the Treasurer and the Finance Minister that the Minister intends to
make a refund costs recoupment determination relating to those refund
declarations; and
(b) at that time, the Commonwealth has
not recovered all of each refund amount in relation to those refund
declarations; and
(c) at that time, the Commonwealth has
not previously made a refund costs recoupment determination relating to each of
those refund declarations.
(2) A refund costs recoupment determination
must:
(a) be in writing; and
(b) specify the refund declarations to
which the determination relates; and
(c) specify the costs recoupment
amount (see subsection (3)); and
(d) specify the default event
declaration to which the determination relates (see subsection (4)).
(3) The costs recoupment amount specified in
a refund costs recoupment determination is the amount equal to the sum of each
refund amount that:
(a) is specified in a refund
declaration specified in the determination; and
(b) has not been recovered by the
Commonwealth at the time the determination is made.
(4) A default event declaration is a default
event declaration to which a refund costs recoupment determination relates if
the making of the default event declaration was a precondition of the making of
the refund declarations specified in the refund costs recoupment determination.
(5) A refund costs recoupment determination
is not a legislative instrument.
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Making of administrative costs recoupment determination
(1) The Minister may, at a particular time,
make an administrative costs recoupment determination relating to a default
event declaration if:
(a) before that time, the Minister has
informed the Treasurer and the Finance Minister that the Minister intends to
make an administrative costs recoupment determination relating to that default
event declaration; and
(b) at that time, the Minister
considers, on reasonable grounds, that the Commonwealth has not recouped all of
the administrative costs relating to the default event determination.
(2) An administrative costs recoupment
determination must:
(a) be in writing; and
(b) specify the default event
declaration to which it relates; and
(c) specify the costs recoupment
amount (see subsection (3)).
(3) The costs recoupment amount specified in
an administrative costs recoupment determination must not exceed the sum of:
(a) the amount that the Minister
considers, on reasonable grounds, is equal to the amount of the administrative
costs relating to the default event declaration specified in the determination
that the Commonwealth has not recouped at the time that the determination is
made; and
(b) the amount that the Minister
considers, on reasonable grounds, is likely to cover the costs of recovering
levy that the Commonwealth will be enabled to impose by regulations made under
section 6 of the Aged Care (Bond Security) Levy Act 2005 as a
result of the making of the determination.
(4) An administrative costs recoupment
determination is not a legislative instrument.
Part 8—Miscellaneous
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Delegations by Minister
(1) The Minister may, in writing, delegate to
the Secretary all or any of the Minister’s powers or functions under this Act.
(2) In exercising powers or functions delegated
under subsection (1), the Secretary must comply with any directions of the
Minister.
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Delegations by Secretary
(1) The Secretary may, in writing, delegate
to an SES employee, or acting SES employee, in the Department all or any of the
Secretary’s powers or functions under this Act.
(2) In exercising powers or functions
delegated under subsection (1), the delegate must comply with any
directions of the Secretary.
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Regulations
(1) The Governor‑General may make
regulations prescribing matters:
(a) required or permitted by this Act
to be prescribed; or
(b) necessary or convenient to be
prescribed for carrying out or giving effect to this Act; or
(c) necessary or convenient to be
prescribed for enabling or facilitating the collection of levy imposed by
regulations under section 6 of the Aged Care (Bond Security) Levy Act
2005.
(2) Without limiting paragraph (1)(c),
regulations prescribing matters necessary or convenient to be prescribed for
enabling or facilitating the collection of levy may provide for the following:
(a) the person who is liable to pay
levy;
(b) the time levy is due and payable;
(c) liability for levy being a debt
due to the Commonwealth;
(d) the methods by which levy may be
paid (including by instalments);
(e) the payment of penalties in
respect of late payment of levy;
(f) repayments of levy;
(g) repayments of overpayments of
levy;
(h) penalties for offences against the
regulations, not exceeding a fine of 50 penalty units.