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The Aged Care legislation is changing, are you?

Written by Lauranne Beernaert, Sector Support Coordinator

An opportunity to determine who you are now, and who you will be in July 2023.

The Sector is still in the middle of a very serious COVID-19 crisis, and many providers are understandably (again) under intense pressure.

The Aged Care reforms are however well under way as many changes to the Aged Care legislation are either applicable or have been tabled in the Parliament for consideration. In this article, we invite you to take a moment to reflect on the big picture and what that means for your organisation and its future.

1. Aged Care and Other Legislation Amendment (Royal Commission Response No.1) Bill 2021

This Bill was passed in late June 2021 by both Houses. As a result, the Aged Care and Other Legislation Amendment (Royal Commission Response No. 1) Act 2021 (the Act) came into effect on 1 July 2021. This Act implements the first set of urgent recommendations by the Royal Commission:

ChangeDescriptionIn Practice
Establishment of stronger controls over the use of restrictive practices.New definition of ‘restrictive practice’ being any practice or intervention that has the effect of restricting the rights or freedom of movement of the care recipient.

To be used as a last resort.

For example:

  • review and amend Restrictive Practice policy.
  • train staff about new policy.
Conduct of assurance reviews of home care approved providers to ensure funding is used to deliver services to senior Australians.The scope of the review can include:

  • how the provider uses and charges for home care subsidies
  • structuration of financial accounting for services
  • nature and type of services
  • procedures and documentation

Providers may receive a notice to answer questions or give information/documents relevant to the subject matter.

Providers will be under a duty to provide all facilities and assistance for the exercise of this review.

Ensure you are in a position in which you are comfortable discussing and providing evidence about any element(s) of the assurance review:

  • pricing and accounting systems.
  • nature/type of services being provided.
  • communication with care recipients regarding their services.
  • procedures and documentation.
Abolishment of the requirement for the Aged Care Financing Authority (ACFA).Creation of a new advisory body for aged care financing issues.Nothing to do from the providers’ end.

2. Aged Care and Other Legislation Amendment (Royal Commission Response No.2) Bill 2021

This second Bill in response to the Royal Commission was introduced to the House of Representatives on 1 September 2021, and to the Senate on 22 November 2021. You can see its progress and the Explanatory Memorandum here.

The Bill would amend a total of 7 Acts, including the Aged Care Act 1997 and the Aged Care Quality and Safety Commission Act 2018.

Below is a summary of the key proposed changes:

ChangeDescriptionIn Practice
Introduction to new funding arrangements for residential aged care.The AN-ACC classification and funding model would replace the current ACFI tool from 1 October 2022.

The period between April 2021 to 30 September 2022 is called the Shadow Assessment Period. It prepares for the implementation of the AN-ACC model by completing AN-ACC assessments and assigning classifications for everyone living in an Australian Government funded residential aged care facility.

The basic care subsidy would entail:

  • a variable amount linked to a care recipient’s AN-ACC classification
  • a fixed amount linked to the characteristics of the residential aged care service where the person receives care
  • a one-off payment to cover costs related to transitioning into a new care environment will also be made.
Start communicating this change with staff:

When required to do so, providers need to enable the independent assessors to conduct assessments in their facility during the shadow assessment period.

Assessors will require access to:

  • areas within the facility that are used to provide care.
  • records relating to residents (including when stored on IT systems).
  • access to staff members and residents.
Establishment of an Aged Care Screening Database for aged care workers and governing persons.Providers will have to comply with nationally consistent screening requirements of workers (= employed staff, volunteers, contractors and sub-contractors) and governing persons (=persons with responsibility for executive decisions and/or with influence over the planning, directing and controlling of the organisation).

The Database will contain up-to-date information about screening applicants, their applications and various decisions made about them.

This will replace the existing police checks.

Inform staff and governing persons about this future requirement.

Review and amend HR policies and processes when the Database is introduced.

Provision of the Aged Care Quality and Safety Commissioner (the Commissioner) with the authority to make and enforce a Code of Conduct.Providers (aged care workforce and governing persons) will have to abide by a Code of Conduct.

Any breach of the Code of Conduct can lead to penalties and/or banning orders.

Inform staff and governing persons about the future introduction of the Code of Conduct and its application to approved providers.

Also mention the new powers of the Quality Commissioner to impose banning orders on workers and governing persons in case of breaches of the Code.

Extension of the Serious Incident Response Scheme (SIRS) to home and flexible care.There will be new responsibilities for providers to implement and maintain an incident management system and to report incidents to the Quality Commission.

The SIRS has two components: incident management obligations and reportable incident obligations. There are 8 different incidents that are considered reportable, which can be classified as Priority 1 or Priority 2 situations.

This will apply from 1 July 2022.

Review and amend Incidents policy.

Train staff about new policy.

Assessment regarding internal system’s suitability to implement the SIRS. If required, explore system upgrade.

Amendment and expansion of approved provider governance, with a focus on financial and prudential oversight.Approved providers will need to comply with requirements regarding membership of their governing bodies (there are exemptions to these requirements):

  • majority needs to be independent non-executive members
  • at least one member of the governing body has experience in clinical care

Establishment of a quality care advisory body.

Establishment of a consumer advisory body to give feedback to the organisation’s governing body if the care recipients or their representatives would like one set up.

Responsibility that staff have appropriate skills, qualifications, and experience to provide care/services, and given the opportunity to develop their capacity to provide these.

Provision of an Annual Statement (published on My Aged Care) that will include details of key personnel, attestations by the governing body, information on staffing, financial information, and complaints.

Conduct a review of current governing body and assess whether these new requirements are already met.

Establish the Quality Care Advisory Body when it is required.

Provide the opportunity, at least once every 12 months, to care recipients and their representatives to establish a body (the Consumer Advisory Body).

Assess whether you have visibility about your workforce: their skills, qualifications, experience, and where/how this information is recorded. Additionally, do you have a training calendar (or similar) to ensure that every staff member attends regular training and build their capacity?

Is there a need to implement a new system to record staff information, or to organise surveys to gather missing data?

Improvement of information sharing between Commonwealth bodies.Alignment of regulation across the care and support sector (aged care, disability, incl. NDIS and veterans’ care) in relation to non-compliance of providers and their workers to enhance transparency and accountability.Nothing to do from the provider’s end, this is expected to reduce the administrative burden on providers.
Use of refundable accommodation deposits and accommodation bondsThe Department of Health and the Quality Commission can request information or documents (specified in the Act) from an approved provider or borrower of a loan using a RAD or a bond, and to create an offence for a borrower who does not comply.Ensure you are in a position in which you are comfortable discussing and providing evidence about the following:

  • provider’s suitability to be a providers of aged care.
  • provider’s financial situation.
  • policies and procedures.
  • when applicable, the use of refundable accommodation deposits and bonds for a permitted purpose.
Expansion of the function of the Independent Hospital Pricing Authority (IHPA), which would be renamed as the Independent Health and Aged Care Pricing Authority (Independent Pricing Authority).The new aged care pricing and costing advice functions to the Independent Pricing Authority would include:

  • Provide advice to Commonwealth Ministers about methods for calculating amounts of subsidies and supplements
  • review data and conduct studies.

New governance arrangements to reflect the expanded role will also be implemented.

Nothing to do from the provider’s end.


This Bills Digest is a great read if you want to understand the Bill in detail, or you can also access this 10 pages Bill Summary from Catholic Health Australia.

What does that mean for home and community care providers?

  • While the details of the second Bill are still being discussed in Parliament, it is likely to be endorsed. Many changes will directly affect home and community providers (highlighted in blue), which means that providers should take some time to understand how they will apply to them. For example, are you able to meet the expanded provider governance arrangements outlined above? Do you have access to appropriate systems to comply with the new SIRS requirements?
  • This is only the beginning. We expect more legislative changes to be introduced in the future, especially in relation to the establishment of the new Support at Home program and the new Aged Care Act planned to come into effect on 1 July 2023. It provides a basis for reforms and cultural change with a focus on responding to the needs of older Australians.
  • The future aged care environment will be very different from today, especially for small service providers. With this in mind, we suggest that all Boards and executive teams take some time to respond to the questions: ‘Who is my organisation today?’, and ‘Who will my organisation be in July 2023?’, if you have not done it already. What needs to be done to get there?

In the next few months we will be organising a Round Table discussion ‘Managing System Reforms’ for CEOs during which the above questions will be explored. Make sure that you are subscribed to the e-bulletin so that you are informed about it and can secure a spot!