What Changed — The Aged Care Act 2024
Aged care insurance in Australia needs to be looked at differently now.
The Aged Care Act 2024 commenced on 1 November 2025, replacing legislation that had been in place since 1997. It applies to every registered provider in Australia — residential facilities, home care operators, and everyone in between.
The reforms came from the Royal Commission into Aged Care Quality and Safety, which identified significant systemic issues in how care was being delivered and overseen. The new Act responds with stronger standards, expanded regulatory powers, and clear legal accountability for providers and the individuals who run them.
For most providers, the practical question is straightforward: Does your current risk management and aged care insurance program reflect the environment you’re now operating in?
New Statutory Duties and What They Mean for Providers
The Act introduces two new statutory duties that sit at the centre of the reforms.
The Provider Duty requires registered providers to take all reasonable steps to avoid adverse effects on the health and safety of care recipients. This is a broad obligation — it covers clinical care, physical safety, and service quality.
The Responsible Person Duty applies to directors, executives, and anyone in a governance role. These individuals must exercise due diligence to ensure their organisation meets the Provider Duty. This makes governance a personal obligation, not just an organisational one.
Where a provider seriously fails to meet the Provider Duty, civil penalties apply. In significant cases, criminal offences may also be relevant under the Act. Alongside this, the legislation creates clearer pathways for care recipients — and their families — to seek compensation from providers where statutory duties are breached.
The Act also extends some of these obligations to associated providers: contractors and third-party operators who deliver services within a registered provider’s operations. This means providers may now carry some responsibility for the conduct of organisations they don’t directly employ.
The Regulator Has More Power Than Before
The Aged Care Quality and Safety Commission operates under a broader mandate from 1 November 2025.
New powers include the ability to:
- Issue banning orders against providers, workers, and responsible persons
- Enter and search residential facilities without a warrant or prior notice
- Conduct unannounced inspections as part of routine compliance monitoring
- Take action against former providers and workers, not just current ones
This represents a more active regulatory posture. Providers should expect increased scrutiny and a lower tolerance for systemic non-compliance — particularly where incident response or governance processes are not well documented.
5 Aged Care Insurance Areas Worth Reviewing Now
Most aged care providers carry professional indemnity or medical malpractice, public liability, and Directors & Officers coverage. In many cases those policies remain broadly appropriate. But the new Act changes the risk profile in ways that are worth working through at the next renewal of your aged care insurance.
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Directors & Officers Liability
The Responsible Person Duty creates personal obligations for individuals in governance roles. D&O coverage is designed to respond to statutory liability of this kind — but policy wording varies significantly. It is worth confirming that your policy specifically responds to duties introduced under the new Act, and that limits reflect the scale of your operation.
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Medical Malpractice and Professional Indemnity
The combination of a strengthened Provider Duty and clearer individual compensation pathways is likely to contribute to increased claims activity over time. Providers should confirm that their coverage reflects their current scope of services — particularly where home care has grown as a proportion of the business.
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Statutory Liability
Civil penalties for non-compliance are a feature of the new Act. Statutory liability coverage — and whether your policy covers the costs of regulatory investigation, not just the outcome of any eventual proceeding — is worth reviewing specifically.
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Home Care Coverage
The Act reinforces the shift toward keeping older Australians in their homes wherever possible. For providers growing their home care services, this introduces a risk environment that standard policies were not always designed to cover: incidents in private homes, contractor conduct, and clinical risk management across dispersed locations. If your home care book has grown, your insurance should reflect that.
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Associated Provider Arrangements
Standard policies typically cover the liability of the named insured. The Act’s treatment of associated providers — and the way it ties their conduct to a registered provider’s compliance position — may require additional consideration depending on how your business is structured. This is a relatively new area and worth discussing specifically with your broker at renewal.
Practical Steps for Providers
For most organisations, the priority is understanding how the new Act applies to their specific operation and working through whether existing arrangements are still fit for purpose.
Review governance structures. The Responsible Person Duty requires documented due diligence. Board members and executives should be briefed on their personal obligations and have clear processes in place.
Check your SIRS documentation. Serious Incident Response Scheme policies and procedures should be current, accessible, and consistently applied. Regulators will look at these.
Assess contractor arrangements. Identify which third parties fall within the definition of associated providers and what oversight mechanisms are in place.
Review insurance at next renewal — specifically. Ask your broker to map your existing coverage against the new exposure landscape. Don’t assume last year’s program still fits.
Brief your board. Governance is no longer a back-office function under this Act. Directors should understand what the Responsible Person Duty means for them individually.
A Note on the Market
It is worth acknowledging that the aged care insurance market has already been through a period of change. Since the Royal Commission and COVID-19, some insurers reduced their appetite for the sector, and terms tightened in a number of areas.
The new Act adds further complexity — particularly around associated provider liability, which existing policy structures were not written with in mind. Providers should expect these topics to come up at renewal and be prepared to have a clear picture of how their operation has changed.
Barrack works with aged care providers to structure coverage that reflects how they actually operate today. If your business has grown, added services, or not reviewed its program since the new Act commenced, get in touch with our team to arrange a review.
FAQs
Does the new Aged Care Act require providers to hold specific insurance?
No — the Act does not mandate particular insurance products. But it changes the liability landscape significantly, which makes reviewing existing coverage worthwhile.
Who counts as a “responsible person” under the Act?
Under the Act, a responsible person is anyone who has responsibilities associated with managing the operations of a registered provider — typically directors, executives, and senior managers.
Does aged care insurance cover home care services?
It depends on the policy. If your organisation has grown its home care operations, it is worth confirming your coverage reflects that — particularly for incidents in private settings and contractor management.
How often should providers review their aged care insurance?
At least annually. And sooner if the business has added services, taken on more staff, expanded locations, or changed its contractor arrangements.
What is the difference between the Provider Duty and the Responsible Person Duty?
The Provider Duty applies to the organisation — it must take all reasonable steps to protect care recipients. The Responsible Person Duty applies to individuals in governance roles — they must exercise due diligence to ensure the organisation meets its duty.
Useful Resources
