The Australian aged care sector is undergoing significant regulatory change with the introduction of the new Act which replaces multiple existing laws.  The Act creates a unified framework designed to improve the quality and safety of aged care services. 

Providers must now navigate new compliance requirements, including strengthened clinical governance obligations and a shift to a risk-based regulatory model.

A new standard for high-quality care

The Act defines and enforces a new standard of "high-quality care" (s 20). Aged care providers will now be subject to civil penalties for failing to meet this standard. 

The definition includes:

• person-centred care models;

• improved clinical governance structures; and

• a focus on safety and risk mitigation

This shift moves providers toward a proactive approach to ensuring high-quality care across the sector.

Risk-based regulatory model

Providers will need to demonstrate their suitability under a risk-based and ongoing oversight system. This change allows for more agile responses to compliance breaches and emerging risks. 

The Act also introduces work health and safety-style duties (s 179), requiring providers to take "reasonably practicable" steps to avoid causing harm to individuals receiving care.

Strengthened provider registration and oversight

Under the new Act, all aged care providers delivering Government funded aged care services must be registered with the Aged Care Quality and Safety Commissioner (Chapter 3). 

Registration is valid for three years and is subject to:

• compliance with the Aged Care Code of Conduct (s 145);

• audit requirements under the Aged Care Quality Standards (s 110); and

• strict governance and workforce oversight conditions

Failure to meet these obligations may result in suspension (s 129) or revocation (s 131) of registration. 

The registration process is now streamlined, with six categories based on service complexity and risk, ensuring proportionate oversight and regular reviews.

Strengthened clinical governance and accountability

Clinical governance will be central to aged care regulation, reinforcing accountability at all levels. 

Providers must demonstrate continuous improvement (s 147) and integrate the six core elements of clinical governance, namely:

leadership and culture;

• consumer partnerships;

• organisational systems;

• monitoring and reporting;

• workforce capability; and

• communication and relationships.

Executives and directors will be held personally accountable for failures in care delivery, with serious civil penalties introduced for non-compliance.

Enhanced reporting and consumer protection

Aged care providers must now report a wider range of "reportable incidents" (s 16, s 164), including:

• unlawful sexual conduct;

• psychological abuse;

• financial abuse (e.g., theft or coercion);

• use of restrictive practices; and

• unexpected deaths

Failure to report such incidents can lead to regulatory penalties and reputational damage. 

Additionally, providers must comply with a new Statement of Rights and strengthened whistleblower protections to ensure transparency and accountability.

Financial and funding reforms

The new Act introduces major funding reforms, including:

• Means-tested service contributions indexed twice a year;

• Government funding for clinical care services;

• Non-clinical costs assessed based on income and assets; and

• A ‘retention amount’ for Refundable Accommodation Deposits (RADs).

These changes aim to create a more sustainable and equitable funding system while ensuring financial transparency.

Expanding the scope of care services

The new framework broadens the scope of regulated aged care services, including:

• integration of home and community care services, replacing the Home Care Package program with a new Support at Home program;

• inclusion of the Commonwealth Home Support Programme and National Aboriginal and Torres Strait Islander Flexible Aged Care; and

• creation of a permanent First Nations Aged Care Commissioner to oversee culturally appropriate care.

The new Act also introduces transitional arrangements to ensure continuity of care and minimise disruption during implementation.

To prepare for the Act’s implementation on 1 July 2025, aged care providers should:

• Review clinical governance frameworks: Ensure alignment with the new Quality Standards and risk-based regulatory approach.

• Strengthen incident management processes: Implement robust systems for reporting and responding to reportable incidents.

• Assess workforce training needs: Ensure compliance with the Aged Care Code of Conduct and governance requirements.

• Update policies on restrictive practices: Align with new legislative requirements and human rights principles.

• Engage with regulators early: Understand registration and compliance expectations to avoid penalties.

The new Act represents a major shift in the regulatory landscape. Providers must take a proactive approach to compliance to meet new legislative requirements and continue delivering high-quality, safe aged care services.