New duties for board members of aged care providers – what you need to know

The Aged Care Act 2024 (Cth) takes effect from 1 July 2025, implementing around sixty recommendations from the Royal Commission into Aged Care Quality and Safety. Significantly, it introduces duties that apply to aged care providers and their responsible persons. This article provides an overview of those duties and their implications for the governance of registered providers of aged care services.

The new Aged Care Act

On 1 July 2025, the Aged Care Act 2024 (Cth) (New Aged Care Act) will take effect and replace the Aged Care Act 1997 (Cth) as the principal legislation that governs registered providers of aged care services in Australia. This will affect registered providers of aged care services and their responsible persons.

Who are “registered providers” and “responsible persons”?

“Registered providers” are organisations that are approved to provide funded age care services by the Aged Care Quality and Safety Commission. The term “registered providers” replaces the term “approved providers” under the current Aged Care Act.

“Responsible persons” include the members of a registered provider’s governing body (such as its board members), being persons who are responsible for executive decisions. This also includes individuals who have authority or responsibility for planning, directing or controlling a registered provider’s activities.

What are the statutory duties?

The New Aged Care Act establishes the following duties for registered providers and their responsible persons.

• Registered provider duty: “A registered provider must ensure, so far as is reasonably practicable, that the conduct of the provider does not cause adverse effects to the health and safety of individuals to whom the provider is delivering funded aged care services while the provider is delivering those services.”¹ The New Aged Care Act elaborates on what it means to take “reasonably practicable” measures to comply with this duty and imposes civil penalties on registered providers that fail to comply with this duty.
• Responsible person duty: Responsible persons must exercise due diligence to ensure that registered providers comply with their duty. Exercising “due diligence” includes taking reasonable steps:
  • to acquire and maintain knowledge of requirements applying to registered providers under the New Aged Care Act;
  • to gain an understanding of the nature of the funded aged care services the registered provider delivers and the potential adverse effects that can result to individuals when delivering those services;
  • to ensure that the registered provider has available for use, and uses, appropriate resources and processes to manage adverse effects to the health and safety of individuals accessing funded aged care services delivered by the provider;
  • to ensure that the registered provider has appropriate processes for receiving and considering information regarding incidents and risks and responding in a timely way to that information; and
  • to ensure that the registered provider has, and implements, processes for complying with any duty or requirement of the registered provider under the New Aged Care Act.

Practical implications for board members

Once the New Aged Care Act takes effect, responsible persons will be personally exposed to a civil penalty of up to 150 penalty units if they:

• without reasonable excuse, engage in conduct that does not comply with the duty; and
• their conduct amounts to a serious failure to comply with their duty, in that it:
  • exposes an individual to a risk of death or serious injury or illness; and
  • involves a significant failure or is part of a systematic pattern² of conduct.³

A “significant failure” includes a significant departure from the conduct reasonably expected of responsible persons.

Responsible persons will also be personally exposed to a civil penalty of up to 500 penalty units if there is a serious failure to comply with their duty and their conduct results in the death of, serious injury to or illness of an individual.⁴

Taking “reasonable steps” to exercise due diligence (as described above) will assist to demonstrate compliance with the responsible person duty. Having regard to those “reasonable steps”, it will be prudent for responsible persons to:

• ensure they have and maintain an understanding of both the aged care sector (including the regulatory requirements that apply to the sector) and the registered provider’s services; and
• ensure that their registered provider:
  • not only has adequate resources to manage health and safety risks, but uses those resources to that effect;
  • has appropriate risk management and incident reporting processes that ensure the registered provider receives, considers and responds to information regarding incidents and risks; and
  • not only has, but implements policies and procedures for protecting the health and safety of individuals; and
• monitors compliance with its policies and procedures and updates those documents as needed over time.

This reflects a shift in board culture, referred to in the findings of the Royal Commission into Aged Care Quality and Safety, that requires responsible persons to: have closer oversight of their registered provider⁵; ensure that there is a feedback loop between responsible persons and management via a ‘quality care advisory body⁶’ and ensure that policies and procedures are not only developed, but actively implemented and embedded in the operations of their registered provider.

How we can help

Our charity and not-for-profit team helps organisations from the ground up, from the establishment process to guiding board members through their legal duties. Moores can assist to ensure your board members understand their duties and have appropriate processes in place to support compliance.

Further reading

The Aged Care Bill 2024 (Cth) is available on the Parliament of Australia website.

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_{Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to you or your organisation.}

1. Section 179(1) of the New Aged Care Act. ↩︎
2. Sections 180(4)-(5) of the New Aged Care Act. This equates to a maximum civil penalty of $49,500. ↩︎
3. When determining whether the conduct of a registered provider or responsible person is part of a “systematic pattern of conduct”, regard must be had to the following (under section 19(2) of the New Aged Care Act): (a) the number of times the provider’s or responsible person’s conduct has not complied with a provision of this Act (the relevant contraventions); (b) the period over which the relevant contraventions occurred; (c) the number of individuals affected by the relevant contraventions; (d) the provider’s or responsible person’s response, or failure to respond, to any complaints about the relevant contraventions. ↩︎
4. Section 180(6) of the New Aged Care Act. This equates to a maximum civil penalty of $165,000. ↩︎
5. Recommendation 88 and 90 of the Aged Care Quality and Safety Royal Commission Final Report. ↩︎
6. Recommendation 90 of the Aged Care Quality and Safety Royal Commission Final Report. ↩︎