… but Senator Anne ‘Bolyn’ Ruston wasn’t losing her head.
A “Henry VIII clause” – the federal health and ageing minister’s ability to change the rules of the new Aged Care Act in the first two years of its operation without needing a legislative amendment – dominated conversation in a senate hearing this morning.
The Senate Standing Committee on Community Affairs convened for a fast and furious hearing on two bills that, if passed, are designed to help the transition to the new Aged Care Act on 1 November.
The Aged Care (Accommodation Payment Security) Levy Amendment Bill 2025, and the Aged Care and Other Legislation Amendment Bill 2025 (ACOLA) were introduced into Parliament on 24 July and make adjustments to the existing aged care legislation to make the transition a little smoother for providers, consumers, and government agencies like Services Australia.
The ACOLA Bill, the more substantial of the two, makes a number of transitional changes, including:
- ensuring that subsidies are paid correctly to support the provision of funded aged care to older Australians;
- further unspent funds accrued on behalf of older persons will also remain available to them under the new system;
- updated automated provisions which reflect best practice for transparency, clarity and the protection of older people, to ensure they receive faster and more robust decisions;
- authorisations for the proper use and disclosure of relevant, protected and personal information when it transitions from the old framework into the new framework;
- ensuring that funded aged care services are provided in a manner consistent with other Commonwealth legislation.
But it was the “Henry VIII” clause which caught the attention of the opposition health spokesperson, Senator Anne Ruston.
So-called because it was first used in 1539, giving Henry VIII the power to legislate by proclamation rather than through parliament, the clause in the ACOLA Bill gives the health minister the power to make rules modifying the operation of the primary legislation (the Aged Care Act 2024) during the first two years of operation of the new Act.
“This will ensure continuity of care is maintained for older people in the event of any unforeseen or unintended consequences and circumstances during the transition and implementation of the new rights-based aged care system that’s established by the new Act,” said Sonia Stewart, the deputy secretary of ageing and aged care at the Department of Health, Disability and Ageing.
“It’s important to note that this power is adapted and proportionate and may only be used when the Minister is satisfied that it’s necessary or appropriate to do so, and only in relation to the Commonwealth aged care system.
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“The rule should also be reviewed against the context of the supporting provision of funded aged care services.”
The deputy secretary also made it clear that any change made by the minister would be sunsetted at the end of the 24 months and could only be reinstated via a legislative amendment.
Senator Ruston wasn’t going to let the issue slide by, however.
“You [said] that any use of this power would have to be proportionate. Who makes the decision as to whether it’s proportionate or when the rule can be used?” she asked Ms Stewart.
“Ultimately that would be for the minister who makes the decision, noting that it’s a disallowable instrument and up to scrutiny,” said Ms Stewart.
“So what is disallowable?” persisted Senator Ruston.
The rule that is made using that power is disallowable, said the public servant. But, said the senator, if that rule is subsequently made an amendment via a legislative instrument after 24 months, isn’t that still disallowable? Yes, it is, said Ms Stewart.
“So what is the purpose of this [Henry VIII clause]?” asked Senator Ruston. “Why don’t you just do it by the normal mechanism? What is the advantage of this, as opposed to the normal mechanism?”
Ms Stewart replied:
“So usually, rules are made by utilising a specific rule-making power in a provision of the legislation. This is, rather than saying you have rule-making power for Section XYZ, this is saying you have a broad rule-making power for the entirety of the Act.”
Satisfied that any changes made by the minister would be subject to the same level of transparency and processes as a rule made by other mechanisms, Senator Ruston then asked if there would be a framework in place preventing the minister from, for example, increasing the percentage of the refundable accommodation deposit that an individual aged care client had to pay.
“That’s not something we’ve sought advice on, because it’s not the intended purpose [of the clause],” said Ms Stewart.
“The intended purpose is to use [the Henry VIII clause] as a fail-safe along the lines of policy that’s already been agreed.
“Technically, perhaps, yes, but that’s certainly not been our intention in the discussions with government.”
Aged care advocates OPAN and COTA, as well as providers Anglicare, UnitingCare and Bolton Clark also appeared at the hearing. All seemed satisfied to take the Henry VIII clause “in good faith”.
Both Chris Grice, CEO of National Seniors Australia, and Patricia Sparrow, CEO of COTA Australia, supported the role of the Inspector-General in monitoring and publicly reporting on the use of these powers.
Craig Gear, CEO of OPAN, emphasised the need for oversight to ensure that the Henry VIII clause did not increase costs for older people.