With the commencement of the new Aged Care Act 2024 (Cth) over the weekend (on 1 November 2025), Australia’s aged care system has shifted to a rights-based regime. The new Act is designed to encourage the delivery of higher quality aged care services and increase provider accountability.
The new framework introduces a new legally enforceable Statement of Rights for older people, resets how providers are registered and regulated, strengthens accountability of boards and executives, and hard‑wires a risk‑based approach to compliance and enforcement.
For owners, investors and operators, the implications are significant:
- provider registration is now category‑based and time‑limited
- quality standards are stronger and a graded approach has been adopted
- new (and stricter) financial and prudential standards require providers to maintain minimum liquidity levels and increase transparency
- enforcement risk following breaches of provider obligations will be heightened and directors and officers may face personal liability
- there will be an increased focus on transparency (including with requirements for the publication of information about performance and enforcement action). Reputational risk will be heightened if things go wrong.
Key changes at a glance
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What is changing?
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What does it mean?
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Introduction of a new Statement of Rights and Statement of Principles that are legally enforceable and apply to all government-funded aged care. Both Statements focus on person-centred care and require providers and regulators to put the safety, health, wellbeing and quality of life of aged care recipients first. |
Compliance will be assessed through audits and in the event of complaints. We expect there will be higher scrutiny of dignity, choice, supported decision‑making as well as closer monitoring of restrictive practices. |
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The Aged Care Quality and Safety Commission (the Commission) will continue to adopt a risk‑proportionate approach to the application of the regulatory framework to the sector, guided by the new Statements. |
Providers should understand the expectations of the Commission (set out in the Commission’s draft Regulatory Strategy) and expect increased focus on prioritising the rights and interests of aged care recipients. The Commission will publish information about provider performance and enforcement actions which have the potential to directly affect the provider's reputation. |
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The new Act provides the Commission with expanded powers, including the power to issue banning orders preventing the provision of care by current and former registered providers and associated providers, workers, and responsible persons. The Commission is also now empowered to enter and search residential aged care facilities without consent or a warrant where it considers there is an immediate and severe risk to the health, safety or wellbeing of residents. |
These powers raise the stakes for owners, operators, and investors. Proactive risk management, enhanced governance, and a strong compliance culture will be required to mitigate the risk of regulatory action and reputational harm. |
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New providers will need to apply for periodic registration based on the services provided (rather than the one‑off approval under the old system). Current providers will be transitioned to be a registered provider under the new Act through a deeming process. |
Providers will need to review and adjust business and care models depending on the services that are provided. Applications for registration of services will need to be made in appropriate categories. |
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There are now six different registration categories, ranging from home and community services to residential care. Strengthened Quality Standards apply to registration categories 4 (Personal and care support in the home or community), 5 (Nursing and transition care) and 6 (Residential care). |
Providers should map services precisely and apply for registration of categories of services that are provided. Applications to add or remove categories can be submitted if services expand or change. |
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The new Act clarifies the duties and suitability requirements of ‘responsible persons’. This change responds to severe governance failings identified by the Royal Commission into Aged Care Quality and Safety. Importantly, responsible persons may be subject to personal liability for serious breaches that result in death or serious injury. |
The Act imposes a new statutory duty on directors and others responsible for the executive decisions of aged care providers. This includes those who have authority or responsibility for (or significant influence over) planning, directing or controlling the activities of the provider. Boards must be able to demonstrate active oversight of quality, safety, workplace culture and resource management. |
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New financial and prudential standards apply (including minimum liquidity requirements). Providers will need to be more transparent about how they manage funding and performance, including how refundable deposits are managed. |
Providers should review and maintain quarterly minimum liquidity thresholds that are properly assessed against set criteria and expenses in the previous quarter. Liquidity management strategies will be required. There are also additional requirements for financial reporting, investment decisions and managing risk. |
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New means tested fees and everyday living fees have been introduced to simplify fee arrangements and focus on consumer protections. No new extra service fee or additional service fee arrangements can be entered into after 1 November 2025. |
While residents who were already receiving care or entered care before the new rules apply will continue to have their fees assessed under the existing system, providers will need to review and update their fee structures. A ‘no worse off principle’ will apply to existing aged care residents to ensure that they are not required to pay more under the new Act. There will be a stronger focus on making sure fees are fair and affordable. Incorrect charges may result in exposure to civil penalties. |
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The new Act clarifies the incidents that are reportable and the rules that apply to restrictive practices. The Serious Incident Response Scheme (SIRS) will keep operating under the new Act. |
Providers should review their SIRS processes to make sure they have clear consent, management and reporting procedures in relation to restrictive practices. Failing to report incidents or keep proper records may lead to serious civil penalties. |
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New rules establish clearer responsibilities for digital platform operations and information management, including requirements for data security and privacy. The Act grants expanded powers for information sharing between agencies and systems (subject to privacy safeguards). |
Providers should check that their data management systems are secure, and that they can connect with My Aged Care, the Commission and Services Australia systems. |
The new regulatory landscape
With the commencement of the new Act, Australia’s aged care sector has entered a new era defined by a rights-based approach, robust regulatory oversight, and heightened accountability for providers and leadership.
Many providers have already taken proactive steps to review and strengthen operations, governance structures and processes, and risk management frameworks to ensure they meet the new standards and expectations from day one. Providers who proactively embrace the changes will be well placed to minimise regulatory and reputational risk and capitalise on a more transparent, consumer-focused environment.
Providers whose preparations for the introduction of the new Act are not complete will need to act quickly to manage increased scrutiny and a focus on compliance and quality.
We anticipate the challenges associated with the introduction of the new Act will be offset by significant opportunity that will come with the delivery of safer and higher quality care.
Expect the spotlight to remain on the sector as Australia (and the rest of the world) grapples with delivering affordable, high quality care for an aging population.
