The Aged Care Act 2024 (new Act) encapsulates several years of reform, incorporating recommendations made by Royal Commission and multiple inquiries for systemic change – it's an inflection point for the aged care sector and it becomes operational on 1 July, 2025.

As providers refine their focus on the impact of the impending changes, we pause to reflect on some of the key elements of new Act with which we are now more familiar and consider some of elements which remain unclear.

What we know:

Reform to date

The new Act incorporates recent regulatory reform, including board composition requirements, care minute obligations, and increases to the maximum refundable deposit payable without approval.

Federal Budget 2025/26

Although aged care was not the primary focus of this year's Budget, the Government has committed additional funding to the sector. The funding aims to support aged care workers by providing increased wages to attract and retain skilled staff, enhancing the quality of care provided to individuals.

Human focused

The new Act draws on a different constitutional power (the external affairs power) to encapsulate the new Act's focus on person-centred care and human rights, with the new Statement of Rights front and centre.

Provider accountability

The new Act empowers the Aged Care Quality and Safety Commission (Commission) with increased, more flexible and adaptive regulatory enforcement powers.

Conditions on registration

Building upon existing obligations, the new Act introduces conditions on a provider's registration. It creates a clearer regulatory enforcement link and enables the Commission to impose more conditions on registration where a provider is non-compliant, signalling enhanced expectations of providers.

• The conditions on registration include demonstrating an understanding of the Statement of Rights and ensuring that funded services are delivered in a manner that is compatible with those rights.
• The Statement of Principles must underpin a provider's operation on four key areas: person-focused, valuing workers and carers, transparency and sustainability, and continuous improvement.
• The new Act introduces a definition of high quality care which has three limbs: it puts the individual first, uploads the rights of an individual and prioritises holistic factors such as kindness, compassion, and connection to community.

Strengthened Quality Standards

Seven strengthened Quality Standards (Standards) will also be introduced alongside the new Act to include vital areas such as food and nutrition, dementia, diversity, governance and clinical care. All registered providers must comply with the strengthened Standards as a condition of their registration, however, different Standards will apply to different registered providers depending on their registration category.

Statutory duties and compensation pathways

The new Act incorporates existing legislation in parallel frameworks to improve provider accountability. It introduces statutory duties mirroring Work Health and Safety legislation and enable individuals to seek compensation where a provider or its responsible persons fail to meet their duties.

What we don't know:

Aged Care Rules

The Aged Care Rules 2025 (Rules) that will accompany the new Act have been released iteratively since September last year. Although the Rules are expected to be over 900 pages in length, only 500 pages have been released to date, with many of those 500 pages consisting of placeholders for provisions that are yet to be drafted. Unlike a Bill, the Rules as subordinate legislation do not need to pass through both Houses of Parliament, which will expedite their implementation.

Guidance material

Unhelpfully, the Department of Health and Aged Care (Department) is yet to release the Aged Care Act Policy Manual which will hopefully provide greater clarity around the operation and enforcement of the Aged Care Act. The Department has, however, released the Support at Home Handbook, Transition Guide and Program Manual – although these guidance documents are in draft form and subject to change following the finalisation of the Rules.

Federal election

A Federal election must take place before the new Act comes into effect. There is a growing push within the sector and among providers to delay the implementation of the new Act to allow for adequate preparation and to ensure continuity of care for individuals. Given this momentum, a newly elected Liberal government might be open to postponing the new Act's commencement to allow for a more staged approach of the reforms.

Transitional arrangements

The new Act will take significant resources to implement and it's unclear what transitional arrangements the Government proposes to implement. While the Aged Care Transition Taskforce was established to assist the sector transition to the new Act, little has been publicly announced about its progress.

Operational considerations

The new Act requires providers to overhaul their policies, procedures and systems. It requires engagement with affected individuals, who will need to be consulted and understand the impact of the changes on their care. Equally, staff will need to be upskilled and trained on their new obligations, such as the strengthened whistleblower provisions.

Funding uncertainty

The new Act introduces a different funding and contributions regime. With caps on care management and package management being scrapped for Support at Home with fixed pricing proposed to be implemented in 2026, it's still unclear how the new funding arrangements will impact on the ability of providers to deliver high quality care.

Our team is here to support you every step of the way as you prepare for and transition to the new Act. If you have any questions or need guidance on what the transition period will look like for your organisation, we are ready to help.

Please reach out to us to discuss your specific needs and how we can assist you.