The new Aged Care Act offers a rare opportunity to simplify and streamline your technology, financial systems and HR processes, so your organisation can continue to give older Australians the respect and quality of life they deserve.
The new Aged Care Act is expected to start in November 2025, in response to the findings of the Royal Commission into Aged Care Quality and Safety.
This isn't just another policy tweak, it's a once-in-a-generation overhaul of the legislation that governs the sector, significantly changing the way aged care services are delivered and funded in Australia.
The reforms will impact everyone who accesses or delivers aged care, either at an aged care residence or through the new Support at Home program.
As an aged care provider, you'll be faced with a number of significant compliance changes, including new conditions on registration, strengthened quality standards, and a duty to make sure your organisation's actions are guided by the new Statement of Rights, which outlines the rights that older people have when accessing aged care services in Australia.
Underpinning all of this, is a foundational shift in the way you'll need to approach your technology investments, review and monitor financial sustainability and liquidity, and manage and report on people-related compliance metrics.
As your organisation prepares for the upcoming reforms, here are a few priorities to keep in mind.
The fragmentation of your back office can limit the efficiency and scale you're looking to achieve through acquisitions.
Operating in the 'for purpose' sector means that aged care organisations often face some level of guilt around investing strategically in technology and back-office functions, based on the notion that funds are better spent on projects with direct client-facing benefits.
Whilst understandable, this short-term thinking can create a fragmented system where teams are managing information in separate tools.
The result? Duplicated effort, inconsistent or error-prone records, and heavy costs associated with stitching data back together manually (a hidden cost that's often under-reported in the P&L).
At a time where market consolidation is expected to accelerate, the fragmentation of your back office can limit the efficiency and scale you're looking to achieve through acquisitions.
The changes provide a rare opportunity for your organisation to streamline and simplify your technology stack, giving you a single source of truth for data that's held safely and securely on one integrated, ‘interoperable’ platform.
Gartner refers to this as a composable approach, which can not only reduce IT complexity and cost, but also offer client-facing benefits — perhaps reducing some of that guilt.
For example, it will give your teams better visibility on metrics that will help your organisation stay compliant with the Act, and ensure everyone is making informed decisions at speed and scale.
It will also ensure your organisation has the technical capabilities to provide a better experience to clients, which will become even more vital as the reforms open up more opportunities to provide value, and remain person-centred.
Finance teams will need to move away from transactional processing and reconciliations, and focus more on financial planning and analysis.
As part of the new Act, the Australian Government is capping management fees at 10% and requiring aged care providers to comply with a co-contribution model of funding, based on the client's capacity to pay.
There’s also new financial and prudential standards, which can lead to more funds being tied up on the balance sheet to comply with risk management practices.
Whilst the goal is to make sure aged care providers are financially stable and sustainable, it means further compressed operating margins and potentially less liquid funds to invest in much needed capital investment, like refurbishments.
It also raises other big decisions about how your organisation will operate. For example, how will your debtor risk and collection processes change when working with clients directly, instead of interacting solely with Government-funded agencies? What aggregated financial impact, across which service types, is deemed acceptable?
Decisions like this can only be made with accurate and real-time data on a broader range of dimensions — such as outstanding balances, clients, and co-contribution status' — as well as visibility of the impact of different financial decisions on your organisation and clients.
This means finance teams will need to move away from transactional processing and reconciliations, and focus more on financial planning and analysis (FP&A).
AI can be a powerful lever here, but it requires an improved level of digital literacy within the finance function. Technology is now inextricably linked to finance and critical to unlocking efficiency in your team (particularly given the aging workforce and shortage of new talent entering the accounting field in Australia).
By using scenario-planning tools to interrogate data and surface insights, finance teams can focus on building an 'investable' business — understanding the financial sustainability of different service categories through enriched reporting, grounded in operational metrics.
It can also help them share financial information in a way that's accessible to executive leadership teams when making commercial decisions.
Complying with these new requirements is going to be a heavy lift for many aged care providers, particularly given the complexity of their workforce.
One of the biggest changes to the Act is how care minutes are reported. For example, providers will be required to report on the duties performed by registered and enrolled nurses, as well as personal care workers, rather than what their title is or what they may be scheduled to do.
Workers must also comply with revised screening and training arrangements, and have the appropriate qualifications, skills and experience for the duties they are performing.
Complying with these new requirements is going to be a heavy lift for many aged care providers, particularly given the complexity of their workforce — spanning employees, contractors, agency staff and volunteers.
This makes it vital for CHROs to have a clear understanding of who their workforce is and the levers they have available to optimise their ratios and employee mix. Unfortunately, with many providers relying on legacy payroll or scheduling solutions, they often have a limited view of key workforce metrics.
Having a single source of truth for the skills, experience and qualifications available in your workforce, as well as a real-time view of compliance and scheduling, is going to be critical.
It's also a good time to consider how you can streamline your HR processes, to reduce your time to hire and build a healthy pipeline of talent that you can nurture and develop, as skills needed in the future emerge.
This is just the beginning of what I believe is a complete reimagining of the roles and responsibilities in aged care.
This will not only reduce your reliance on costly agency staff, but make it easy for employees to stay compliant. For example, taking a mobile-first approach can help deskless employees meet their re-certifications, as well as work within their scope of practice.
The recent delay to the implementation of the Aged Care Act was designed to give aged care providers an opportunity to better prepare for the reforms, and time for more details to be released and digested.
But as November looms, there's never been a better time to finalise the digital transformation strategies that will simplify and streamline your technology, financial systems and HR processes.
Instead of seeing these reforms as an administrative burden, I believe it's an opportunity to leverage the renewed investment and focus in the sector to empower your teams, create capacity and make their day-to-day lives more meaningful.
This is just the beginning of what I believe is a complete reimagining of the roles and responsibilities in aged care, where back offices are automated, decisions are data-driven, and those delivering aged care can focus on doing what they do best: providing high-quality care to older Australians.
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