On 14 December 2023, the Department of Health and Aged Care (Department) released the Exposure Draft of the new Aged Care Act (New Act).
Continuing the momentum of significant reforms over the past year which have progressively positioned older people at the centre of heightened provider obligations, the New Act aims to create 'a simple, rights-based legal framework' and will bring a sharpened focus on the needs of care recipients. The reformed framework will be delivered as a principal act with a single set of supporting rules (Rules), which will incorporate the strengthened Aged Care Quality Standards (Quality Standards), published as a final draft on 14 December 2023 alongside the New Act.
We provide a high-level overview of the key features of the New Act below.
A rights-based legal framework
Following the recommendations of the Royal Commission into Aged Care Quality and Safety, the New Act is grounded upon a 'Statement of Rights', which models the expectations and rights of older people in accessing aged care services. These rights will be upheld and enforced within the new regulatory framework, and providers will have an obligation to demonstrate an understanding of the rights, and ensure that all services are delivered in a way which promote these ideals. The Statement of Rights will be complemented by a Statement of Principles, which similarly guides providers, the Department and regulators in their decision-making and actions under the New Act.
The New Act also provides a definition of 'high quality care', which details the holistic characteristics of services as aspirational standards for providers, as opposed to providing prescriptive minimums. Some providers will need implement a 'continuous improvement plan', to demonstrate how these characteristics are achieved in their service delivery. However, the definition does not carry a strict duty for providers but rather aims to create a 'mutual understanding' across the sector, and sits neatly with the strengthened Quality Standards to model how services should be delivered.
A 'step up' in the provision of care
The new Act places a non-delegable statutory duty on aged care providers to ensure they do not expose care recipients to harm during the delivery of services to the extent that is 'reasonably practicable.' Though Consultation Paper No 1 (Consultation Paper No 1), published in August 2023, originally proposed extending this duty to include aged care workers, the New Act has notably refined the obligation to the provider-level. The New Act has also brought further relief through confirmation that adverse effects on care recipients will only amount to a strict liability offence in circumstances where a provider has committed a substantial and 'serious failure', and will not be triggered by all departures from the duty.
The duty placed on providers is complemented by a separate statutory duty for responsible persons to exercise 'due diligence'. Though this responsibility mirrors the duty of officers under the Workplace Health and Safety legislation, the New Act has built on Consultation Paper No 1 to particularise reasonable steps which responsible persons should take in ensuring they are discharging the duty in the context of aged care services.
These statutory duties would be supported under the New Act by an enhanced penalty regime, which imposes heightened civil penalties for contraventions of the New Act, and introduces criminal and compensatory pathways to target ‘serious, poor quality and unsafe care'. Notably, the New Act introduces two new concepts – 'significant failures' and 'systemic patterns of conduct' – which both attract up to 500 penalty units.
A stronger regulator
Chapters 3, 5 and 6 of the New Act establish a stronger regulatory framework for the sector which aims to 'rebuild trust and confidence in the aged care sector'. The reformed regulatory posture reflects the cultural shift to a rights-based approach, with further expansion of the regulator to monitor, enforce and improve the human-centred delivery of funded aged care services, steered by the new Statement of Rights, Statement of Principles and high quality care.
The Aged Care Quality and Safety Commission (ACQSC) are given broader powers under the New Act to investigate and enforce legislative compliance, and will take an 'open door' approach to consumer experience through expanded complaints functions. The ACQSC will also be empowered to take more proactive, risk-based action against providers, in comparison to the current framework which limits its authority to certain circumstances.
The new framework prescribes several additions to the framework's current capacity, most notably a new power to enter premises without a warrant, and the expansion of banning orders to restrict providers, in addition to individuals, from providing aged care services. The Department has noted that they will continue to consider further powers over the first half of 2024, and have signalled possible inclusion of a power to appoint external management for providers who present immediate risks to older people.
A new system for registration of providers
The New Act proposes a universal system of registration, which will see providers grouped into one or more remodelled 'registration categories' based on the characteristics, risks and obligations of the provider. Though the specific requirements for registration of each category will be defined in further detail in the Rules, the general prerequisites for registration broadly mirror the requirements for NDIS provider registration. Registration will also be subject to specific provider conditions, such as workforce requirements, and will largely be made for a period of three years, though this can be varied, suspended or revoked at the discretion of the ACQSC.
The new categorisation will determine the allocation of funding to the provider, and help facilitate the introduction of the new Support at Home program, commencing in 2025. The New Act will require all registered providers to comply with 'core conditions', including alignment with the Aged Care Code of Conduct and worker screening requirements, to be included in the Rules. As well as complying with 'core conditions' of registration, under this new system, providers will also need to strictly comply with 'category-specific' conditions of registration, even where the services are delivered by subcontractors, which will see a stricter regime of regulation under the New Act as 'associated providers'.
Though the Department has advised that approved providers will be deemed into the new model and will not need to apply for registration in the first instance, the transitional arrangements of the deeming process will not be specified until sector engagement has been made early in 2024.
New payments and subsidies: person-centred and provider-based
In addition to the current home care subsidy, the New Act will introduce new fee arrangements and two new subsidies to the current funding model framework. Though the detail of these changes is yet to be drafted, awaiting advice from the Aged Care Taskforce, the Department has signalled that the new subsidies are expected to comprise:
- 'person-centred' funding – for the costs of servicing a specific person; and
- 'provider-based' funding– for fixed costs relating to a provider delivering aged services.
These additions reinforce the intention of the New Act to shift away from the current provider-focused framework, which currently partners subsidisation with the type of care, and move to a more humanistic basis better suited to accommodate individual needs of older people.
Whistleblower protections in the New Act
In aims to create a more transparent aged care system, the New Act defines the scope of protected information, and provides stricter arrangements for the management of information. Providers will also be subject to enhanced whistleblower protections, as detailed in Consultation Paper No 1, however the exposure draft has incorporated public feedback by further expanding the proposed protections by:
- significantly broadening the scope of 'whistleblowers' to include any person;
- removing the need to disclose in 'good faith'; and
- allowing whistleblowers to remain anonymous.
A new point of entry
The New Act proposes a new procedure for access to aged care services, with the introduction of clear eligibility requirements as a precondition, and funding approval conditional on assessment by an aged care needs assessor and the System Governor, who is tasked with broad oversight of the operation of the sector. Approved care recipients will be further classified based on the type and extent of care required, which will guide the level of funding and may be used to prioritise recipients in accessing services. Though the Department has noted there will be alternative points of entries, such as in cases of emergency, these have not been included in the current draft.
Next steps - public submissions are open until 16 February 2024
Alongside the New Act, the Department has released a Consultation Paper. Public submissions on the Exposure Draft are open until 16 February 2024, and contributions are able to be made through the Department of Health and Aged Care page. Given the magnitude of the proposed reforms, we expect that there will be a strong engagement by stakeholders in the human services sector during the consultation process. We encourage providers to take an active role in the reform journey, to ensure that the implementation of the New Act is suited to the experience and needs of the sector.
The next few years will be an exciting but increasingly complex legislative landscape for providers, with the new Support at Home Program, the findings of the Aged Care Taskforce and additional training requirements slated to operate alongside the New Act over the next year. Though the Department has reinforced its commitment to implement the new aged care system from 1 July 2024, the New Act will be introduced through a phased approach, with key features such as the Statement of Rights and new regulatory model prioritised in the roll-out. The Department intends to release a 'plan' at the beginning of 2024, which will provide greater clarity to the reform timeline and outline complementary support available for providers in adopting the changes.
We will continue to update you as the key changes of the reform develop and we would be very happy to discuss the New Act with you and what it means for your business.
