Health & Community Law Alert: Aged Care Update – Royal Commission into Aged Care Quality and Safety final report released

By Alison Choy Flannigan

The Final Report of the Royal Commission into Aged Care Quality and Safety was published on 26 February 2021 and released by the Australian Government on 1 March 2021, as was the Government's press release in response.

Some key findings

The aged population in Australia is increasing with complex health needs and memory and mobility disorders, from 515,700 (or 2%) in 2018/9 and projected to 1.5 million (or 3.7%) in 2058.

The Royal Commission found that at least 1 in 3 people accessing residential aged care and home care services or over 30% have experienced substandard care, including abuse including in relation to nutrition, medication management, skin care, complex care, physical or sexual abuse or inappropriate restrictive practices.

The elderly found difficulties in entering and navigating the system.

‘Many of the people and institutions in the aged care sector want to deliver the best possible care
to older people, but are overwhelmed, underfunded or out of their depth.’

‘The Australian Government has been the dominant funder of aged care services, but
it has not funded the system adequately.’

Key recommendations

The Royal Commission has made 148 recommendations, including the following.

A new Act

A major recommendation involves replacing the Aged Care Act 1997 (Cth) with a new Act to come into force no later than 1 July 2023. The Final Report recommends a plethora of requirements in the new Act, including a revised definition of ‘aged care’ and new objects. The proposed new Act’s purpose and principles include placing people at the centre of aged care; common themes such as dignity & respect, control & choice, the importance of relationships and connection to community, and a good quality of life and ageing at home.

Governance of the New Aged Care System

The Royal Commission recommended better system governance including long term policy objectives, monitoring performance, systemic redesign, the creation of a Pricing Authority and an Inspector General of Aged Care.

Commissioner Pagone recommended the establishment of institutions with greater independence from Government vs Commissioner Briggs proposed a Government leadership model with independence in certain areas such as quality regulation.

Quality and safety

Immediate attention should be on food and nutrition, dementia care, the use of restrictive practices and palliative care.  An urgent review of the Aged Care Quality Standards is required.

Quality standards/indicators similar to the health system set by the Australian Commission on Safety and Quality in Health Care were recommended. The Royal Commission also recommended that the role of the Australian Commission on Quality in Health Care be expanded to aged care.

Most notably, the Commissioners recommend that the new Act imposes a positive and non-delegable statutory duty on all approved providers to provide high quality and safe care and a duty to ensure any worker has the experience, qualifications and skills and training to perform the care.

Star ratings performance information should be provided for people seeking care.

Moreover, the Final Report recommends amendments to the Quality of Care Principles 2014 (Cth) relating to the use of restrictive practices in aged care. It is recommended that restrictive practices are based on an independent expert assessment and subject to ongoing reporting and monitoring. Further, only a psychiatrist or geriatrician can prescribe anti-psychotic drugs to restrict their use in residential aged care.

Securing better access to health care – accreditation and funding

The Royal Commission recommended multidisciplinary outreach services – with hospital networks; older persons mental health services, a Senior Dental Benefits Scheme.

Other health care reforms include comprehensive health assessments, GP mental health treatment, mental health assessment, allied mental health practitioners providing services in residential aged care; establishing of a dementia support pathway and access to specialist dementia care services and stronger regulation of restraints.

The aged care workforce

A key recommendation involves establishing a National Registration Scheme. According to Recommendation 77, the Scheme will impose a mandatory minimum qualification of a Certificate III, minimum levels of English language proficiency and ongoing training requirements.

Further, the Final Report recommends minimum staff time standards for residential care. According to Recommendation 86, approved providers must engage registered nurses, enrolled nurses, and personal care workers for at least 200 minutes per resident per day for the average resident, with at least 40 minutes of that staff time provided by a registered nurse. The minimum staff time standard should be linked to a casemix-adjusted activity based funding model.

Younger people in residential aged care

Recommendation 74 details restrictions on younger people in residential aged care. According to this recommendation, the Australian Government should immediately instate mechanisms to ensure that no person under the age of 65 years enters residential aged care and no person under the age of 45 years can live in residential aged from 1 January 2022.

Provider governance

Regarding provider governance, the Commissioners recommend amendments to the Aged Care Act 1997 (Cth) and the Aged Care Quality and Safety Commission Act 2018 (Cth) to require, among other suggested amendments:

  1. that the governing body of an approved provider providing personal care services must have a majority of independent non-executive members (unless the provider has applied to the Aged Care Quality and Safety Commissioner for an exemption and the exemption has been granted); and
  2. that the constitution of an approved provider must not authorise a member of the governing body to act other than in the best interests of the provider.

To improve leadership and culture, approved providers should have a board with skills mix; experience and knowledge of governance responsibilities; a care governance committee. The governing body of the approved provider must provide an annual attestation of compliance; leadership responsibilities and accountability and there should be a new governance standard.

The powers of the regulator should be increased; regulating for quality and safety; approval and accreditation; monitoring safety and quality (including more rigorous graded assessment rather than pass or fail, strengthening of regulators powers and more unannounced visits without warrant or consent); and improved complaints handling – including Aged Care Safety and Quality Authority being required resolve complaints within 60 days.

The new Serious Incident Reporting Scheme, including incident management obligations and compulsory reporting obligations will commence from 1 April 2021.

Residential aged care to include allied health care

According to Recommendation 38, it is recommended that each provider has arrangements with allied health professionals to provide services to people receiving care as required by their assessment or care plan.

Funding the aged care system

Another key recommendation involves the establishment of an Aged Care Pricing Authority. The Pricing Authority will be responsible for determining prices for specified aged care services and recommending to the Australian Aged Care Commission the aged care services for which economic regulation may be appropriate, such as price caps.

It is contemplated that RADs may be phased out and replaced by a capital fund.

It is proposed that the wait list for home care services be cleared by the end of 2021.

Recommended immediate relief includes increasing the basic daily fee from $52 per day for everyday living expenses to $62 per day; funding for rural and remote and education and training.

Commissioner Briggs recommended that funding should be by way of a 1% levy on taxable income to finance a special purpose fund or aged care levy.  Commissioner Pagone recommended an insurance model.

Aged Care Design Principles and Guidelines for accommodation

Recommendation 45 details suggestions for improving the design of aged care accommodation. The Final Report suggests that the Australian Government develops and publishes a comprehensive set of National Aged Care Design Principles and Guidelines on accessible and dementia-friendly design for residential aged care which should be capable of application to ‘small household’ models of accommodation as well as to enablement and respite accommodation settings. In addition, the Australian Government should provide additional capital grants or upgrade residential aged care facilities to provide small-scale congregate living.

Further, the Final report suggests a program to promote the adoption of these Design Principles, which includes industry education and financial incentives.

Immediate Government Response Package

The Australian Government has announced a further $452.2 million package as an initial step in responding to the Final Report. This Immediate Response Package will be distributed across five broad ‘pillars’ that will underpin the Australian Government’s response:

  1. Home Care: $18.4 million to enhance the oversight of the Government’s Home Care Packages Program
  2. Residential aged care quality and safety: $32 million to enhance the capacity of the Aged Care Quality and Safety Commission and greater regulation around the use of restraints in care
  3. Residential aged care services and sustainability: $189.9 million for care providers to maintain services while the Government considers the recommendations in the Final Report and $90 million to support facilities facing financial stress
  4. Workforce: $91.8 million to create over 18,000 places for workers between now and mid-2023
  5. Governance: $30.1 million to strengthen the governance of aged care providers and legislative governance obligations on the sector.


This is an opportunity to overhaul Australia’s aged care system not to be missed.

The report is welcomed – most of the recommendations are compelling.

Most providers are well meaning – there are many lessons to be learnt from the disability sector and the health care sector which have been observed – including:

  • a human rights approach to care;
  • improvements to restrictive practices;
  • Australian Commission on Safety and Quality in Health care standards and accreditation requirements; and
  • case mix,

however, the health care system is funded very differently.

There is a moderate risk of:

  • over-regulation; and
  • causing regulatory uncertainty (eg phase out RADs and uncertainty how tax or aged care levy funds are allocated)

and many aged care providers (and their directors,  investors and lenders) will simply exit which means a lack of choice, strained resources and shortages of services and even more pressure on a strained system.

Therefore, evidence-based modelling (based upon better data); costing to set price; funding at sustainable levels and further consultation is required as well as an appropriate transition period (as there was for NDIS).

Providers need guidance with compliance and fair regulation but if they are not up to it, they should exit.

This article was written with the assistance of Lauren Krejci, Paralegal.


Alison Choy Flannigan

Alison Choy Flannigan

Partner & Co-Lead, Health & Community

Alison specialises in advising clients in the health, aged care, disability, life sciences and community sectors. 

Related industries

You might be also interested in...

Health & Community | 12 Feb 2021

Health & Community Law Alert: liability issues with COVID-19 and COVID-19 vaccines – who should be responsible for adverse events?

With the current debate on whether or not COVID-19 vaccines should become mandatory and vaccination programs underway in many countries, the question arises – who should be responsible for adverse events in relation to the vaccines?

Health & Community | 11 Feb 2021

Health & Community Law Alert: who can consent to restrictive practices? MS [2020] WSAT 146

In the event that an adult is incapable of consent and restrictive practices are required, who can consent to the restrictive practices? This issue was recently discussed in a case heard by the State Administrative Tribunal in Western Australia, MS [2020] WSAT 146 MS.