A. Revising the law for aged care
In the next 40 years, the number of Australians aged over 65 is expected to more than double, with those aged over 85 to more than triple. Thinking about the needs of an older Australian population has resulted in legislation being rewritten in anticipation of providing the care that may be required.
Current funding arrangements have not been sufficient. In 2022-23, 46 per cent of aged care providers made a loss from residential aged care accommodation.[1]
The new Aged Care Bill (the ‘Bill’), which was tabled in parliament on 12 September 2024, proposes significant reforms. It is expected to pass through Parliament by the end of the year with a new Aged Care Act (the ‘Act’) in effect by 1 July 2025. These reforms aim to help aged care providers keep current residential facilities open, improve quality, and build new facilities, as well as provide increased aged care support to those who wish to stay at home.
If the Bill passes through Parliament to become legislation in 2025, aged care providers and ‘responsible persons’ who breach the law in their neglect, abuse or provision of sub-standard care to older persons, will face strong civil penalties, including fines of more than $1 million for serious cases, where the breach has led to a person’s death.[2]
‘Responsible persons’ as defined in the Bill capture those responsible for the executive decisions of a registered provider (including members of the governing body), and any other person who has authority or responsibility (or significant influence over) planning, directing or controlling the activities of a registered provider.[3] The definition is a broad one and forces better governance of service providers to ensure better protection for older persons in aged care.
B. Impact of proposed reforms
1. Funding
Statistics from June 2023 found 58% of residential care services and 67% of home care services were operated by not-for-profits.[4] These reforms will significantly impact them.
The government will invest $5.6 billion in a reform package, such as:[5]
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- A $4.3 billion investment in Support at Home, to come into effect on 1 July 2025.
- Essential changes to improve the funding, viability, and quality of residential aged care.
- A no worse off principle will provide certainty to people already in aged care and they won’t make a greater contribution to their care.
- New laws to protect older Australians in aged care, with stronger powers to investigate bad behaviour and civil penalties for breaching standards
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2. Focus
The reforms also ensure the focus of aged care services is on the person accessing them. Among the reforms proposed are:
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- A Statement of Rights for older Australians in aged care, with a positive duty for providers to uphold those rights.
- New duties to hold providers and people in positions of leadership accountable, along with a compensation pathway.
- New Quality Standards to drive continuous improvement and high-quality care.
- Stronger regulatory powers to protect people from harm.
- New whistleblower protections.
- A regulator with stronger investigative powers.
- A new, independent statutory Complaints Commissioner.[6]
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3. Stricter rules for aged care providers
The proposed reforms come with stricter rules and regulations that will affect aged care providers and subcontractors, which include:
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- Providers having to ensure their actions are guided by the Statement of Rights.
- Providers having to register with the Aged Care Quality and Safety Commission (ACQSC) (with transitional arrangements in place for existing providers) and have any residential care homes approved.
- Providers delivering National Aboriginal and Torres Strait Islander Flexible Aged Care (NATSIFAC) and Commonwealth Home Support Programme (CHSP) services will be registered under the new Act and regulated by the national regulator of Aged Care Service, the Aged Care Quality and Safety Commission (ACQSC).
- The new Act providing a revised set of provider obligations including conditions on registration.
- New Aged Care Quality Standards.
- Providers having to comply with new financial and prudential standards.
- Providers having to ensure their workforce meets revised worker screening requirements.
- Providers being subject to new statutory duties.
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4. Stricter rules for aged care workers
There are also key changes that will affect aged care workers, which include:
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- Ensuring a right for individuals to receive services delivered by aged care workers of registered providers with appropriate qualifications, skills and experience.
- Supporting aged care workers to:
- be empowered to support innovation, continuous improvement and the delivery of high-quality care
- participate in governance and accountability mechanisms.
- Increased protections through the expanded whistleblower protections.
- Compliance with revised worker screening arrangements.[7]
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5. Governance of the aged care system
Under the new regulations, the aged care system will be governed by the Secretary of the Department of Health and Aged Care (known as the System Governor) and the Aged Care Quality and Safety Commissioner, who will both have expanded regulatory powers.[8]
The Act will also establish a new independent Complaints Commissioner within the ACQSC to promote the independence, transparency, and accountability of complaints handling by the ACQSC, and create a more “person focused” complaints process.[9]
Conclusion
The increased funding will be good news for aged care providers; the more stringent screening on aged care providers and workers, and stricter governance of the aged care system will bring comfort and relief to those accessing aged care services and their families.
For aged care providers and anyone who is affected by the reforms and wish to better understand the proposed legal requirements under the forthcoming Act, we have a team who is happy to assist and can be contacted at our office.
Vocare Law is well equipped to assist our Charity and Not-For-Profit clients with a wealth of collective knowledge and over two decades’ experience providing insight and advice in this area. Please don’t hesitate to contact our office if you have any questions regarding the reforms proposed in the new Aged Care Bill and forthcoming Act, contact us on 1300-VOC-LAW / 1300-862-529 or email: enquiry@vocarelaw.com.au
This article was written by Siew Lau & James Tan.
**The information contained herein does not, and is not intended to, constitute legal advice and is for general informational purposes only.
Footnote
[1] https://www.health.gov.au/ministers/the-hon-anika-wells-mp/media/once-in-a-generation-aged-care-reforms
[2] Aged Care Bill 2024 (Cth) Explanatory Memorandum; also see https://www.abc.net.au/news/2024-09-13/aged-care-providers-face-fines-under-new-laws/104344162
[3] ParlInfo – Part 2—Definitions and key concepts (aph.gov.au)
[4] The Australian Institute for Health and Welfare found in June 2023 58% of residential care services and 67% of home care services were operated by not-for-profit organization: https://www.gen-agedcaredata.gov.au/topics/providers,-services-and-places-in-aged-care
[5] https://www.health.gov.au/ministers/the-hon-anika-wells-mp/media/once-in-a-generation-aged-care-reform
[6] https://www.pm.gov.au/media/once-generation-aged-care-reforms
[7] https://www.health.gov.au/our-work/aged-care-act/about/what-it-means
[8] https://www.health.gov.au/our-work/aged-care-act/regulation
[9] https://www.agedcareessentials.com.au/news/the-three-mega-reforms-coming-to-the-aged-care-industry-in-2024
