Understanding the Aged Care Act 2024: Key Changes and Implications

How the Aged Care Act Will Affect Providers in 2025

On the 25th of November, 2024, the Australian Government passed the new Aged Care Bill. The new Aged Care Act is set to come into effect on the 1st of July 2025 and aims to improve how services are delivered to older people in their homes, community settings and approved residential aged care homes.

This guide will break down some of the key changes outlined in the Aged Care Act 2024. We’ll explore the implications for both care providers and recipients and detail how aged care services can prepare for the upcoming changes.

Why the new Aged Care Act is important

Findings from the Royal Commission’s report on Aged Care Quality and Safety found that the current Aged Care Act is no longer fit for purpose. The report, released in March 2021, provided a number of recommendations to help improve Australia’s aged care system, including the development of a new rights-based Aged Care Act.

The new Act will:

• Establish a straightforward, single-entry system to improve access to aged care for older Australians.
• Implement a fair and culturally inclusive assessment process.
• Introduce guidelines for supported decision-making to enhance choice and control for older people.
• Strengthen protections for whistleblowers to encourage reporting without fear of retaliation.
• Develop a new regulatory framework to ensure the safe and high-quality delivery of aged care services.
• Expand the powers of the Aged Care Quality and Safety Commission to manage risks, uphold integrity and support the sector.

Key changes in the new Aged Care Act

The new Act responds to roughly 60 recommendations from the Royal Commission. Ultimately, the new Act aims to strengthen Australia’s aged care system, ensuring older people have better access to safe care. Besides changing the way aged care services are delivered to clients, it includes new laws to ensure aged care is safe, people are treated with respect and can enjoy improved quality of life.

Here’s a quick overview of some of the main changes in the new Aged Care Act.

Stronger regulatory oversight

The new aged care system includes increased compliance requirements with harsher penalties for non-compliance. Moving forward, aged care providers will be required to register with the Aged Care Quality and Safety Commission (Commission) before they can deliver aged care services. Care providers must meet new Aged Care Quality Standards that ensure their services are safe, high-quality and meets the needs of the older person.

By taking a rights-based approach, the new Act includes a Statement of Rights for older people, encompassing key rights like independence, autonomy and respect for privacy. Providers operate in line with the Statement of Rights and Principles set out in the new Act and implement effective practices to uphold these standards.

To ensure safety in aged care settings, there will be greater protections for whistleblowers, with the new aged care rules extending the range of issues that can be reported on.

New funding model

As part of the changes, the Australian Government introduced a new aged care funding model. Under the new Act, older adults will need to make means-tested contributions toward their non-clinical care. Additional hardship provisions will be available for those with limited financial resources.

New assurance reviews will be conducted to ensure home care providers use government funding appropriately to deliver services to older Australians.

Under the new funding approach, the Aged Care Financing Authority will be disbanded, with a new advisory body established in its place. Moving forward, the new Independent Health and Aged Care Pricing Authority will oversee aged care financing.

Workforce and staffing requirements

The new Statement of Rights will also detail what older people can expect from their aged care providers and support workers. In short, older individuals receiving care will have the right to services provided by aged care workers with the relevant qualifications, skills and experience.

Further, there must be a registered nurse on-site and on duty 24/7 in every residential aged care home.

Stronger consumer rights and transparency

Under the new Act, older individuals can appoint one or more trusted individuals to support them in decision-making. These designated ‘supporters’ have a clear responsibility to uphold and respect the person’s ability to make their own choices.

The new Act also includes provisions for greater accountability in service delivery, streamlined complaint resolution and clearer rights for aged care recipients.

A minister-appointed Independent Complaints Commissioner will enhance the transparency, accountability and impartiality of the complaints process within the Aged Care Quality and Safety Commission.

How these changes will impact aged care providers

While these changes will impact aged care services for recipients and their families, the new Act entails a number of changes for providers.

Operational adjustments

The new regulations will require providers to adapt their operational practices to comply with stricter rules. As such, providers will need to implement robust systems to ensure they meet the standards set out in the Aged Care Act, including compliance with the Statement of Rights and Principles.

Workforce management challenges

The Act requires aged care workers to possess relevant qualifications, skills and experience. Providers must ensure they meet these staffing requirements, potentially requiring increased hiring, recruitment and retention efforts. There will likely be additional costs for training programs to ensure workers meet the new qualification standards, especially for new hires or current staff upgrading their skills. Maintaining adequate staffing levels and ensuring qualified workers are on duty at all times will also be a key focus for residential aged care providers.

Financial considerations

With the introduction of new funding models and means-tested contributions for care, aged care providers will need to adjust their financial systems. Providers will have to manage new funding arrangements and report on how government funds are being used for services. The introduction of an Independent Health and Aged Care Pricing Authority means providers must adjust to new pricing guidelines and financial oversight, impacting pricing and budgeting processes.

Service delivery enhancements

The Act emphasises the delivery of safe, high-quality and person-centred care. Providers will need to focus on continuously improving care standards and service delivery, aligning operations with best practices and resident expectations.

Preparing for the new Aged Care Act as a provider

As a provider, the new Aged Care Act includes a number of updates and changes that will impact your business operations and legal obligations. With this in mind, it’s important to start implementing changes now before the Act comes into effect later this year.

Here are a few tips to help you prepare for the upcoming changes:

• Perform compliance audits.
• Invest in staff training and development.
• Evaluate financial plans and funding strategies.
• Adopt technology solutions for record-keeping and reporting.

The Department of Health and Aged Care established the Aged Care Transition Taskforce to support the sector in adapting to the new Act. The Taskforce will collaborate with the sector to identify and address challenges while providing recommendations to the government.

Now is the time to start familiarising yourself with the new Act and how it will impact your current operations. To learn more about the Aged Care Act, please refer to the Aged Care Quality and Safety Commission’s website.

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