SANCTIONS FOR NON-COMPLIANCE WITH THE DSA

9.2 The only sanction currently available in the DSA for non-compliance is the withdrawal of funding to a service. Under section 16(1), the Minister may, at any time, suspend the payment of future instalments of funding for up to 28 days or may terminate payments completely. Before the Minister terminates future instalments, he or she must notify the person or organisation receiving the assistance of the proposed termination and the reasons for it. That person or organisation must be given a reasonable opportunity to make submissions to the Minister which must be taken into account before the Minister decides to terminate financial assistance.¹

9.3 The Minister is unlikely to take either of these steps, even when a service fails to comply with the objects, principles and applications of principles, because such action would cause a decline in the standard of service or closure of the service. Closure of a residential disability service, in particular, would significantly disrupt the lives of service users, who, given the lack of available disability services, may be unable to find alternative accommodation. Consequently, these provisions have a limited role as a means of enforcing the provisions of the DSA.

Views in submissions

9.4 The CSC submitted that a service may not comply with the legislative requirements of the DSA for many reasons, including:

• the inability of a service to manage its resources to provide progressive improvements;
• lack of knowledge and skills to implement the necessary changes; or
• a service may disagree with the framework of the DSA.²

• vary the terms or conditions of funding;
• appoint an administrator for a service;
• stop a service from admitting any more clients;
• name a service in Parliament;
• conduct more frequent monitoring; and
• require a person receiving individual funding to seek help from a service to administer the funds.⁴

9.6 The current provision for the temporary suspension or complete withdrawal of funding for non-compliance with the provisions of the DSA is inadequate. In most cases, such action will be a disproportionate response resulting in a worse outcome for service users. More appropriate sanctions are required in order to facilitate the achievement of the objects, principles and applications of principles under the DSA.

9.7 In the Commission’s view, the Minister must have the power to impose a range of sanctions if a service does not comply with the DSA, or with the terms and conditions on which funding is granted. This range of sanctions should be diverse in both nature and severity. Suspending or terminating funding would be at the most severe end of the spectrum, and given the likely detrimental consequences for service users, should be considered a last resort. The range of sanctions should also provide for the possibility that, at some time in the future, persons with a disability may receive individual funding packages to purchase their own services directly. The Commission recommends that the DSA be amended to provide a range of sanctions, as outlined above. The Minister should, where appropriate, be able to take one or more of these measures, after considering the circumstances of the service or individual in question.

9.8 The power to impose sanctions is a substantive power, provision for which should be made in the DSA rather than in the terms and conditions of a funding agreement. Locating this power in the DSA also has the advantage of enabling external merits review of Ministerial decisions to impose sanctions.⁵

Recommendation 36

The DSA should be amended to enable the Minister to:

• vary the terms or conditions of funding of a service;
• appoint an administrator to a service;
• stop a service from admitting any more clients;
• name a service in Parliament;
• conduct more frequent monitoring; and
• require a person receiving individual funding to seek help from a service to administer the funds.

9.9 Concern was expressed in submissions and during consultations that the DSA does not adequately protect people with a disability who are at serious risk of harm. The CSC noted:

People with disabilities continue to be subject to abuse, neglect and other forms of harm whilst in the care of services, despite the introduction of the DSA, and its associated service standards, a formal guardianship system, the work of the CAMA bodies, and continued work of active and vigilant advocacy groups and individual advocates. For adults with disabilities in particular, there is an absence of an appropriate framework for protection from abuse.⁶

9.10 Several submissions argued that there should be a legislative framework for reporting, and responding to, abuse of people with a disability which would be similar to the care and protection framework available to children. There was a suggestion that the ADT should have jurisdiction to make protective orders where a person with a disability is being subjected to harm or abuse due to a service provider’s failure to comply with the objects, principles or applications of principles.⁷ NCOSS suggested the adoption of an approach similar to that used by ADD in developing Elder Abuse Protocols.⁸ On the other hand, it was submitted that the power to remove a person where there is immediate harm could be misused. One submission argued that it may be better to develop good practice protocols in situations where removal is being considered to ensure that the rights of all parties are taken into account.⁹ Another submission suggested that the necessary powers should be given to the police.¹⁰

The Commission’s view

9.11 Effective measures are required to handle situations where a person with a disability is at serious risk of harm in a service. However, the Commission does not believe that the ADT is the appropriate body to respond to such situations. The Commission discusses this issue in its report on the review of CAMA. It concludes that the ADT, which is a review body not having original jurisdiction in community service matters, is not an appropriate body to exercise the injunctive powers suggested.¹¹

9.12 Where a person has been assaulted, abused or neglected, the police have powers to take action to protect the victim and take action against any person who has committed an offence. In the Commission’s view, the police should be called when a person with a disability using a service is assaulted, abused or neglected or at serious risk of harm while using a service, regardless of who the perpetrator may be. However, ADD should develop protocols with the police, the CSC and DOCS for handling such situations, particularly where a person with a disability has been harmed, or is threatened, by another person with a disability. An integral part of such protocols should be the provision, by ADD, of emergency accommodation for people with a disability who require it in these circumstances.

9.13 Further, the protocols should provide that where police have been called because a person with a disability has been assaulted, abused or neglected, the police must notify ADD and the CSC. One or both of the agencies should carry out an investigation into the incident. The service should also be registered as a service of concern with DisQAC and be subject to close monitoring. In the Commission’s view, resources should be allocated to enable the development of appropriate policies and protocols, the training of staff and for monitoring activities to be performed.

Recommendation 37

ADD should develop protocols with the police, the Community Services Commission and the Department of Community Services for handling incidents where a person with a disability is assaulted, abused or neglected or at serious risk of harm.

The protocols should provide, among other things, that:

• ADD and the CSC should be notified whenever police are called to a service;
• the incident should be investigated by ADD or the CSC;
• the service should be registered as a service of concern with DisQAC and be subject to close monitoring; and
• emergency accommodation should be provided for persons with a disability who require it in these circumstances.

Merits review

9.14 Merits review of an administrative decision is the process whereby the facts, law and policy aspects of the original decision are considered afresh by a merits review tribunal and a new decision is made which either affirms, varies or sets aside the original decision.¹² The merits review tribunal may substitute the original decision with a new decision which it considers to be the correct and preferable decision or may remit the matter back to the original decision-maker for reconsideration. The establishment of the ADT is the first step towards a comprehensive system of merits review of administrative decisions in NSW.¹³

9.15 Administrative decisions may also be reviewed by a court to determine whether the decisions were made lawfully. This process is known as judicial review. The legality of an administrative decision is generally determined by the application of two broad common law doctrines. The first is whether the decision-maker acted beyond his or her powers and the second relates to whether the process of decision-making was fair.¹⁴ A court exercising judicial review may not generally consider the merits of the decision and generally cannot, like a merits review tribunal, substitute what it considers to be the correct and preferable decision for the decision under review. It may, instead, quash the original decision or refer it back to the decision-maker for reconsideration.¹⁵

Principles for merits review of decisions

9.16 In its report on CAMA, the Commission outlines the basis on which administrative decisions should or should not be subject to merits review. The Commission concludes that decisions are appropriate for merits review if they are made under an enactment, are administrative in nature and are likely to affect the interests of a person.¹⁶ Such decisions should be reviewable even where they are made by a non-government service provider as long as the decision would have been reviewable if it were made by a government department or agency.¹⁷

9.17 In guidelines developed by the Attorney General’s Department to assist in the establishment of the general jurisdiction of the ADT, decisions of an administrative nature may include:

• decisions to grant or refuse to grant a licence, authority or approval;
• decisions to suspend, terminate, revoke or cancel a licence, authority or approval;
• determinations of an entitlement; and
• decisions relating to the protection of vulnerable persons.¹⁸

9.19 The DSA should continue to include a section which sets out the decisions that are reviewable by the ADT. The issues for the Commission in this chapter are whether the decisions currently reviewable are appropriate for merits review and whether there are other decisions made pursuant to the DSA which should be, but are not currently, reviewable by the ADT. The Commission’s recommendations in relation to the transition process, the quality assurance system and the range of sanctions for non-compliance will have an impact on these issues.

Current review provisions

9.20 The following decisions are reviewable on their merits by the ADT:²³

• a decision approving the grant of funding where that approval should not have been given under section 10(2) because the funding would not conform with the objects, principles and applications of principles;²⁴
• a decision to provide funding to an eligible service provider where the terms and conditions on which the funding is provided do not comply with section 12;²⁵
• a decision to provide funding to a person or eligible organisation in relation to the conduct of an approved research or development activity if the terms and conditions on which the funding is provided do not comply with section 13;²⁶
• a decision not to conduct a review under section 15 or to conduct a review that does not accord with the requirements of that section;²⁷
• a decision to terminate future instalments of approved financial assistance if those instalments have been terminated otherwise than in accordance with section 16;²⁸ and
• a decision belonging to such class of decisions as may be prescribed by the regulations.

• a decision made by the Minister or the Director General to provide, or to continue to provide, a service which does not conform with the objects, principles or applications of principles under the DSA;²⁹ and
• a decision made by the Minister to adopt or amend a transition plan, or to refuse to adopt or amend a transition plan, within the meaning of section 7 of the DSA.³⁰

9.21 When the DSA was drafted, the disability sector was particularly concerned to ensure that any breach of the objects, principles and applications of principles would be subject to scrutiny by an independent body.³¹ As the Act does not create any statutorily enforceable rights for breach of the objects, principles and applications of principles,³² another way of promoting adherence with the goals of the DSA is to make the provision of financial assistance conditional on conformity with the legislative requirements of the Act. Thus, as noted above, the DSA allows certain decisions, alleged to be made in contravention of the objects, principles and applications of principles, to be challenged on their merits.³³

Submissions

9.22 The capacity to review, on their merits, funding decisions and decisions to approve transition plans where there is no transition funding allocated, is a matter of some controversy. The NSW Government has submitted that section 20 appeals are not appropriate for merits review for two reasons. First, it is argued that they relate to funding decisions with significant polycentric elements which are properly a function of the Executive and as such, are subject to parliamentary scrutiny.³⁴ In contrast, other submissions argued that section 20 appeals (and appeals against decisions to approve transition plans) should continue to be available as they are essentially the only means to ensure that the legislative requirements of the DSA are met.³⁵ Some submissions argued that decisions which may be reviewed under section 20 are not decisions relating to the actual allocation of funding, which are generally considered inappropriate for merits review.³⁶ Rather, they are decisions relating to the eligibility of a service to receive funding and should therefore continue to be reviewable.³⁷

9.23 Secondly, the Government argued that such decisions should not be reviewable on their merits because of the absence of appropriate remedies. It submitted:

it is not in anyone’s interest for the [Tribunal] to decide that a service does not comply with the Act’s requirements when there is realistically nothing the service can do to bring itself into conformity or to provide better alternative arrangements.³⁸

The Commission’s view

9.24 The current review provisions are unusual in that they provide for the merits review of decisions on grounds that are ordinarily associated with judicial review.⁴¹ In other words, they allow decisions to be challenged on the ground that the Minister (or Director General as the case may be) had no power to make the decisions under the DSA. Section 10(2), for example, provides that the Minister may not approve the provision of financial assistance unless satisfied that providing the assistance would conform with the objects, principles and applications of principles under the Act. A decision of the Minister to approve funding to a service in contravention of this section would normally give rise to an action for judicial review, on the ground of want of power, yet it is reviewable on its merits under section 20(1)(a).

9.25 The decisions set out in section 20(b)-(e) also appear to provide for review in circumstances where the Minister has acted contrary to the provisions of the DSA. Sections 12 and 13 require the terms and conditions on which financial assistance is provided to deal with certain specified matters.⁴² Review of a decision to provide financial assistance under section 20(b) and (c) therefore involves considering whether the terms and conditions under which financial assistance has been provided deal with the matters specified. The question is whether the decision has been made according to law and is once again normally a matter for judicial, rather then merits, review. Similarly, review of a decision under section 20(d) is concerned with whether the Minister has ensured that a review under section 15 has been conducted and whether it was conducted in accordance with the requirements of that provision.

9.26 A review under section 20(e) is concerned with whether future instalments of funding have been terminated in accordance with the procedures set out in section 16.⁴³ This is another classic ground for judicial review, namely, whether the process of decision-making was fair. Reviewable decisions under the CAMA Regulation also relate to decisions made by the Minister or his or her delegate which were decisions beyond their powers under the Act.

9.27 The Commission appreciates that the intention of section 20 and the associated provisions in the CAMA Regulation were to ensure compliance with the objects, principles and applications of principles under the DSA. However, it is evident that the current review provisions are contrary to general prinicple. If implemented, the Commission’s recommendations regarding the transition process, the quality assurance process and the Minister’s power to fund services, will address the concerns with the current review provisions.

Impact of the Commission’s recommendations

Disability Services Quality Assurance Council (DisQAC)

9.28 In Chapter 7, the Commission recommends that an independent quality assurance process be established.⁴⁴ Under the proposed arrangements, all services will be assessed against a set of revised Standards by an independent panel of service providers and consumers. Services which meet the requisite level of quality service provision will be certified by DisQAC for periods of one, two or three years. Under the new arrangements, the Minister will be empowered to fund only those services that are certified by DisQAC.

9.29 New services will have to conform fully with the objects, principles and applications of principles under the DSA in order to qualify for certification by DisQAC. Those non-conforming services which were in existence at the time the DSA came into force will continue to be in transition. However, the Commission recommends the adoption of a two-stage process to replace the current transition process.⁴⁵ Under this new system, the Minister will be required to give each service notice of when it will receive transition funding and when it is expected to reach full conformity.

9.30 Stage 1 services, those whose transition funding is not imminent, will be required to prepare a plan demonstrating how the service is meeting identified basic criteria.⁴⁶ Stage 2 services, whose transition funding is scheduled to be received within 12 months, will be required to prepare a final transition plan outlining how and when they will achieve full conformity with the DSA.⁴⁷ Both Stage 1 and Stage 2 transition plans must be lodged and assessed by DisQAC. If satisfied that a Stage 1 transition plan meets the identified minimum standards, DisQAC may certify a Stage 1 service. A Stage 2 service will be certified if DisQAC is satisfied that the final transition plan will assist the service to reach full conformity and that, until fully implemented, the Stage 2 service is complying as closely as possible with the requirements of the DSA. Certification means the service is eligible to receive funding.⁴⁸

9.31 A decision to certify or refuse to certify a service is an administrative decision made pursuant to the Act which is likely to affect the interests of persons involved in the service, given the direct link to funding. Consequently, if these recommendations are implemented, the Commission believes that a decision of DisQAC to certify or refuse to certify a new service or a Stage 1 or Stage 2 transition service should be reviewable by the ADT. A decision that a service has or has not complied with the requirements of the quality assurance process should also be reviewable given the implications that such a decision may have on the funding of a service.

9.32 The effect of these arrangements is to transfer responsibility for determining a service’s eligibility to receive funding from the Minister to an independent body. This has the advantage of separating the eligibility decision from the actual funding decision while simultaneously ensuring that services must conform with the requirements of the DSA in order to be eligible to receive funding. The decisions of DisQAC should replace the current review provisions in section 20 of the DSA and the CAMA Regulation. If the Minister decides to provide financial assistance to a service that is not certified by DisQAC, in contravention of the DSA, an application may be made for judicial review in the Supreme Court on the ground that the Minister has acted beyond his or her powers.

Decisions to impose sanctions

9.33 The Commission has also recommended that the Minister should be given power to impose a broader range of sanctions against non-conforming services.⁴⁹ If these recommendations are implemented, the Minister will be empowered to make decisions which appear to be appropriate for merits review. A decision to impose a sanction is administrative in nature, made under an enactment and is likely to affect the interests of persons concerned with the service. Subject to two exceptions, the Commission believes that the Minister’s decision to impose any of the sanctions recommended should be reviewable by the ADT.

9.34 A decision to name a service in Parliament or a decision to order more frequent monitoring of a service are, in the Commission’s view, inappropriate for merits review. These are less severe sanctions which are likely to be imposed as interim measures on those services which are not in substantial breach of the DSA. Persistent non-compliance or more serious breaches of the Act will in all probability attract a sanction which will have a greater impact on the service and on the interests of persons involved with the service.

Recommendation 38

Section 20 of the DSA and clause 6(1)(b) and (c) of the CAMA Regulation should be repealed and replaced by the following:

The DSA should be amended to include a section which provides that the following decisions are reviewable by the ADT:

• a decision by DisQAC:

– to certify or refuse to certify a Stage 1 or Stage 2 transition service;

– to certify or refuse to certify a new service as conforming with the objects, principles and applications of principles under the DSA; and

– that a service has or has not complied with the requirements of the quality assurance process.

• a decision by the Minister to:

– vary the terms or conditions of funding;

– appoint an administrator for a service;

– stop a service from admitting any more clients; and

– require a person receiving individual funding to seek help from a service to administer the funds.

1. DSA s 16(2).

2. CSC, Submission.

3. IP 16 at para 2.57.

4. Disability Safeguards Coalition, Submission; C Latham, Submission; DeafBlind Association of NSW, Submission; Multicultural Disability Advocacy Association of NSW Inc, Submission; Physical Disability Council of NSW Inc, Submission; NSW Council for Intellectual Disability, Submission; Institute for Family Advocacy and Leadership Development Association Inc, Submission; and Confidential Submission 1.

5. See para 9.33-9.34.

6. CSC, Submission at 3.

7. Disability Safeguards Coalition, Submission; CSC, Submission; Citizen Advocacy NSW, Submission; Institute for Family Advocacy and Leadership Development Association Inc, Submission; H Seares, Submission; and People with Disabilities (NSW) Inc, Submission.

8. NCOSS, Submission at 18.

9. Western Sydney Intellectual Disability Support Group Inc, Submission.

10. The Spastic Centre of NSW, Submission.

11. Report 90 at para 5.121-5.122.

12. M Allars, Introduction to Australian Administrative Law (Butterworths, Sydney, 1990) Ch 7 generally; and Australia, Administrative Review Council, Better Decisions: Review of Commonwealth Merits Review Tribunals (Report No 39, 1995) at para 2.2-2.3. See also Report 90 at para 5.4.

13. See Report 90 at para 5.5.

14. M Allars, Introduction to Australian Administrative Law (Butterworths, Sydney, 1990) at 161 and Ch 5 and 6 generally on the principles of judicial review.

15. See, for example, Administrative Decisions (Judicial Review) Act 1977 (Cth) s 16(1). However, the line between the legality and the merits of a decision is not always distinct: see M Allars, Introduction to Australian Administrative Law (Butterworths, Sydney, 1990) at 162-163.

16. Report 90 at para 5.51.

17. Report 90 at para 5.66.

18. NSW, Attorney General’s Department, Guidelines to Assist in the Establishment of the General Jurisdiction of the Administrative Decisions Tribunal at 1-2. See also NSW, Parliamentary Debates (Hansard) Legislative Council, 27 June 1997, the Hon J W Shaw QC MLC, Attorney General, Second Reading Speech at 11279; and Report 90 at para 5.51.

19. Report 90 at para 5.52.

20. M Allars, Introduction to Australian Administrative Law (Butterworths, Sydney, 1990) at 27.

21. Australia, Administrative Review Council, Twenty-second Annual Report 1997/98 at para 4.62-4.63.

22. For a more detailed discussion, see Report 90 at para 5.54-5.60.

23. DSA s 20.

24. Section 10(2) provides that the Minister may not approve the grant of financial assistance unless the Minister is satisfied that providing the financial assistance would conform with the objects, principles and applications of principles under the DSA.

25. Section 12 provides that the terms and conditions of a funding agreement must deal with a number of matters including the extent to which the service must conform with the legislative requirements of the DSA, the purposes for which the funding may be used, the amounts to be applied for those purposes, the outcomes that are to be achieved for persons with a disability using the service and their rights in relation to the service and the performance indicators that are to be used in evaluating the outcomes achieved.

26. Section 13 outlines the matters that must be dealt with in the terms and conditions of a funding agreement for the provision of financial assistance to an organisation for approved research or development activity.

27. Section 15 provides that the Minister must ensure that services are reviewed at least every 3 years to determine the extent to which they comply with the terms and conditions of the funding agreement and to determine whether they are achieving the agreed outcomes. See also para 7.28.

28. Section 16 provides that before terminating funding altogether, the Minister must notify the service of the proposed intention and give the service a reasonable opportunity to make submissions which must be taken into account before a final decision is made.

29. CAMA Regulation cl 6(1)(b).

30. CAMA Regulation cl 6(1)(c).

31. NSW, Parliamentary Debates (Hansard) Legislative Assembly, 11 March 1993 at 767-768.

32. DSA 25(1) provides that a breach of the objects, principles and applications of principles does not give rise to any cause of action under the Act.

33. See para 9.20.

34. NSW Government, Submission at 1-2.

35. CSAT, Submission at 16-17; People With Disabilities (NSW) Inc, Submission at 27; Disability Safeguards Coalition, Submission at 11; and Burnside, Submission at 5.

36. See para 9.18 and Report 90 at para 5.54-5.60.

37. People With Disabilities (NSW) Inc, Submission at 27.

38. NSW Government, Submission at 1.

39. See Report 90 at para 5.52.

40. See para 9.3.

41. See para 9.15.

42. These matters include:

• the extent to which the organisation must conform with the principles and applications of principles in connection with the provision of those services;

• the purposes for which the financial assistance may be applied;

• the amounts to be applied for these purposes;

• the outcomes to be achieved for persons in the target group as a result of the provision to them by the eligible organisation of designated services, and their rights in relation to the provision of designated services or otherwise; and

• the performance indicators to be used in measuring the outcomes achieved for persons in the target group.

44. See para 7.17-7.28 and Recommendations 26-28.

45. See para 6.16-6.18 and Recommendations 18-23.

46 See para 6.19.

47. See para 6.20.

48. Note: the Commission recommends that the DSA be amended to provide that the Minister be empowered to fund only those services that have been certified by DisQAC. See para 6.20 and Recommendation 24.