New Aged Care Act Reforms Set to Transform Australia’s Aged Care Sector

Three all-encompassing mega reforms are set to transform Australia’s Aged Care industry! A new ‘Aged Care Act’, strengthened aged care quality standards, and a new model for regulating aged care are all launching in 2025. These long-overdue changes will have a profound impact on the operations of aged care providers across the country. Here’s what you need to know… 

Today, Australia’s aged care services help approximately 1.5 million older people to receive care and support, with taxpayers contributing a whopping $28 billion to a range of programs between 2022 and 2023.  

Despite this, the country’s aged care sector has found itself under increased community and regulatory scrutiny in the past decade, especially following the independent public inquiry by the Royal Commission which took place  between 2018 and 2021 in response to disturbing reports of abuse and non-compliance in the sector.  

Currently, Australia’s aged care sector is facing an aging population with complex medical conditions and care requirements. The introduction of these three interrelated reforms to aged care standards will provide a blueprint for the future of Australia’s aged care sector and promises greater regulatory clarity and improved care for older Australians for future generations to come.  

The centerpiece of the ongoing legislative reforms is the New Aged Care Act, which was created in response to the recommendations made by the Royal Commission into Aged Care Quality and Safety following the public inquiry. It will guide aged care providers to adopt a more patient-centric aged care system where older generations are “treated with respect and have the quality of life they deserve”. The new guidance aims to improve how older people receive care and services in their homes, community, and in approved residential aged care homes.  

In this blog, we explore each of these three mega reforms, discuss the impact they will have on the aged care sector, and explain how the right technology can help providers successfully meet the requirements of these reforms.  

The New Aged Care Act

The proposed reforms to the New Aged Care Act are based on recommendations from the Royal Commission’s 2021 report. The Commission’s fundamental criticism of the old act was that the structure of the Act should focus less on providers and how to fund them, and more on consumers and their needs. As a result, the new act has shifted its focus from ‘providers’ to the rights of care recipients – who are now referred to as ‘Individuals’ in the New Act. The aim of the reforms is to shift aged care industry legislation to a model that will put the rights of the elderly at the center of the aged care system. 

When implemented, these reforms will provide a complete overhaul of the outdated Aged Care Act 1997. The updated Aged Care Act will embed new arrangements that ensure older people are treated with the respect they deserve – it is also designed to boost the strength and capacity of workers and create a more effective regulatory model for the sector.  

The rollout of the long-awaited new Aged Care Act will mark a significant shift for the funded aged care sector and bring forth a wide range of changes that will impact those who deliver aged care services.  It will empower the elderly to exercise their rights when seeking to access government-funded aged care services. It will ensure the elderly are entitled to the support and care they need to prolong their capacity to live independently.  

Key changes incorporated in the new Aged Care Act include:

• A new definition of high-quality care that prioritizes the individual’s needs, upholds their rights, and supports their physical, cognitive, and social well-being – whilst ensuring cultural safety and work empowerment. 

• A new legal underpinning which places a clear emphasis on human rights and aligns Australia’s commitments to international agreements such as the International Covenant on Economic, Social and Cultural Rights, and the Convention on the Rights of Persons with Disabilities.  

• A single assessment process with assessors trained to carry out all assessments across both home and residential care – independent of the aged care provider.  

• The inclusion of a new Statement of Rights, which stresses principles like consumer choice, dignity, and safety – aimed at providing a clearer framework for older individuals selecting care services. 

• A new Statement of Principles which will steer the decisions, actions, and conduct of everyone operating in the aged care system. 

• A new regulatory and enforcement framework model that places greater importance on “relational regulation”, with meaningful engagement between stakeholders. 

The new Aged Care Act will also feature strengthened ‘whistleblower protection’ – providing more support for aged care employees and more guidance for employers and their whistleblowing policies & procedures.  

The fundamental processes firms should look to implement before 2025 to ensure they are compliant with the requirements of the new act include:

• Emergency preparedness and response plans and an active business continuity plan.
• Governance and controls to ensure care standards align with the new requirements.
• Systems to support informed decision making for patients and their families.
• Processes to document self-assessments & audits to provide proof of compliance.
• Incident reporting systems to ensure all patient incidents are escalated & dealt with promptly.
• Establishing clear governance structures to ensure accountability at all levels.
• Transparent reporting mechanisms for both financial and operational performance.
• Formalized systems to collect feedback & complaints and facilitate discreet whistleblowing.
• Adopting digital operating models to document care outcomes and collect patient data to provide proof of quality of care.
• Robust recruitment & retention strategies to meet workforce demands.

The government has confirmed that the new act will commence in July 2025. Since every aged care provider will be impacted by these dramatic reforms, they will need to implement the relevant changes as soon as possible to ensure they are fully compliant by July 2025. 

The Strengthened Aged Care Quality Standards 

The strengthened Aged Care Quality Standards have been designed to improve outcomes for older people and set clear expectations for providers in the delivery of quality aged care. The Royal Commission found that the existing Standards only set out minimum acceptable standards for accreditation and do not necessarily motivate and empower providers to achieve high levels of care and outcomes for the elderly. The commission identified several areas of improvement – including governance, diversity, dementia, food and nutrition, and clinical care.  

The strengthened Standards were developed as part of the broader regulatory reforms. They have been designed to work together with other reforms under the new Aged Care Act including the proposed new model for regulating aged care, which will set out provider obligations and a registration system.  

There are 7 standards in total addressing the following areas:

Standard 1 – The Person – This standard focuses on the dignity and choice of patients. Organizations must respect and uphold the individuality, dignity, and preferences of aged care recipients, ensuring personalized care.

Standard 2: The Organization – This standard provides guidance around ongoing self-assessment and implementing governance procedures and planning to ensure that assessments are conducted regularly and reflect the evolving needs of individuals – ensuring person-focussed care for everyone.

Standard 3: Care and Services – Under this requirement aged care providers will need to deliver safe, high-quality personal and clinical care services that meet professional standards and the specific needs of the individual – enabling them to take risks and make decisions.

Standard 4: The Environment – This standard requires aged care organizations to provide services and support for daily living that enhance the quality of life, promoting independence, health, and social engagement for those in care. It also requires good infection prevention and control (IPC) practices. 

Standard 5: Clinical Care – This requirement ensures that the environment where clinical care is provided is safe, clean, and accessible – improving a person’s quality of life, independence, confidence and their feeling of purpose in daily life.

Standard 6: Food and Dining – This standard is about working with older people to find out what they like to eat and drink and providing varied food choices in residential care.

Standard 7: The residential community – This acknowledges that when people move into a residential service, the new community becomes a central part of their lives. It’s important for people to feel safe, included and respected.

The New Regulatory Model

According to the recommendations by the Royal Commission, a new way of regulating the aged care industry is also required due to ineffective regulation being one of the key contributing factors to the high levels of substandard care in Australia’s care system. Therefore, a  New Regulatory Model is being introduced to align with the new Aged Care Act. The new regulatory model aims to make regulation less “one-size-fits-all” and more focused on the type of care each provider offers. This new way of regulating the sector will seek to prevent harm to people receiving aged care services and ensure that instances of substandard care are detected and addressed immediately and appropriately. 

The new regulatory model will have changes in the following areas:

• How providers enter the sector 
• Provider obligations 
• Regulatory oversight of the sector 
• How complaints and feedback are managed
• Information available to older people. 

Providers will be split into 6 different categories depending on the services they provide:

Category 1         Home and community services
Category 2         Assistive technology and home modifications
Category 3         Advisory and support services
Category 4         Personal care and care support in the home or community (including respite)
Category 5         Nursing and transition care
Category 6         Residential care (including respite)

The providers will need to operate in line with the requirements laid out in their registration categories and provide proof of compliance.

For the first time providers will also be regulated against the following programs:

• Commonwealth Home Support Programme (CHSP) 
• National Aboriginal and Torres Strait Islander Flexible Aged Care (NATSIFAC) Program. 

Consequences of Non-Compliance

In any industry, breaching regulations can result in severe consequences. But in the aged care sector, the weight of responsible services is not only driven by the fear of hefty financial penalties but also by concern for the well-being of an entire section of society. 

With the new act hyper-focused on the needs of the elderly, rather than providers, it follows that the consequences for non-compliance are now severe, especially with aged care residents now having the ability to apply for compensation.  

The new Act will also give the Aged Care Quality and Safety Commission more powers. These include suspending or revoking a provider’s registration and the power to apply for civil penalties.  

Aged care providers have until July 2025 to comply with the new Aged Care act and the new regulatory requirements and reforms. Once the legislation is implemented, any breaches or non-compliance could result in criminal penalties, so its vital providers avoid these repercussions.  

How can software help aged care providers align their processes with the new requirements?

Implementing an integrated GRC solution to manage risk, ensure compliance, resolve incidents, capture feedback & complaints, and implement good governance across the organization is a great way to structure operations to align with the amended requirements. Camms GRC software allows care facilities to implement best practice processes to satisfy the requirements of regulators and auditors with the following capabilities: 

Audits & Inspections 

Firms can use the software to schedule and prepare for all their audits & inspections. Teams can easily schedule and plan upcoming audits using a centralized register, capture findings, and follow up on recommendations. Automated workflows & action management enables aged care providers to effectively implement findings for the recommendations identified.  Audit results can be linked back to related risks or compliance obligations. To expedite the set-up process, teams have the option to replicate existing audit setup details for similar or recurring audits.  

Risk Management  

Aged care providers can use GRC software to establish a digital risk register and roll out risk assessments online, set up a control framework to successfully manage risks, and monitor risk against KRI’s, KPI’s, and risk appetite. Workflows can be used to escalate risk and implement treatment actions. Dashboards & reports can be leveraged to highlight key actions and gain a holistic view of risk. By adopting an automated solution, risk teams can identify, track, and manage risk with confidence and link risk to strategic objectives to achieve their goals.

Incident Reporting & Management  

Aged care providers must have an effective incident management system in place to capture incidents, near misses, and hazards, and to conduct investigations, determine impact, and monitor cases until closed. By tracking this information centrally, teams can easily spot and track incident trends and introduce controls to prevent incidents, reduce reoccurrence, and improve governance and patient care. Staff can easily log incidents via online forms that feed into the digital incident log. Third-party vendors can also log incidents through the Camms vendor portal. Incidents can be linked back to risks, processes, and staff to understand where incidents occur. Providers can use the software to conduct investigations, escalate incidents, and perform root cause analysis. 

Whistleblowing, feedback and complaints  

With the Camms software for whistleblowing & disclosures, aged care providers can implement an anonymous whistleblowing and disclosures portal to enable staff, patients, families, and contractors to report potential incidents of misconduct, wrongdoing, or substandard care. These online portals keep consumers, employees, and the organization connected in real-time after an incident is logged. The discreet portal ensures secure communication between the parties involved in the case until the case is resolved. The online portal can also be used to capture feedback & complaints from families, staff, and residents, and to roll out surveys & questionnaires to proactively improve quality of care.

Protect staff & patients with a comprehensive GRC platform 

The changes implemented in the New Aged Care Act reflect a long overdue shift towards a rights-based approach in the sector. Aged care providers must now look for ways to adapt their operations and strategies to incorporate these changes while placing a heavy emphasis on compliance and a focus on meeting the individual needs of the residents.  

The very nature of caring for the elderly & vulnerable demands good governance, efficient incident reporting, and a risk-aware culture that empowers providers & caregivers and protects those in need. 

The Camms GRC Platform is a cloud-based risk and incident management solution that can support organizations to implement best-practice processes for risk and incident reporting and ensure compliance with the Serious Incident Reporting Scheme (SIRS). Our solution empowers employees to report on operational and clinical incidents and near-misses with an intuitive user interface, creating a single source of truth for executives to have clear insight into organizational risks, incidents, and near-misses. 

To discuss how we can best help your organization successfully comply with these three mega reforms in the aged care sector that will take center stage in July 2025, reach out to us for a demo today!