The Aged Care Bill 2024 (Cth) (Bill) was introduced into the House of Representatives in September 2024 following extensive public consultation on the Exposure Draft to the Aged Care Bill 2023 (Exposure Draft). Once passed by the Senate, the new Bill is set to be enacted and take effect on 1 July 2025 (new Act). Initially introduced in the Exposure Draft, the new Bill establishes two new statutory duties:

1. A registered provider duty to ensure their conduct does not cause adverse effects to health and safety of individuals in their care.
2. Duty for certain ‘responsible persons’ to exercise due diligence to ensure the registered provider complies with the provider’s duty.

Key changes for aged care providers

Following significant concern from the sector during the Exposure Draft consultation period, the statutory duties have been amended.

• The duties are no longer strict liability offences (that is, offences that do not require proof of fault).
• Criminal sanctions for a breach of the duties have been removed. Civil penalties and a new compensatory pathway remain in the drafting.
• It appears the scope of a 'responsible person’ for the purpose of the duty has been reduced. Those who work in day-to-day operation roles will not be caught. However, the position is not clear.
• The amendments introduce a ‘reversal’ of the burden of proof for statutory duties, meaning the party bringing the action now bears the burden to prove that the conduct, on the balance of probabilities, was engaged in without a ‘reasonable excuse’.

Application of the duties

Registered provider duty

Registered providers must ensure ‘as far as is reasonably practicable’, that their conduct does not cause adverse effects to the health and safety of individuals to whom they are delivering funded aged care services.

The Bill broadly mirrors the Work Health and Safety Act 2011 (Cth) legislation's definition of ‘reasonably practicable’ in the context of the registered provider duty and sets out a number of factors that must be considered in determining whether the duty has been complied with. These include:

• the likelihood of the adverse effect concerned occurring;
• the likely degree of harm that might result from the adverse event;
• what the person concerned knows, or ought to have known, about ways of preventing the adverse event; and
• the availability and suitability of ways to prevent the risk.

Importantly, the Bill also introduces a requirement to consider the rights of individuals as outlined in the Statement of Rights, indicating the duty is not absolute. For example, an individual’s right to preserve social connections, even if such interactions involve certain risks, may be a key consideration when evaluating what is ‘reasonably practicable’. Nevertheless, providers still need to ensure all reasonably practicable steps are taken to minimise those risks whilst upholding the individual’s rights and autonomy, balancing safety with personal choice.

Duty for responsible persons

Under the Bill, certain responsible persons are required to exercise due diligence to ensure the registered provider complies with its duty.

While ‘responsible persons' is a new term in the Bill, it largely replicates the current definition of 'key personnel’ and ‘governing person’. As currently drafted, the responsible persons duty will apply to:

• persons who are responsible for making executive decisions for a registered provider;
• any other person who has authority, responsibility or significant influence over planning, directing or
• controlling the activities of the provider; and
• any registered nurse responsible for overall management of the nursing services of a registered provider or at an approved residential care home.

Of note, the duty now seeks to exclude those responsible persons who are otherwise ‘responsible for the day-to-day operations of the registered provider’. The Explanatory Memorandum notes ‘it is not the Government's intention to impact suitably qualified individuals from taking on and working in important roles in aged care out of fear of liability of the responsible person duty’. Further, the duty is only intended to capture persons who hold ‘critical roles and have the potential to influence the culture and accountability of the registered provider’.

We understand there is some ambiguity across the sector in relation to the proposed exemption of certain responsible persons from the duty.

Key impacts on registered providers

Registered providers must take 'all reasonable steps' to prevent harm to the individuals to whom they are delivering services. This may involve implementing safety protocols, providing training to staff, and regularly reviewing and updating their practices to ensure they are delivering safe and quality care.

• Registered providers should ensure any responsible persons are informed about their obligations under the new Act, understand the services being delivered by the provider and the potential risks associated with those services, and confirm that the provider has the necessary resources and processes in place to manage those risks.
• Responsible persons must ensure that the provider has processes for receiving and considering information about incidents and risks, and for responding to that information in a timely manner.
• Responsible persons can be personally liable for a civil penalty for failing to exercise due diligence even if the registered provider has not breached its statutory duty. This means that responsible persons have a clear incentive to ensure the provider is complying with its duties under the new Act, as neglecting to do so may result in financial penalties.

Compensation pathways

Where a registered provider engages in conduct which:

• constitutes a serious failure or
• results in death or serious injury or illness to an individual to whom the provider is delivering funded aged care services due to a breach of the registered provider’s duty.

Either the Aged Care Quality and Safety Commission or the affected individual may apply to the Federal Court or the Federal Circuit and Family Court of Australia for an order for compensation.

Conduct of a registered provider amounts to a serious failure if it exposes the individual to a risk of death or serious injury or illness and involves a significant failure or is part of a systematic pattern of conduct.

The compensation pathway is not intended to replace existing compensation arrangements for personal injury. That is, individuals who suffer harm may be permitted to bring actions for both compensation for personal injury and compensation under the new Act, however they will not be entitled to ‘double dip’. 

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Our experienced Aged Care Team is here to assist you through these sector reforms. We are working closely with our clients to tailor solutions for their circumstances, as well as developing package offerings. We would be delighted to find out how we can help your organisation.