What Australian Brokers Should Know About the New Aged Care Act 16th September 2025 PROBITAS PACIFIC Change Is Coming The aged care sector is undergoing its most significant reform in years, with sweeping changes to how government-funded Residential Aged Care and Support at Home Care are regulated in Australia. Following multiple inquiries, governments have acknowledged that the balance between self-regulation and government oversight has failed. Not all providers within the government-funded care system have the capacity or willingness to meet the standards expected by today’s society. A recent example is the childcare sector, where complacency among some providers and regulators led to substandard care and safety. The Aged Care Sector Driven by the findings of the Royal Commission into Aged Care Quality and Safety, the Department of Health and Aged Care recognised the need for change. The current system fails to meet the expectations of both current and future users. The shift will be from a needs-based clinical model to a person-centred approach, where high-quality clinical care is a baseline expectation not a goal. The new model empowers recipients to have more control over their care, recognising their rights and individuality. Providers must move beyond institutional care models and prioritise the preferences and dignity of an individual. Implementing Change On 1 November 2025, the Aged Care Act 2024 (Cth) will come into effect. At its core is the Statement of Rights for Older People, which affirms the right to: Make decisions about their own life Have those decisions respected Receive information and support to make informed choices Feel safe and respected Have their culture and identity honoured Stay connected with their community The strengthened Aged Care Standards now align more closely with person-centred care while maintaining a strong focus on clinical quality. The changes are summarised below: OLD STANDARD Consumer dignity and choice Feedback and Complaints Organisational Governance Human Resources Services and Support for daily living Organisation’s Service environment Personal Care and Clinical Care Ongoing assessment and planning with consumers NEW STANDARD The Individual Food and Nutrition The Organisation Residential Community Care and Services The Environment Clinical Care If your client is already compliant, the transition should be smooth. However, all providers must embed person-centred care into every aspect of service delivery. Responsible Persons Originally, the Act proposed strict liability and criminal negligence for providers failing to prevent harm. This has evolved into a framework of significant accountability. The Act introduces the concept of Responsible Persons individuals with substantial influence over a provider’s operations, including board members, executives, registered nurses, and operational managers. These individuals must: Exercise due diligence Be proactive in preventing harm Promote a culture of safety Associated Providers The Act introduces Associated Providers entities delivering services on behalf of registered providers (e.g., contractors, allied health workers, cleaners). Registered Providers are now legally liable for harm caused by Associated Providers. Providers cannot contract out of this imposed responsibility / liability. What Should Your Clients Be Doing? Register with the Aged Care Quality and Safety Commission Prepare for new financial and prudential standards Align internal practices with the Statement of Rights and Quality Standards Record health status and individual needs of each resident Educate staff on new obligations and regulations Adopt NDIS Worker Checks (mandatory from 2026) Maintain robust documentation to demonstrate compliance Update complaints and whistleblower procedures Verify staff qualifications and experience Review each resident’s risk profile and prevention measures Ensure restrictive practices are compliant and approved Keep a register of Associated Providers Review incident reporting procedures and notify insurers promptly Table incidents and near misses at board meetings Ensure advisory bodies have diverse and executive representation Ensure governing bodies have a majority of independent non-executive members Regulatory Response to Non-Compliance Initially, the government proposed criminal penalties for neglect that led to serious harm, this has been softened to fines the sum of a fines will reflect the seriousness of harm caused with a view to ensuring a safer care environment. The regulator will take a proportionate approach in the short term, working with providers willing to remedy issues. Long-term enforcement is expected to be less tolerant. Penalties include: Banning orders Infringement notices Notices requiring action Penalty units based on severity of harm and preventability Maximum fines: $165,000 for Responsible Persons $1.5 million for companies Compensation The Act introduces a statutory duty of care, if a registered provider exposes a resident or client to serious injury, death or illness because of a failure or the injury, death or illness is caused by a systematic pattern or conduct, the injury party or the Aged Care Quality and Safety Commission can apply to the Federal Court or the Federal Circuit and Family Court for an order for compensation. The introduction of this statutory duty is not intended to replace existing compensation arrangements and current pathways to compensation can still be exercised as a stand- alone measure or in addition to compensation under the new act however an injured party cannot double dip. Implications for Insurers and Brokers The Act strengthens the Commissioner’s powers to hold providers accountable. This will influence common law claims, especially where statutory breaches are evident. Courts will need to balance residents’ rights to autonomy with the risks those choices may present. Most providers are preparing proactively. A few may adopt a “wait and see” approach but the time to act is now. Why your Insurer matters? As the aged care sector navigates the evolving regulatory landscape, it’s never been more important for brokers to partner with insurers who understand the unique risks and challenges of the industry. With our deep sector expertise and market-leading coverage, we’re proud to support aged care providers with tailored solutions that meet both current compliance requirements and emerging demands. Trust the team that knows aged care we’re here to help you protect what matters most. Is your client ready for 1 November 2025?