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Not just a new Aged Care Act – the Australian Government's proposal for a new aged care regulatory regime

• 29 June 2023 • 18 min read
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A new regulatory model for Commonwealth funded aged care services is expected to commence on 1 July 2024, together with the new Aged Care Act (with an exposure draft of the new rights based Aged Care Act due to be available in December 2023).[1]

December 2023 update: The exposure draft of the new Aged Care Act is now available (link). Consultation on the exposure draft will close on Friday, 16 February 2024.

The Department of Health and Aged Care (Department) has published a comprehensive paper outlining the proposed new regulatory model. Entitled “A new model for regulating aged care; Consultation Paper No 2: Details of the proposed new model” (Consultation Paper), it sets out a detailed proposal for the way in which aged care services that receive Commonwealth funding will be regulated into the future. A summary paper has also been published on the Department's website.

The Department is seeking feedback on its proposal for the new regulatory model, and each chapter of the publication ends with a series of questions to facilitate that feedback. The regulatory model builds on the findings of the Royal Commission into Aged Care Quality and Safety (Royal Commission) that the "current regulatory system is no longer fit for purpose".[2]

Providers are uniquely placed to respond to the proposed model, having experience of the current system, where it works well and where improvements could be made to ensure a fit for purpose regime. In particular, to consider whether the regime is likely to achieve the outcomes of ensuring the provision of high quality and safe care to consumers, rewarding those providers who do and identifying where there are risks to consumers.

In an overview of the proposed new model the following key issues are noted, being, changes to:

  • provider eligibility and entry
  • provider obligations
  • regulatory oversight
  • complaints and feedback mechanisms
  • information sharing

The end of the Approved Provider –
Provider registration and re-registration

  • Under the proposed framework, all providers of Australian Government subsidised aged care services, including providers in receipt of Commonwealth Home Support Program funding, will be required to be registered. This will replace the current approved provider and accreditation arrangements, replacing them with requirements for registration and, at defined intervals, re‑registration.
  • This change will be in addition to impending requirements for the registration of workers in aged care services.
  • To be registered, providers will be required to:
    • meet yet to be specified prudential and financial standards; and
    • if required, meet the requirements of any audit against the revised Aged Care Quality Standards (Quality Standards).
  • Providers will be required to register in respect of each site or service where aged care services are delivered. Each site included in the provider’s registration and removal of a site being a variation to the same.
  • Sole traders and other non-corporate entities will be able to become registered providers to deliver home care and community care services. This change to the current position will not apply for residential aged care providers who will continue to be required to be constitutional corporations.
  • In a further change, registration will not be a ‘set and forget’ process. Rather, registered providers will be required to re-register at the end of each registration period. The standard registration period is expected to be three years. However registration periods may be able to be varied by the Regulator (currently the ACQSC) to respond to particular risks, whether based on the kinds of aged care services delivered or on a per provider basis in response to identified concerns.
  • Provider obligations will differ depending on which category they are registered in.
  • Certain providers will be audited against the Quality Standards and compliance will be graded (rather than merely being met or not met) against those standards.
  • As noted, it is intended that the new Aged Care Act will commence on a specified single 'go-live' date. The new regulatory scheme will commence on the same date. In order to avoid all existing providers being required to register before the expected commencement date, the Department is proposing a deeming process so that approved providers (and CHSP providers) will be deemed to be registered in certain categories of providers (subject to providers being required to give certain information to the Department).
  • It is also expected that re-registration periods (and the payment of registration fees to be implemented by the Department to enable cost recovery) will be staggered, to avoid all providers being required to be re-registered at the same time. The period of initial registration will depend upon certain (yet to be specified) risk considerations, past performance and the time of the provider’s last accreditation.[3]

A new legislative definition of 'high quality care'

The report of the Royal Commission discussed at length the importance of aged care services providing safe and high quality care to older Australians.

It is proposed that the new rights based Aged Care Act will include both a Statement of Rights of consumers (rather than this being found in regulations or principles) and also a definition of ‘high quality care’. It is suggested that ‘high quality care’ will be taken to mean care and services provided to individuals that prioritise:

  • delivery of services with compassion and respect for the individuality, life experiences, self-determination and dignity of a person accessing care, and their quality of life;
  • providing services that are trauma-aware and healing-informed and responsive to the person’s expressed personal needs, aspirations, and their preferences regarding how services are delivered to them;
  • facilitating regular clinical and non-clinical reviews to ensure that the services delivered continue to reflect their individual needs;
  • supporting the person to enhance their physical and cognitive capacities and mental health where possible; and
  • supporting the person to participate in cultural, recreational and social activities and remain connected and able to contribute to their community.[4]

In considering the regulatory framework that is needed to ensure the delivery of high quality care, the Department proposes that its new model will focus on building and strengthening relationships between the providers and older people, the Regulator and providers, and older people and the Regulator.

Not a one-size-fits-all model: Provider categories
for registration and compliance

Under the new model, providers will be required to register in one or more categories based upon the kinds of aged care services they offer or intend to offer.

At present, six categories of registration are proposed in the Consultation Paper, with provider obligations increasing for each category from category one to six as follows:[5]

    CategoryDescriptionService types

    Category 1

    Home and community services
    • domestic assistance
    • home maintenance and repairs
    • meals
    • transport
    No clinical skills are required to provide these services.
    Category 2Assistance technology and home modifications
    • digital technologies
    • digital monitoring, education and support
    • goods, equipment and assistive technologies (non digital)
    • home modifications
    Category 3Social supportSocial support services – usually relationally based and higher frequency of services
    Category 4Clinical and specialised support
    • personal care
    • care management
    • transition care (in the home)
    • specialised supports
    • assistance with care and housing (housing and squalor support)
    • nursing
    • allied health

    It usually involves consumers who are frail and may have cognitive impairments, and may require coordination of services.

    Clinical skills and a system of clinical governance required

    Category 5Home or community-based respite servicesRespite care - usually centre based and requiring more than one care worker due to the length of continuous care required
    Category 6Residential care
    • accommodation services
    • residential respite
    • care and services
    • transition care (residential)
    • transition care support services (residential)

    24/7 ongoing care of the older person required

    services are higher risk due to the frailty of older persons and associated risks (e.g. restraint use)


    The new categories will allow for a more flexible approach to monitoring risks with lower categories having a ‘light touch’ regulatory regime comprising monitoring and intelligence gathering only (noting that many of the services in categories 1 to 3 may be subject to other regulatory regimes).

          The Department has noted that, where possible, obligations will be aligned with service offerings under the NDIS.

          For all categories, the Regulator will undertake monitoring and receive intelligence in order to be able to proactively respond to risks in the sector. That monitoring and intelligence gathering is intended to be a more continuous process and broader than the current periodic audits and complaints management functions of the ACQSC.

          The Department is seeking feedback on the categories and the high level descriptions (noting that these will need to be built into the new Aged Care Act which is being developed concurrently). In particular, fine tuning of the risk-based approach to regulation in each category will be important to guard against two possibilities:

          • under regulation – resulting in increased risks to older persons; and
          • over regulation which places an excessive burden on providers and acts as a disincentive to remaining a registered provider.

          The classification system will also mean that the obligations which apply to providers may not be the same across all categories. While there are likely to be some common obligations (noted as conditions of registration) certain other obligations will be category specific.

          Compliance with the Quality Standards will only be required for registered providers in categories 4 to 6. Moreover, it is not expected that each category of providers will be required to comply with all of the Quality Standards. Conformance with Standards 6 (Food and Nutrition) and 7 (The Residential Community) would apply only to providers in category 6.

          The systems, policies and procedures of potential new providers in categories 4 to 6 will be audited against the Quality Standards as a condition of registration. Re-registration will require providers to demonstrate that their services conform to the relevant Quality Standards.

          It is intended that providers will receive a graded outcome to any audit against the Quality Standards, with the intention of recognising and rewarding providers who are able to demonstrate that they exceed expectations and show elements of best practice, noting those who largely conform, those who show minor non-conformance and providers with major non-conformance to the expected standards. It is expected that the outcomes of the audits will be published along with the star ratings of providers.

          Regulatory action and enforcement powers

          Of particular importance to providers will be the proposed enforcement powers of the Regulator and the Department under the new Act.

          There are two themes evident in a review of the proposed new regulatory model:

          • firstly, a proposal for a compliance and enforcement policy or regime that is more consistent with other Australian Government agencies, starting with guidance, support and education for providers and progressing to the exercise of enforcement powers where deemed necessary to respond to identified risks; and
          • secondly, an intention for the regulator to undertake continuous monitoring of all providers using intelligence and data gathering (rather than relying on periodic audits or checks).

          The Consultation Paper notes the intention that all stakeholders including consumers and their families, providers and the Regulator develop collaborative relationships that will enable the sharing of ideas, support and education. This is a worthy aim but achieving it will require a significant cultural shift to develop the trusted relationships that are required. It is not easy to achieve when the Regulator is also the party with significant enforcement powers.

          It is worth considering this aim against the proposed framework for monitoring compliance and enforcement actions under the new regime.

            The new model proposes that all providers will be monitored on an ongoing basis, drawing on data and intelligence from a number of sources including provider registration, complaints, reportable incidents, provider notifications and reporting, audit outcomes, worker screening and the Department and other regulators such as the NDIS Quality and Safeguards Commission.[6]

            Where a provider or service is considered to be high risk they will be prioritised for further risk based monitoring which could be site based, desk based, unannounced or announced.

            Intelligence and data will also be used to inform an understanding of system wide risks that may need to be addressed.

            When risks eventuate, it is intended to streamline the current system of notices into two forms only:

            • a Requirement for Action Notice (which will require a provider to do something or to stop doing something); and
            • a Compliance Notice for a failure to respond adequately or at all to a Requirement for Action Notice.[7]

            The powers of enforcement available to the Regulator (and, where needed the Department) are proposed to be broader than those currently available, drawing upon the Regulatory Powers (Standard Provisions) Act 2014, which is already in place and informs the compliance and enforcement policies of a number of Australian Government agencies.

            Enforcement powers for the Regulator (where needed, the Department) are proposed to include:

            • the power to suspend, vary or revoke a provider’s registration or change the conditions of their registration
            • powers to issue banning orders for providers and workers
            • powers to issue infringement notices, to require providers to enter into enforceable undertakings or powers to apply for civil penalties
            • offence provisions, which are likely to apply in circumstances where death or serious injury has resulted from gross negligence or recklessness in the delivery of aged care services

            The Department notes that following on from the Royal Commission, compensation pathways are also being explored which could apply in circumstances when a person suffers harm arising from a serious breach of the provider’s obligations or from their failure to ensure that the health and safety of care recipients is not put at risk.

            Next steps

            There is a significant level of detail about the proposed regulatory framework in the Consultation Paper. It is clear that the Department is well advanced in its thinking around a new system of regulation that reflects a modern risk‑based approach to regulating aged care services. Providers would be well advised to take the time to consider what is proposed in the Consultation Paper and to take advantage of the opportunity to provide feedback to the Australian Government about the new model based on their experiences of service provision.

                  We're experienced in assisting providers prepare for and navigate changes to their governance responsibilities.

                  Contact our team to discuss your queries and how we can assist your organisation with practical advice to support you in navigating this most recent round of changes.

                  [1] Aged Care Reform Activity - Roadmap published by the Australian Government Department of Health and Aged care
                  [2] Consultation Paper, page 5
                  [3] Australian Government Department of Health and Aged Care A new model for regulating Aged Care Consultation Paper No 2: Details of the proposed new model at page 66
                  [4] Consultation Paper, page 52
                  [5] Source: page 29
                  [6] Consultation Paper, page 56
                  [7] Consultation Paper, page 60

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