This new rights-based Act aims to address key recommendations from the Royal Commission into Aged Care Quality and Safety. The promise is that:
‘It will empower older people to exercise their rights when accessing, or seeking to access, Commonwealth-funded aged care services. It will support them to live active, self-determined and meaningful lives as they age’. [1]
Below is an overview of some key changes and how they will impact your operations as a provider.
THE KEY REFORMS
- Legal Duties for Providers and Responsible Persons
Under the new legislation, aged care providers will face significantly heightened responsibilities:
- A ‘provider duty’, requiring providers to implement robust safeguards against practices that could harm the health, safety, or wellbeing of care recipients.
- A ‘responsible persons duty’, meaning direct accountability for executives and directors. While criminal sanctions for breaches have been removed, serious civil penalties are introduced, holding leaders personally liable for failures in their responsibilities.
- Streamlined Registration and Proportionate Oversight
Providers will register using a single streamlined process and be classified into six categories based on the complexity and risk associated with their services. These categories will determine the level of regulatory oversight by the Aged Care Quality and Safety Commission.
Registration periods for providers will range from 3 months to a maximum of 3 years and 3 months, with regular reviews to ensure ongoing compliance. This addresses concerns raised by the Royal Commission about the lack of periodic reassessments for providers.
- Upholding Rights and Transparency
The new Act will include:
- A Statement of Rights, which providers will need to follow as a condition of ongoing registration.
- Whistleblower protections to allow staff, families, and residents to report non-compliance or misconduct without fear of retaliation.
- A modern Information Management and Privacy framework to safeguard the privacy of care recipients, while enabling transparency of provider performance. There will be clear rules about who can access and disclose ‘protected information’ – including personal data and sensitive financial details.
- Major Funding Reforms
The new Act introduces significant changes to funding structures:
- Means-tested services contribution, indexed twice a year.
- Government funding for clinical care services, while other non-clinical costs will be assessed and charged based on income and assets.
- Refundable Accommodation Deposits (RADs): There will be a fundamental change to RADs, with the introduction of a ‘retention amount’ – meaning that providers will deduct and retain 2% per annum of the RAD balance (calculated daily and charged no more than once per month) for up to five years. This is a shift from the current fully-refundable nature of RADs.
- Enhanced Oversight and Governance
The Aged Care Quality and Safety Commission’s monitoring and enforcement powers will expand, with the ability to:
- enter aged care facilities without notice in certain emergency situations; and
- make banning orders, to ban non-compliant workers or providers from the sector.
A new independent Complaints Commissioner will also be appointed, providing an accessible and impartial system for addressing grievances. Key features include:
- Autonomous operation with the Commissioner ensuring that complaints are handled independently, without undue influence from regulatory or operational teams.
- Simplified processes for residents, families, and staff to submit complaints.
- Comprehensive safeguards for whistleblowers, to encourage staff and others to report issues freely.
- A requirement for the Commissioner to report publicly on trends in complaints and resolutions.
- Wider scope
The scope of the Aged Care Act will be expanded to include programmes that have previously fallen outside the Aged Care Act, like the Commonwealth Home Support Programme and National Aboriginal and Torres Strait Islander Flexible Aged Care.
The new Act creates a permanent First Nations Aged Care Commissioner. This role aims to ensure culturally safe and equitable care for Aboriginal and Torres Strait Islander elders, aligning with broader Closing the Gap goals and international human rights commitments.
- Support at Home
The existing Home Care Package program will be replaced with a new Support at Home program. See our separate article, here.
TRANSITIONAL ARRANGEMENTS
The Aged Care (Consequential and Transitional Provisions) Act 2024 (the ‘Transitional Act’) will facilitate the transition from the existing legislative framework to the new system. The key provisions of the Transitional Act aim to ensure continuity of care and minimise disruption to services during the implementation of the Aged Care Act.
- Providers currently approved under the old framework will transition to being registered providers, unless they are determined to be inactive.
- Any pending applications for provider status that are not decided before the transition will automatically be processed under the new Aged Care Act.
- Providers must continue to meet existing reporting and notification obligations under the current Aged Care Act until the new Act takes effect on 1 July 2025. Any outstanding notifications or documentation must be submitted.
- Existing sanctions and banning orders will carry over to the new framework.
WHAT PROVIDERS NEED TO DO NOW
The transition to the new system begins in earnest, and aged care providers should be getting prepared as of now:
- Review and update policies to help meet the new statutory duties – namely, the provider duty and responsible persons duty.
- Be financially prepared for the funding reforms, particularly the impact of changes to RADs, client contributions, and clinical care funding.
- Training for leadership and staff on the new regulatory framework, in particular the statement of rights.
- Understand the new registration model, and the various risk categories.
A comprehensive review of internal processes, staff training, and financial planning will be critical to ensuring smooth compliance with the upcoming legislation.
Our Health and Aged Care team is available to assist providers in navigating the complexities of the new Act, and all transitional matters.
[1] Source: https://www.health.gov.au/our-work/aged-care-act/about
Written by David McMullen and Ryan Callanan
