Transition to the new aged care act

The transition to the new Aged Care Act marks a fundamental shift – ensuring better quality care, greater transparency, and stronger accountability for aged care providers across Australia.

The New Aged Care Act in Australia takes effect from 1 July 2025 and represents a significant step in the reform of aged care services. The transition represents a fundamental shift in how the aged care system operates, aiming to provide better quality care, greater transparency, and more accountability.

Background:

In response to the findings of the Royal Commission into Aged Care Quality and Safety, the Australian government has introduced reforms intended to reshape the aged care sector.

The reforms focus on improving:

Care quality and safety.

• Financial transparency and accountability.
• Governance and regulatory oversight.

The new Act aims to establish a more responsive, transparent, and efficient system. The shift is also designed to make the aged care sector more consumer-focused, ensuring that services are aligned with the needs and preferences of older Australians.

Key Aspects of the Transition:

New Standards and Regulatory Framework

One of the most significant changes under the new Aged Care Act is the introduction of updated Aged Care Quality Standards. These standards focus on the safety, dignity, and rights of older Australians, providing clearer guidelines for providers on how to deliver high-quality care. The Aged Care Quality and Safety Commission (ACQSC) plays a central role in overseeing the implementation of these standards.

Financial and Governance Changes

Financial accountability is a cornerstone of the reform process. The government is introducing more stringent requirements for aged care providers to report on how funding is being used.

These changes will include:

• Stronger financial reporting requirements: Providers will be required to submit detailed financial statements, showing how funds are being allocated to care and operational needs.
• Auditing and compliance: There will be an increased role for external audits and compliance checks to ensure that aged care providers are following proper governance practices.
• Incentives for efficiency: Aged care providers who can demonstrate financial responsibility and efficient use of resources may be eligible for additional funding or grants to improve care services.

Person-Centred Care

One of the key features of the transition is the shift toward a tailored person-centred care model, which emphasizes treating each resident as an individual with unique preferences and care needs.

Workforce Reform and Development

Aged care workers are central to the success of the reform process. Aged care workers have the most contact with people receiving care. Their behaviour must always help the people they provide care for feel safe and supported. Paged care providers must support, equip, and prepare aged care workers to comply with the Code.

Improved Protection and Complaints Mechanisms

The new Aged Care Act also emphasises stronger protections for aged care residents, ensuring they have avenues to voice concerns and seek redress when they are dissatisfied with the care they receive.

Digital Transformation and Data Use

The aged care sector is embracing digital tools and data to improve service delivery and outcomes for residents. As part of the transition to the new Aged Care Act, providers will be encouraged to adopt digital care management systems and data-driven approaches.

Challenges in the Transition:

While the reforms represent a much-needed overhaul of the aged care system, the transition to the new Aged Care Act is not without challenges:

• Funding and resource allocation: The cost of implementing the new standards and regulations may be significant, especially for smaller providers. Stringent financial monitoring to adequate funding and support is critical to avoid disruptions to care services.
• Workforce training and retention: The transition requires the support of a skilled and experienced workforce. The aged care sector has struggled with workforce shortages. Developing effective training programs and addressing workforce capacity issues will be vital for long term success.
• Adaptation to new systems: Providers will need to adapt to new reporting systems, care models, and governance frameworks, which could pose challenges, particularly for smaller or less technologically advanced facilities.

The transition to the new Aged Care Act in Australia is a complex and transformative process. It involves significant changes across the sector, from financial reporting and governance, to care quality standards and workforce development.

Your local PKF team can assist navigating this transition with careful planning, collaboration, and a focus on your individual circumstances to ensure that you emerge stronger and more resilient.