Cowell Clarke: Is your organisation ready for the upcoming Aged Care Act 2024?
- Australian Health & Aged Care
- May 1
- 6 min read
Key changes and actions providers members of the provider’s governing body, such need to take
The Aged Care Act 2024 (Cth) (“Act”) will officially commence on 1 July 2025, impacting those who deliver and receive aged care services in Australia. The Act will replace the current Aged Care Act 1997 (Cth) (“Current Act”) which regulates the aged care sector in Australia, and introduces a new system that aged care providers, workers, and other entities must comply with.
The changes seek to improve the quality of care for elderly Australians by placing their rights and needs at the centre of the aged care system.
As a provider, understanding and implementing these changes is essential to ensure that you are complying with your legal obligations and providing the best possible care.
Below we provide an overview of the key changes to be aware of, along with the essential steps providers need to take in the lead up to the commencement date of 1 July 2025.
Are you prepared? New duties for “Responsible Persons”
The Act introduces heightened accountability measures for “Responsible Persons”, formerly referred to as "key personnel” under the Current Act. Responsible Persons are those who have authority, responsibility or significant influence over the decisions, activities, or day-to-day operations of registered providers. This includes members of the provider’s governing body, such as the board of a registered provider.
Responsible Persons, with the exception of those responsible for nursing management or day-to-day operations, are now required to ensure that registered providers are complying with their own obligations under the Act.
Specifically, Responsible Persons must conduct active due diligence to ensure that providers do not engage in conduct that may cause harm to the health and safety of care recipients. Examples of this due diligence may include ensuring that providers have in place and are using appropriate resources and processes to manage the health and safety of individuals.
Responsible Persons who fail to comply with this duty may receive a $49,500 penalty, and where death, serious injury or illness occurs, a penalty of $165,000 may be imposed.
In order to be prepared for these changes, aged care providers and their Responsible Persons will need to take steps to understand, uphold and perform their new duties. This may involve updates to the provider’s policies and procedures, putting in place appropriate oversight and reporting frameworks, as well as the adoption of staff training programs.
Moreover, to ensure ongoing compliance for all parties, the board and executive team must develop and implement their own due diligence framework to ensure that they are meeting their obligations and are not engaging in conduct that could harm recipients’ health and safety.
Funding
Changes to funding, may require updates to existing agreements. On 1 July 2025, a number of changes will apply to the way aged care funding, fees and subsidies are managed.
For residential care providers, daily accommodation payments will be indexed twice a year, and residents may be required to make additional contributions to their care and accommodation. In particular, residential care providers will be required to subtract a ‘retention amount’ from the Refundable Accommodation Deposits (“RADs”) of eligible residents who begin their care after 1 July 2025. A RAD is a lump-sum payment made by a
resident to an aged care facility for accommodation, which is refunded upon leaving care. The introduction of a retention amount means that providers will be able to deduct and keep up to two percent of an eligible resident’s RAD per year, for a maximum of five years.
For home care providers, the new Support at Home program will replace the existing Home Care Packages and Short-Term Restorative Care programs, and will categorise funding into three areas: Clinical Care, Independence and Everyday Living. Existing care recipients will be protected under a “no worse off” principle, meaning that any additional fees under the Act will not automatically apply.
To remain compliant, providers should review their internal policies on charging and retaining fees to ensure that current practices align with the Act. Procedures should also be put in place to ensure that providers are appropriately documenting and communicating all fees to recipients and relevant authorities.
Providers must also review internal practices for claiming subsidies and other funding from the Commonwealth to confirm that the services they offer remain eligible for all payments. Taking these steps will help ensure that your organisation remains compliant with the Act, is maximising available benefits and is transparent in its financial dealings.
Aged Care Agreements – what needs to be updated?
Aged care providers in every category of care will need to update or prepare new aged care agreements to reflect the changes introduced under the new Act (including those outlined above).
For residential care providers who offer services above and beyond the standard requirements, a new type of agreement must be prepared: a Higher Everyday Living Agreement. This agreement will allow providers to charge a ‘Higher Everyday Living Fee’, which replaces the existing Additional Service Fees and Extra Service Fees under the Current Act.
In order to prevent residents from paying for services which they do not need or want, the Act prohibits a provider from entering or offering to enter into a Higher Everyday Living Agreement before a resident’s start day. Accordingly, providers wishing to charge for additional services must prepare a Higher Everyday Living Agreement which is separate from a Resident and Accommodation Agreement. Cowell Clarke is able to assist you in preparing new or update existing aged care agreements to ensure your
organisations’ unique needs are met.
Digital Platforms now subject to new responsibilities under the Act
Those who operate “Aged Care Digital Platforms” (“Platform Operators”) will now be subject to new responsibilities under the Act, which aim to regulate the publication of aged care information. An Aged Care Digital Platform is an online service (such as a website or system) that facilitates the delivery of aged care by connecting people with aged care providers for a fee. An example may include a website which shows a list of residential homes in a person’s area, and subsequently charges these homes a
fee to be included on the website, or the individual a fee to access the list of homes.
These previously unregulated Platform
Operators must now verify and display certain information about the providers on their sites or system. Practically, this means:
Verifying registration: Platform Operators must check if the advertised provider is registered to deliver aged care services.
Showing what they can do: If a provider is registered, Platform Operators must display the specific types of services they are authorised to provide.
Checking for bans: Platform Operators must confirm and display whether the provider has any current or past banning orders.
Additional obligations will apply to Platform Operators who are trading or financial corporations, including:
Notifying the commissioner: Platform Operators must inform the Commissioner that they operate an Aged Care Digital Platform.
Complaints and incident management: Platform Operators are required to set up a system for handling complaints and incidents related to their Aged Care Digital Platform. The complaints system must be displayed for the public to view.
Report information: If required, report complaints, incidents and other information to the relevant authorities.
Display rights: Platform Operators must prominently display the aged care “Statement of Rights” on their Aged Care Digital Platform, so that individuals are able to better understand their rights and protections.
Record keeping: Platform Operators must keep and retain detailed records of certain information.
These changes are designed to protect consumers and increase trust by ensuring that
they are provided with reliable information when selecting an aged care service.
Our experts can help you navigate these changes
The Aged Care Act 2024 represents a significant reform of the aged care sector as Australia’s focus on quality care and accountability grows.
At Cowell Clarke, we understand that preparing for these changes can be complex, and we are here to support you in achieving compliance with confidence and ensuring the best possible outcomes for your organisation.
To assist you and your team to prepare for the upcoming changes, Cowell Clarke is offering a free, detailed and regularly updated Compliance Checklist – a resource designed to help aged care providers navigate their obligations under the Act
Don’t know where to begin? Contact our Aged Care, Retirement Living and Health team for further information and assistance on providing the best possible care.
This article is for general information only and cannot be relied upon as legal advice. The application of obligations under the Act will depend on the type of provider you are and the services you offer. Do not act on the basis of this document but seek specific advice from your legal adviser
