The journey towards independent Aged Care governance and a new act

The Royal Commission into Aged Care Quality and Safety released its final report in March 2021 with a focus on Aged Care Governance.

While there were 148 recommendations, the first recommendation was that a new act come into force by no later than 2023. 

We are now nearly six months on from the release of the report with less than two years for a new act to meet the proposed timeframe for which the federal government has accepted this recommendation.

A number of Legislative amendments were proposed to improve provider governance and all of these recommendations have been accepted by the government.

Given the significance of the changes to governance we would recommend each provider needs to start acting now to introduce a new governing body that must have a majority of independent non-executive members.  

If the recommendations are adopted as presented, your constitution will need to be amended so that the governing body must act in the best interests of you the provider. 

Fit and proper tests will be established for the members of the governing body, and you’ll be required as the governing body of the provider for the provision of annual reports that are publicly available

It was expected that by 1 July 2021, which is already passed, an accreditation process should be in place where members of the governing body and senior managers are appraised against leadership, team development, culture and practices consistent with the new Act.

A new governance standard by which one member of the governing body attests annually on behalf of the members has in place the structures, systems and processes to deliver high quality care and, if this cannot be done, explain how this will be remedied.

In order to assist providers, it was recommended that the government establish an ongoing program, commencing now to provide assistance to approved providers.

This year’s federal budget provides a 17.7 bn aged care reform package and the Australian government will be responding through the measure Residential Aged Care quality and Safety – Aged Care Immediate Priorities – Strengthening providers.

Given the timeframes involved and the move to greater governance with independent non-executive members we would recommend that you start acting now to attract these members to your governing bodies given the significant increase in demand for those who are capable of fulfilling these positions. 

Moves should also be made towards best practice with senior management and leadership to make a successful transition.

How can RSM help?

Get the right advice for operators in the aged care industry. Please reach out to your local RSM office who can assist and update you upon further information being released.