House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Families, Community Services and Indigenous Affairs, Minister for Disability Reform, the Hon Jenny Macklin MP)

Schedule 1 - Amendment of the National Disability Insurance Scheme Act 2013

Summary

This Schedule makes minor amendments to the NDIS Act to clarify the policy intention in relevant provisions, and to address minor anomalies and technical errors.

Background

The Bill makes amendments to clarify the range of matters relating to the National Disability Insurance Scheme that can be prescribed by rules made under the Act, to ensure they are based soundly in the principal legislation for the scheme.

In the case of the early intervention supports, where there is no intention to make rules and where key eligibility criteria are set out clearly in the legislation, the current rule-making power is being removed to avoid any risk that those provisions would not be available to people who may benefit from them.

Further amendments strengthen the governance and financial framework of the Agency (DisabilityCare Australia) to support the Agency's accountable management of the significant public monies involved and to further strengthen the financial sustainability of the scheme.

The Bill also clarifies the intended operation of provisions relating to compensation claims. It ensures that protections similar to those applying under section 104 of the NDIS Act when a participant is required to claim or obtain compensation also explicitly apply when the CEO takes over the claim on behalf of the participant under section 105.

Most amendments made by this Schedule commence on the day after Royal Assent. Some amendments commence immediately after relevant provisions of the NDIS Act.

Explanation of the changes

Part 1 - Amendments relating to the National Disability Insurance Scheme Rules

Item 1 repeals paragraph 22(1)(b) and substitutes a more general rule-making power that allows for the NDIS Rules to prescribe any other requirements in relation to age. These could include a requirement that a person is of a specified age at a particular time, such as the date on which an access request was made. This is consistent with the rule-making power relating to the residence requirements.

Item 3 inserts a new paragraph 23(3)(d) to make it clear that the NDIS Rules may include a prescribed requirement relating to the purpose for which the person resides in a particular place - for example, where a person may start to reside in an area for the dominant purpose of accessing supports not provided under the Act. The new paragraph also allows for exceptional circumstances to be prescribed as a residence requirement..

Item 2 recasts the rule-making power in subsection 23(1) of the NDIS Act as a consequence of the additional scope for the rules provided by new paragraph 23(3)(d).

The amendments made by items 1 to 3 clarify the scope of the Minister's powers under the NDIS Act to make rules of the kind negotiated and agreed with the States and Territories.

Subsection 27(2) of the NDIS Act enables the rules to prescribe for, and in relation to, the persons who can conduct assessments relevant in determining whether a person meets the disability or early intervention requirements and the kinds of assessments that may be conducted. Because there is no intention to make rules under this provision, and because the key eligibility criteria are already set out clearly in the legislation, the current rule-making power is being removed to avoid any risk that these provisions would not be available to people who may benefit from them. Accordingly, item 5 repeals subsection 27(2). A technical change is made by item 4 as a consequence of this repeal.

Items 6, 10, 11, 12, 13, 15, 16, 19, 21, 22, 25 and 26 clarify the scope of rule-making powers in the NDIS Act by making amendments to paragraph 33(5)(d), section 34, subsection 35(1), paragraph 35(1)(a), subsections 35(2), (4) and (5), paragraph 40(2)(b), subsections 44(3), 74(6), and 75(4), and paragraphs 88(6)(b) and 93(b). As a consequence of the amendments in items 6 and 13, paragraphs 34(g) and (h) and subsection 35(3) have been repealed ( items 9 and 14 ).

These amendments are to avoid any doubt that the Minister has the power under the NDIS Act to make NDIS Rules of the kind negotiated and agreed with the States and Territories.

The amendments either omit, or clarify the meaning of, 'criteria' in relation to these provisions. This is to clarify that the NDIS Rules may prescribe criteria of a kind that permit or require the CEO to take into account one or more matters in deciding whether the criteria are met.

Item 19 also clarifies that the NDIS Rules may prescribe criteria and matters which the CEO is to have regard to when determining whether the management of a participant's plan by the participant or a plan nominee would present an unreasonable risk to the participant. This amendment clarifies the scope of the power to make NDIS Rules in relation to unreasonable risk set out in the NDIS (Plan Management) Rules.

Item 7 is consequential to item 10, and inserts '(1)' before 'For' in section 34.

Item 17 inserts new subsection 44(1A). The new subsection provides that plan nominees who are insolvents under administration are not to manage the funding for supports under a participant's plan. A person will still be able to be a plan nominee even if they are an insolvent under administration, but will not be able to manage funding (if any) provided under the plan. Where this situation arises, the Agency (DisabilityCare Australia) or a registered plan management provider will manage the plan.

Item 18 inserts a new subsection 44(2A). The new subsection provides that, if the CEO is satisfied that the management of a participant's plan or part of a participant's plan by a plan nominee presents an unreasonable risk to the participant, the statement of participant supports must not provide that the plan nominee is to manage the participant's plan to the extent necessary. This amendment clarifies that, if the management of the participant's plan by a plan nominee would present an unreasonable risk to the participant, then the CEO may restrict the plan nominee from managing the funding associated with a participant's plan.

Item 20 inserts new paragraph 70(1)(e), which provides that, for a person or entity (the applicant) to be approved as a registered provider of supports, the CEO must be satisfied that the applicant is suitable to manage the funding for supports under plans or provide supports under plans, as the case requires. The amendment is to avoid any doubt that the NDIS Rules can include a requirement for the CEO to consider the suitability of a provider to manage the funding for supports under plans or provide supports under plans, as the case requires.

Item 23 repeals the heading to section 80 to reflect the amendment to subsection 80(4) made by item 24. The duties referred to in the subsection will include an expanded power to make rules to prescribe other duties of a nominee.

Item 24 makes an amendment to subsection 80(4). Subsection 80(4) provides that the NDIS Rules may prescribe certain duties on a nominee. The amendment adds to the duties of the nominee that may be prescribed, to include a duty to inform the CEO and the participant if the nominee has, acquires, or is likely to acquire, any interest, pecuniary or otherwise, that conflicts or could conflict with the performance of the nominee's duties. The effect of this amendment is to allow rules to be made to address a conflict of interests in the duties of the nominee. Where such a duty is prescribed, the duty will not only be to inform the participant, but also to require the nominee to inform the CEO.

Item 26 clarifies the scope of the rule-making powers in section 93 to ensure that the rules may prescribe the 'matters', as well as the 'criteria', to which the CEO is to have regard in appointing nominees.

Item 27 recasts subsection 209(2A) to make it clear that the NDIS Rules may provide for the specification of assessment tools by the CEO and the circumstances in which the CEO is to use the tools (for example, in deciding whether a person meets the disability or early intervention requirements).

Item 28 inserts a new provision dealing with NDIS Rules made before the commencement of this Act. The new provision provides that, for NDIS Rules made under the NDIS Act before the commencement of this item:

a)

those rules are taken to be, and to have been at all times, as valid as they would have been if the amendments made by this Schedule had been in effect when the rules were made; and

b)

anything done under those rules is taken to have been at all times as valid as it would have been if the amendments made by this Schedule had been in effect when the rules were made.

These provisions are necessary to ensure the validity of NDIS Rules made under the NDIS Act, and acts done under NDIS Rules, before the commencement of this Act. This is necessary because many of the NDIS Rules need to be made before 1 July 2013 so that the scheme commences from that date. No person's rights will be adversely affected by the retrospectivity.

Part 2 - General amendments

There are some references to 'mainstream community' in a small number of provisions in the NDIS Act. In the main, the NDIS Act refers to 'community', which is sufficient. Items 29 and 44 therefore omit references to 'mainstream' where they occur.

Section 9 defines early intervention supports as supports that are identified in the NDIS Rules as early intervention supports. Item 30 repeals this definition as rules are not being made under this provision.

Item 31 deletes the words, 'the plan nominee', from the definition in section 9 of plan nominee , and substitutes the words, 'a plan nominee'. This amendment is to clarify that more than one plan nominee may be appointed under subsection 86 (1) by the CEO.

Item 32 makes a minor amendment to the definition of registered provider of supports in section 9 to ensure that it is consistent with other provisions in the NDIS Act. Specifically, the definition is amended to include the words, 'or entity'. This reflects the fact that the CEO can approve a 'person' or an 'entity' as a registered provider of supports under section 70 of the NDIS Act. The term entity is defined in section 9 of the NDIS Act, while the term person is defined in section 2C of the Acts Interpretation Act 1901 .

Section 24 of the NDIS Act sets out the disability requirements. One of these requirements, set out in paragraph 24(1)(d), is that the person's impairment or impairments affect the person's capacity for social and economic participation. Item 33 amends this provision to replace the reference to 'and' with 'or', with the effect that the person could meet the requirement if one capacity or other is affected.

Item 34 repeals subsection 74(1A) and substitutes a new subsection 74(1A). The effect of this amendment is that, if a head (however described) of a Department of State of a State or Territory has parental responsibility for a child, the CEO must not make a determination under paragraph 74(1)(b) unless the head of a Department of State has agreed in writing to the making of the determination. A person who is the subject of a determination by the CEO under paragraph 74(1)(b) is able to do the things to be done by, or in relation to, the child as required or permitted under the Act. The effect of this amendment to this subsection is to provide that, when a head of a Department of State of a State or Territory has parental responsibility for a child, the same approach will be applied as when a State or Territory Minister has parental responsibility for a child.

Item 35 repeals subsection 75(3A) and substitutes a new subsection 75(3A). The effect of this amendment is that, if the head (however described) of a Department of State of a State or Territory has guardianship of a child, the CEO must not make a determination under subsection 75(2) or 75(3) unless the head of the Department of State has agreed in writing to the making of the determination.

A determination under subsection 75(2) provides that, despite subsection 75(1), if, under a law of the Commonwealth, a State or a Territory, a person has guardianship of a child, that person has parental responsibility for the child, unless the CEO determines that one or more of the persons referred to in subsection (1) instead have parental responsibility for the child.

A determination under 75(3) provides that, if subsection 75(1) would result in more than one person having parental responsibility for a child, the CEO may determine that one or more of those persons have parental responsibility for the child for the purposes of the Act. The effect of this amendment to this subsection is to provide that, when a head of a Department of State of a State or Territory has guardianship of a child, the same approach will be applied as when a State or Territory Minister has guardianship of a child under section.

Item 36 inserts the phrase, 'or being supported to do', into subsection 78(5). As amended, subsection 78(5) will allow a participant's plan nominee, who has been appointed on the initiative of the CEO, to do something relating to the preparation, review or replacement of a participant's plan, or the management of the funding for supports under the plan, if the nominee considers that the participant is not capable of doing, or being supported to do, the thing for himself or herself. This amendment implements Recommendation 23 of the Senate Standing Committee on Community Affairs report National Disability Insurance Scheme Bill, 2012 [ Provisions ].

Item 37 omits from subsection 86(1) the words, 'the plan nominee', and substitutes the words, 'a plan nominee'. This amendment is to ensure that more than one plan nominee for a participant may be appointed by the CEO under subsection 86(1).

Item 38 adds a new subsection 86(6). This amendment is to clarify that the CEO may appoint more than one person to be a plan nominee of a participant for the purposes of this Act.

Item 39 clarifies in section 90 (General circumstances in which CEO may cancel or suspend appointment of nominees) that a nominee is to respond to a notice issued under section 83 (Nominee to inform Agency of matters affecting ability to act as nominee).

Item 40 omits from section 90 the requirement that a nominee, in addition to informing the CEO that an event or a change of circumstances has happened or is likely to happen, must inform the CEO that this change is likely to have an effect referred to in paragraph 83(1)(b). These words are being deleted so that the notice process does not rely on a nominee forming a view about the effect referred to in paragraph 83(1)(b).

Item 41 adds a new paragraph 90(4)(c), which requires the CEO to have regard to the response provided by a nominee to any notice issued under section 83. After having regard to the nominee's response, the CEO may form a view that it is appropriate to suspend or cancel one or more of a nominee's appointments.

Item 42 makes a technical correction to paragraph 99(j). The reference to paragraph 74(4)(c) is replaced with a reference to paragraph 74(5)(c).

Item 43 inserts at the end of section 99 new paragraphs (r), (s), (t), (u) and (v). The new paragraphs provide that the following matters in relation to the waiver and write-off of debts under the NDIS Act are reviewable decisions:

•

a decision under section 190 not to write off a debt;

•

a decision under section 192 that the CEO is not required to waive a debt;

•

a decision under section 193 not to waive a small debt;

•

a decision under subsection 194(3) or (4) that the CEO is not required to waive a debt in relation to a settlement;

•

a decision under section 195 not to waive a debt because of a person's special circumstances.

Item 45 omits the word 'must' and substitutes the word 'may' in section 193.

Item 46 is an application provision. The item clarifies that Chapter 5 of the NDIS Act, and the NDIS Rules made for the purposes of subsections 35(4) and (5), apply to claims for compensation for personal injury:

•

made before or after the commencement of Chapter 5 of the NDIS Act;

•

concluded before the commencement of Chapter 5 of the NDIS Act; and

•

where the personal injury that gives rise to the claim occurred before the commencement of Chapter 5 of the NDIS Act.

Part 3 - Minor amendments relating to information

These amendments amend Part 2 of the NDIS Act, which deals with privacy. The amendments, which were suggested by the Privacy Commissioner, are designed to introduce greater consistency in language between the NDIS Act and the Privacy Act 1988 .

Items 47, 49, 50, 51 and 52 substitute the term 'collect' (or variations of that term) for the term 'obtain' (or variations of that term). The term collect is intended to have the same meaning as the term obtain in this context. It is intended to be interpreted broadly, to include the receipt, or coming into possession, of unsolicited information.

Item 48 substitutes the term 'consent' for the term 'authorisation'. The term consent is intended to have the same meaning as the term authorisation in this context. Item 52 (which also substitutes the term 'collect' for 'obtain') recasts subparagraph 66(1)(b)(ii) to refer to the express or implied consent of the person to whom the information relates in substitution for the reference to the express or implied authorisation of that person. Again, the term consent is intended to have the same meaning as the term authorisation in this context.

Part 4 - Amendments relating to actuarial, audit and risk management activities

Item 53 replaces current section 125A with a new section 125A. The substantively new provision is paragraph 125A(b), which sets out the requirement that the Board must consider the advice and reports of the audit committee in addition to that provided by an actuary. This requirement is in line with the Australian National Audit Office's best practice guide for public sector audit committees and the Australian Prudential Regulatory Authority's (APRA's) prudential standards.

Item 53 also adds a new section 125B. New section 125B empowers the Minister administering the Insurance Act 1973 to determine rules regarding the management of risks with which the Board must comply. These rules will be guided by APRA's prudential standards for risk management and shaped to reflect the specific nature of the scheme. The risk management framework is the totality of systems, structures, processes and people within the Agency (DisabilityCare Australia) that identify, assess, mitigate and monitor all internal and external sources of risk that could have a material impact on its operations and financial sustainability.

Item 54 repeals current subparagraph 180B(1)(a)(iii), and substitutes a new subparagraph 180B(1)(a)(iii). The new subparagraph alters the description of content that the scheme actuary must include within the annual sustainability report, to ensure that the Agency (DisabilityCare Australia) is not required to report on information or data about other service systems it may not hold.

Item 55 inserts an application provision, which provides that the amendment to paragraph 180B(1)(a) effected by item 54 (above) applies to assessments to be made the first time, and each later time, an annual report on the Agency (DisabilityCare Australia) under section 9 of the Commonwealth Authorities and Companies Act 1997 is being prepared.

Part 5 - Amendments relating to compensation

Item 56 inserts after paragraph 99(o) in section 99 new paragraphs (oa), (ob) and (oc). New paragraph 99(oa) provides that a refusal by the CEO to extend time to satisfy a notice issued under subsection 104(2) is a reviewable decision.

New paragraphs 99(ob) and (oc) provide that decisions made under paragraphs 105(4)(a) and 105(4)(b) are reviewable decisions. These decisions relate to the CEO taking action to claim or obtain compensation (paragraph 105(4)(a)) and to taking over the conduct of an existing claim (paragraph 105(4)(b)).

Item 57 inserts a new subsection 104(5A). The new subsection provides that the CEO may extend the period specified in the notice issued under subsection 104(2) if a participant or prospective participant makes an application to extend the time. During this time, a person will, for example, be able to further investigate or obtain independent legal advice, or medical assessments in relation to his or her compensation claim.

Item 58 inserts at the end of section 105 new subsections (5) and (6). New subsection 105(5) provides that, before the CEO may take action to claim or obtain compensation, or take over the conduct of an existing claim, the CEO must have regard to:

•

the disability of the person;

•

the circumstances that give rise to the entitlement or possible entitlement to compensation;

•

any impediments the CEO may face in recovering compensation;

•

any reason why the person has not claimed or obtained the compensation (including any response to a notice under subsection 104(2));

•

the impact (including any financial impact) of the CEO taking action to claim or obtain compensation or taking over the conduct of an existing claim on the person and his or her family; and

•

any other matter the CEO considers relevant, having regard to the objects and principles set out in Part 2 of Chapter 1 of the Act.

These amendments clarify for participants, prospective participants and their nominees the matters to which the CEO must have regard when considering whether to take action to claim or obtain compensation, or take over the conduct of an existing claim. They provide detailed guidance in relation to the exercise of the CEO's powers under section 105, consistent with the objectives of the scheme.

New paragraph 105(6) provides that the CEO may not take any action to claim or obtain compensation, or take over the conduct of an existing claim, unless the CEO has notified the person in writing that the action is being considered and 28 days have passed since the notice was given.