Aged Care Act Reform: How It Impacts Providers, Risks and Insurance

Australia’s aged care sector is undergoing its most significant legislative reform in decades. The Aged Care Act 2024, which commenced on 1 November 2025, introduces a new rights-based framework designed to strengthen the quality, safety, and accountability of aged care services.

For providers, the reforms introduce new legal duties, stronger governance expectations, and increased regulatory oversight. They also create new statutory obligations that may affect risk management, compliance, and business operations.

Understanding these changes is an important step in helping aged care providers prepare for the new regulatory environment.

What is the Aged Care Act 2024?

The Aged Care Act 2024 replaces Australia’s previous aged care legislative framework with a new rights-based system centred on older people receiving aged care services.

The Act establishes clearer responsibilities for providers while strengthening protections for older people receiving care. It also introduces new governance obligations, statutory duties, regulatory powers, and enforcement mechanisms designed to improve accountability across the aged care sector.

Why the reforms matter for aged care providers

The reforms extend beyond regulatory compliance. Providers are expected to demonstrate stronger governance, improved quality systems, effective risk management, and greater accountability throughout their organisations.

Two of the most significant reforms include:

• the introduction of Provider Duties
• the introduction of Responsible Person Duties

Understanding the new statutory duties

Provider Duty

The Provider Duty establishes legal obligations requiring registered providers to deliver funded aged care services in accordance with the requirements of the new Act.

Providers are expected to operate appropriate governance systems, manage risks effectively, and deliver services that support the rights, safety, and wellbeing of older people.

Responsible Person Duty

The Responsible Person Duty places direct obligations on individuals responsible for governing or managing aged care providers.

Directors, executives, and other responsible persons are expected to exercise appropriate oversight, promote compliance, and support effective governance within their organisations.

Key risk implications of the new statutory duties

The new framework creates several important risk considerations for providers.

Stricter accountability:

The reforms place greater emphasis on organisational governance and individual accountability.

Providers are expected to demonstrate that appropriate systems, policies, and oversight arrangements are operating effectively.

Increased penalties

The Act introduces stronger enforcement powers, including increased civil penalties and, in some circumstances, criminal offences for serious breaches of statutory duties.

Individual responsibility

Senior leaders, directors, and responsible persons now have greater personal accountability for governance and compliance.

Key implications for aged care providers

The new legislation is likely to affect multiple areas of provider operations.

Organisations may need to review:

• governance arrangements
• compliance frameworks
• clinical governance systems
• contractor oversight
• incident management processes
• staff training
• documentation practices
• risk management procedures

Providers that already maintain strong governance and compliance systems may be better positioned to respond to the new obligations.

Practical steps for providers

Review governance and duty structures: Assess board responsibilities, governance arrangements, and decision-making processes to ensure they align with the new statutory duties.

Review contractor arrangements: Where services are delivered by contractors or third-party providers, review contracts, responsibilities, and oversight arrangements to ensure accountability is clearly documented.

Strengthen compliance processes: Review policies, procedures, reporting systems, and staff training to help ensure ongoing compliance with the new regulatory framework.

Review your insurance: As legal responsibilities evolve, providers may also wish to review their insurance arrangements as part of their broader risk management strategy.

Prepare your aged care organisation with confidence

The Aged Care Act 2024 introduces new responsibilities for providers, making effective risk management more important than ever.

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