New Aged Care Act - A Turning Point for the Sector

• Introduction

  Consistent with the Royal Commission’s recommendations, the importance of providing quality and safe care for individuals accessing or seeking government-funded aged care services is expressly acknowledged at the outset of Chapter 1.

  In addition to introducing the definitions and key concepts which are used throughout the new Act, Chapter 1 sets the foundation which underpins the obligations arising under the new Act when delivering funded aged care, including through the alignment of the new Act with Australia’s obligations under international human rights treaties.

  Statement of Rights

  • The Statement of Rights acknowledges the fundamental rights of individuals seeking and receiving funded aged care, ensuring their dignity, privacy and autonomy. It places an obligation on providers registered in certain registration categories to demonstrate an understanding of the Statement of Rights and have in place practices to ensure that the provider acts compatibly with the Statement of Rights;
  • Importantly, the Statement of Rights acknowledges that individual rights are not absolute. They must be balanced against the rights of other individuals and the practical considerations of staff safety and wellbeing. For example, while individuals receiving aged care services have the right to respectful and dignified treatment, providers must also ensure that one person's exercise of rights does not unduly impact others within the care environment.
  • It is also crucial for providers to understand that the rights articulated in the Statement of Rights are not enforceable in and of themselves. This means that individuals receiving aged care and services cannot directly take legal action solely on the basis of these rights.

  Statement of Principles

  • The Statement of Principles are to guide government agencies and bodies to ensure that the entire aged care system promotes the safety, health, wellbeing, and quality of life of those receiving funded aged care services.

  Supporters

  • Chapter 1 also outlines the arrangements for registered supporters of individuals who access aged care services. Specifically:
    • that a person who is a supporter of an individual must register and follow principles that promote supported decision-making; and
    • the duties of supporters and protections for supporters, suspension and cancellation of registered supporters as well as offences and penalties which may be imposed where a supporter abuses their position.

  Other key concepts that are introduced in Chapter 1 include:

  • establishing a publicly accessible, single service list for all funded aged care services;
  • articulating general requirements for an individual’s entry into the funded aged care system;
  • a definition of where funded aged care services are delivered (and where they are not delivered, including by expressly excluding certain other asset classes such as retirement villages, group homes funded under the NDIS and hospitals);
  • who delivers funded aged care services – including registered providers (which replaces “approved providers”), responsible persons (which replaces “key personnel” and “governing persons”), aged care workers and a new concept of associated providers;
  • setting out the suitability matters that will be considered by the Commissioner in relation to a provider’s responsible persons before registering or renewing the registration of an entity as a registered provider; and
  • the meaning of “high quality care”, “significant failure” and “systematic pattern of conduct” – key concepts informing the general duty to provide high quality and safe aged care.
• Entry to the Commonwealth aged care system

  Chapter 2 includes the requirements for individuals to access funded aged care services. The key concepts are eligibility, assessment, access approval, classification and prioritisation.

  Single point of entry

  • Under the new Act, there will be a single point of entry for individuals into the aged care system and a single tool for assessing (and re-assessing) an individual’s need for all Commonwealth-funded aged care services.

  Allocation of Places

  • Aged care places will be allocated to individuals directly (rather than providers) except in the case of specialist aged care programs such as the Multi-Purpose Service Program and the Transition Care Program. This approach aligns with the position that has been in place for home care for some time, reflecting a broader move towards consumer-directed care across the aged care sector.
• Registered providers, aged care workers and aged care digital platform operators

  Chapter 3 addresses:

  • the process for provider registration and renewal;
  • the publication of a Provider Register on the Commission’s website;
  • approval of residential care homes, as well as suspension and revocation of same;
  • the key obligations, including conditions of registration, with which registered providers must comply, as well as suspension and revocation of same;
  • the statutory duties that apply to registered providers and their responsible persons; and
  • other obligations on responsible persons and aged care workers – including to comply with the Aged Care Code of Conduct; and
  • duties and obligations of aged care digital platform operators.

  Conditions of registration

  • Registered providers must meet specific obligations, even when subcontracting service delivery.

  Associated providers

  • A new definition of ‘associated provider’ has been introduced. However, the responsible provider remains responsible for any contraventions of an associated provider.

  Obligations for workers and responsible persons

  • There are separate responsibilities which apply to aged care workers and responsible persons of registered providers.

  Varying registration

  • Chapter 3 sets out the process for changing registration conditions, such as adding or removing aged care homes.

  Failure to meet conditions

  • If providers fail to meet registration conditions, the Commissioner can take regulatory action, including suspending or revoking registration. This may result in civil or criminal penalties.

  Statutory duties

  • Registered providers, their responsible persons, and digital platform providers are subject to general, nondelegable statutory duties.

  Digital Platform Providers

  • Chapter 3 introduces a new definition of aged care digital platform and establishes a framework of duties and obligations for aged care digital platform operators.

  Transfer of aged care businesses

  We explore what the new Act will mean for the sale and purchase of residential aged care homes, in our implications of the aged care reforms for transactions involving residential aged care facilities.

  Statutory duties

  See our Aged Care Insight on the statutory duties of aged care providers and their responsible persons, as well as the impact of the new Act for digital platform operators.

• Funding of aged care services

  Chapter 4 details the funding arrangements for individuals accessing aged care services, including Commonwealth contributions and, depending on an individual’s means, individual contributions and fees, including:

  Commonwealth Funding

  • Commonwealth funding will be provided as subsidies or grants, including through specialist aged care programs.
  • The new Act differentiates between subsidies based on an individual's needs (person-centred) and those covering a provider's fixed costs (provider-based).

  Support at Home Funding

  • Chapter 4 provides the details for the new Support at Home program including funding for assistive technology and home modifications, and the end of life and restorative care pathways.

  Accommodation Agreements

  • For registered providers with residential care homes, the Chapter sets out the requirements for entering into accommodation agreements with individuals, the charging of accommodation payments and contributions, and the management of refundable accommodation deposits.
  • The new Act re-introduces the concept of registered providers being permitted to deduct and retain retention amounts (2% per year for 5 years) from refundable deposits, in addition to other permitted deductions.

  Fees and Contributions payable by individuals

  • The Chapter sets out the calculations and means testing process required to determine when the ‘hotelling contribution’ and the ‘non-clinical care contribution’ may be charged by registered providers.
  • A new ‘higher living fee’ replaces what currently are referred to as Additional Services Fees and Extra Service Fees.
• Governance of the aged care system

  Chapter 5 establishes the governance structure of the broader aged care system and sets out the functions of each part of the governance structure.

  The system is governed by the:

  • Secretary of the Department of Health and Aged Care (called the ‘System Governor’);
  • Aged Care Quality and Safety Commissioner (as both the quality regulator and prudential regulator);
  • Complaints Commissioner; and
  • Aged Care Quality and Safety Advisory Council.

  These roles collectively cover the administration of the aged care system (including facilitating equitable access to funded aged care services) through provider registration functions, the making of financial and prudential standards, the aged care worker screening database, investigating systemic issues within the system and handling of complaints.

  Reporting

  • Further to amendments made to the legislation on its way through Parliament, the System Governor is required to provide quarterly reports to the Minister on the duration of waiting periods for access to certain aged care services.
  • The new Act also provides for increased communication between Coroners and the System Governor and reporting regarding deaths of individuals accessing funded aged care services.
• Regulatory mechanisms

  Chapter 6 establishes the regulatory framework for the Commissioner, Complaints Commissioner, and System Governor and the mechanisms that are available for them to exercise their powers and functions which include:

  Regulatory Framework

  Adopts the framework from the Regulatory Powers (Standard Provisions) Act 2014 (Cth), with modifications specific to the Commonwealth aged care system including powers to impose and issue:

  • civil penalties;
  • infringement notices;
  • enforceable undertakings in relation to compliance with Chapter 3 provisions (obligations of registered providers);
  • injunctions to enforce Chapter 3 provisions;
  • required action notices in relation to:
    • issues raised in complaints, notifications, or other information received by the Commissioner;
    • matters related to the rights of individuals receiving funded aged care services;
    • non-compliance with a provider’s registration conditions or obligations; and
    • if there is reasonable suspicion that a registered provider is not complying with the Act.

  Accessing premises with and without consent

  • The Chapter sets out the circumstances where the Commissioner can authorise entry into a residential care home without consent or a warrant, and use force in specified circumstances.

  Information Gathering

  • There are enhanced powers to collect information and issue notices to keep the System Governor, Commissioner and Complaints Commissioner informed and address non-compliance by providers. Notably, these powers extend to issuing notices to persons to attend before an authorised officer to answer questions and/or to provide information or documents.

  Assurance Activities

  • The System Governor is authorised to conduct assurance activities to maintain the integrity of the aged care system and recover overpayments.

  Banning Orders

  • There is a continuation of banning orders to ensure only individuals and providers meeting required standards can operate in the Commonwealth aged care system.
• Information management

  Chapter 7 introduces a revised information management framework to enhance system transparency.

  Information Management and Protected Information

  • Information obtained or generated under the new Act relating to funded aged care services must be protected and only disclosed in permitted circumstances.
  • Unauthorised use or disclosure of ‘protected information’ is subject to criminal penalties.

  Whistleblower protections

  • Whistleblower protections encourage disclosures about suspected contraventions of the new Act by specifying the circumstances where a disclosure qualifies for protection.
  • Where an individual makes a ‘qualifying disclosure’ of information, the individual is afforded immunity from civil, criminal or administrative liability for making the disclosure.
  • Registered providers have specific obligations to ensure that aged care workers and responsible persons who make such disclosures are not victimised, and to protect discloser identities.
• Miscellaneous

  Chapter 8 addresses miscellaneous matters including:

  • Providing a pathway for seeking reconsideration and review of decisions by the Commissioner, the Complaints Commissioner, System Governor and Pricing Authority.
  • Specifying the new Act's application to entities such as partnerships and unincorporated associations.
  • Authorising approved forms, information requests, fee charges, and the use of computer programs for decision-making.

  Reporting on and review of the new Act

  The Chapter also provides for the certain reports on, and review of the new Act which must be tabled in both Houses of Parliament within specified timeframes, including:

  • The provision of an annual report on the performance of the System Governor’s functions during each financial year which must address certain articulated matters relating to the operation of the Act.
  • An independent review of the use of refundable deposits under the Act to commence no later than 31 January 2029 with the report tabled in each House of Parliament no later than 31 March 2030.
  • An independent review of accommodation pricing under the Act which must be conducted and tabled in each House of Parliament by no later than 1 July 2026.
  • An independent review of the operation of the Act within 6 months after the third anniversary of its commencement.

What next?

Follow our series ‘The New Aged Care Act: Are you ready?’ as we delve deeper into the new Aged Care Act and what it means for providers, including:

• implications of the aged care reforms for transactions involving residential aged care facilities.
• proposed statutory duties for providers and responsible persons.
• impact of the proposed reforms for digital platform operators.
• liability of registered providers and responsible persons.
• the framework for supporters of aged care consumers.
• whistle-blower protections and obligations of registered providers, responsible persons and aged care workers.
• regulation of sub-contractors and associated providers.