Issuing an infringement notice

The Aged Care Quality and Safety Commission (ACQSC) has recently published a Regulatory Bulletin RB2024-25 (Bulletin).

Under Part 5 of the Regulatory Powers (Standard Provisions) Act 2014 (Cth) (Regulatory Powers Act), the ACQSC may issue an infringement notice where there is ‘reasonable grounds’ to believe that a person or provider has failed to comply with particular offence or civil penalty provisions.

The infringement notice framework intends to provide an alternative to potential litigation, allowing a person or provider to resolve an alleged contravention and avoid further regulatory action without the requirement to admit guilt. The ACQSC will exercise its power where it considers there is no immediate risk to care recipients and that regulatory intervention will incentivise ‘positive change'. Given this, the penalties payable under an infringement notice are significantly lower than the maximum penalty that would be available to the Court under formal proceedings, being the lesser of 12 penalty units for an individual or one fifth of the maximum penalty prescribed for an individual under the legislation. However, corporations must be particularly vigilant in ensuring compliance as they are subject to higher penalties, at up to five times the maximum amount prescribed for an individual.

Under the Aged Care Act 1997 (Cth) (Aged Care Act) and its subordinate legislation, the power is enlivened for eighteen provisions:

Strict liability offences

Infringement notices are an available action for the ACQSC in response to seven offence provisions of the Aged Care Act, each imposing a maximum penalty of 30 penalty units. Despite being criminal offences by nature, given that the offences are strict liability, the ACQSC does not need to prove fault as a precondition of the offence, and may proceed on the basis that the offence took place regardless of the provider’s intentions to contravene the provision.

• Where a person fails to provide the ACQSC with information or documents in accordance with a notice given to the person by the ACQSC (s74GA of the Aged Care Quality and Safety Commission Act 2018 (Cth) (Commission Act));
• Where a provider fails to notify the ACQSC of a change of circumstances that materially affects the suitability of the approved provider within 14 days of the change (s 9-1 of the Aged Care Act);
• Where a provider fails to notify the ACQSC of changes to key personnel within 14 days, including the introduction or removal of key personnel and suitability matters (s 9-2A of the Aged Care Act);
• Where a provider fails to provide information relating to its suitability to be a provider within the period requested by the ACQSC (s 9-2 of the Aged Care Act);
• Where a provider does not provide requested information relating to refundable deposits, accommodation bonds, entry contributions within the specified period (s 9-3A of the Aged Care Act) or use of refundable deposits or accommodation bonds to make a loan (s 52N-3 of the Aged Care Act);
• Where a provider fails to comply with a notice by the ACQSC to provide information or documents relating to refund balances, before the specified time (s 9-3B of the Aged Care Act).

Civil penalty provisions

Infringement notices are an available action for eleven civil penalty provisions of the Aged Care Act, ranging from 60 penalty units to 1000 penalty units. The provisions require a civil standard of proof – meaning that, if the alleged contravention was considered by the Court, liability would need to be established on the balance of probabilities.

• A person intentionally causes or threatens harm to another person for the reason that the second person has or may made a protected disclosure to the ACQSC (ss 54-6(1) and 54-6(2) of the Aged Care Act);
• A provider, governing person of a provider or an aged care worker fails to comply with the Aged Care Code of Conduct (ss 74AB, 74AC or 74AD of the Commission Act);
• A person or corporation contravenes a banning order (ss 74GD(1)-(2) of the Commission Act);
• A provider fails to comply with certain notices given to the provider by the ACQSC (s 74EE(3) of the Commission Act), specifically:

• An Incident Management Compliance Notice;
• A Restrictive Practices Compliance Notice;
• A Code of Conduct Compliance Notice; or
• An Information Relating to a Reporting Period Notice.

Managing an infringement notice

Under an issued infringement notice, a person or provider will have 28-days to make full payment of the penalty prescribed in the notice. During this time, the ACQSC is not able to commence court proceedings for the alleged non-compliance, however, may consider other regulatory actions where there is an ongoing breach or where other noncompliances arise.

There are a several avenues available to a recipient in responding to an infringement notice:

• Payment of the penalty: If a recipient chooses to pay the prescribed penalty, the recipient will be released from any liability relating to that specific noncompliance, without admission of guilt. However, it is important to note that infringement notices have broader implications on a provider’s regulatory profile, including that a provider’s ‘Overall Star Rating’ will be capped at 1 Star until the ACQSC considers that the provider is working to resolve the noncompliance, and the provider will not be eligible for a 5 Star Compliance Rating for at least three years following the noncompliance.
• Withdrawal of the notice: Under section 106 of the Regulatory Powers Act, a person or provider may request the ACQSC to withdraw the notice. Given that there is no formal review pathway, a withdrawal decision is entirely at the discretion of the regulator, and will be assessed on a case-by-case basis. In our experience, recipients are best placed to seek a withdrawal in circumstances where the contravention has been remedied by the provider, the recipient has properly engaged with ACQSC and has demonstrated a strong history of compliance. However, it is important to note that a withdrawal of the notice does not absolve the recipient from liability, and the ACQSC may consider pursuing other regulatory actions including enforceable undertakings or referring the matter to a Court.
• Further action: After the 28-day payment period expires, where the recipient has not already sought an extension of time for payment prior to the deadline, the ACQSC may consider further regulatory options to manage the noncompliance. This includes progressing to Court proceedings, where the recipient would be exposed to significantly higher penalties.

Ultimately, the appropriate management of an infringement notice is determined in the circumstances and requires careful examination of the notice to understand the nature of the allegations and remedial steps required. A recipient should maintain open and cooperative communication with the issuing authority and be cognisant of the timeframes for its response, and seek legal advice where necessary, especially if there is uncertainty about the infringement or its implications.

Although the Bulletin has not introduced new powers for the ACQSC, the guidance serves as a key reminder of the broad suite of enforcement mechanisms available to the regulator. As we prepare for new Aged Care Act, which will see the ACQSC bolstered in its capabilities and given a more transparent view of the sector's operators, providers need to ensure that they are not only familiar with the current regulatory framework but are also proactive in assessing their alignment with the heightened expectations of the new regulatory climate.

Please reach out at any time if you have further questions, or if you would like to discuss this update.