The new Aged Care Act, passed by Parliament in November 2024, has launched a generational change in Australia’s aged care sector. From 1st November 2025, the new Act introduces increased regulatory requirements, a rights-based framework, enhanced national quality standards, and increased civil penalties for the provider as well as for individuals employed by the provider.
The new Statement of Rights for people receiving aged care services articulates the expectation that providers will prioritise the needs of the service user over the needs of the provider. While previously the aged care system has been organised to facilitate care provision through a regulatory framework focussed on the provider, services will now be delivered with greater attention to the individual outcomes of each service user. This change is the catalyst for a significant shift in the way organisations deliver services.
The implementation of the Act has already been delayed due to the complexity of the changes and the need for providers to adapt to the new requirements, with the implementation of the Act through the Commonwealth Home Support Program not expected until 2027. In the meantime, most providers have been working hard to be ready for the 1st November deadline.
The implementation of the new Act is not without risks. Balancing the rights of the individual with the reasonable capacity of an organisation to attend to each individual’s preferences may be a challenge. Balancing the dignity of risk regarding individual’s choices with the potential organisational liability regarding duty of care may be a challenge. Balancing the government’s funding regime with the expectation of quality, individualised care may be a challenge. Balancing the potential for civil penalties with the ability to find volunteers and staff willing to live with that risk may be a challenge.
Ensuring the long-term sustainability of providers in this new environment requires a holistic assessment of all aspects of the organisation. Recently, my colleague Christine Davis of Synerge and I developed a framework for assessing the strategic viability of aged care providers. The diagram below summarises the elements of the framework, with the ultimate goal of ensuring that aged care service users will thrive while aged care providers can sustain quality businesses.
Our assessment process includes a range of qualitative, quantitative and financial measures along the five elements shown above, providing services with a comprehensive view of current status and future improvements to address the requirements of the new Act.
Risk mitigation is critical for organisations during such a substantial sector transition. Organisations that can identify risks and proactively manage emerging risks will be better prepared when threats do emerge and are more likely to survive those threats. Regulators and insurers, as well as the public, will be watching to see how organisations can demonstrate that they are strengthening their internal systems to ensure the safety and wellbeing of the individuals accessing their services. It is worth noting that a risk management system is a requirement of the new quality standards, and that the requirements of governing bodies are stated more explicitly in the new form of the quality standards.
Governing bodies will need to ensure they are well informed regarding the new standards, that they are assessing risk regularly, and that they have strong mechanisms for engaging with service users in consultation, collaborative decision-making, and co-design. They will also need to ensure that they are attentive to the new financial and regulatory requirements, and that they are proactive in overseeing the financial health of the organisation in order to sustain itself for the benefit of its clients.
The new Act seeks to “empower and improve the lives of older people accessing aged care services”, to create an aged care system that is suitable into the future supported by a robust regulatory framework, to enhance the choice and control of older people and to ensure the highest possible quality of care for individuals accessing aged care services. It is an ambitious agenda and, if realised, will benefit all of us by providing confidence that as we age we will be able to access safe, reliable and quality services that promote wellbeing to the very end of life.
Is your organisation ready?
To learn more about the Stillpoint Synerge strategic viability framework, contact Linda Kurti on 0412 040 217 or Christine Davis on 0404 009 775.