29 November 2019

A new sanctions regime based on demerit points and fines

Penalties imposed under the Aged Care Act are typically relatively mild. They include short term bans on subsidies for new residents and the hiring of advisers at provider’s expense to show managers how to do their job properly. Sanctions need to be something that owners and managers fear not a slap on the wrist and advice on how to improve.

Further, the Royal Commission has observed that the goal of regulators appears to be to manage providers back to compliance at virtually all costs.

In July, residents of Earle Haven on the Gold Coast were evacuated in a fleet of ambulances when a sub-contracted service provider downed tools without notice. This became a Royal Commission case study which revealed disturbing aspects of regulation. It emerged that complaints handling, prudential compliance, accreditation monitoring and reportable assaults operated in virtual silos. The warning signs were there but no-one involved with compliance had a complete picture of the unfolding disaster.

In its August 2019 submission, Elder Care Watch advocated a generic scale of penalties to be used by all areas of non-compliance based on a demerit points system. Each offence (instance of non-compliance) would attract a specified number of demerit points dependent on its severity. A fine would also be imposed, again linked to severity of the offence. When demerit points reached a specified limit in a specified time period, the ultimate sanction of a loss of licence to operate would be imposed.

The compliance history of each service would be available to all regulators and the sanctions regime would deliver a measure of proscription in their decision-making, determined by the demerit point scale and the fine scale.