Aged care: quality and governance

Budget Review 2021–22 Index

Rebecca Storen


The 2021–22 Budget implements the Australian Government’s response to the Royal Commission into Aged Care Quality and Safety (the Royal Commission) and a generational plan for aged care in Australia. This $17.7 billion package  comprises five ‘pillars’:

  • $7.5 billion for home care over five years from 2020–21 (p. 100)
  • $7.8 billion for residential aged care services and sustainability over five years from 2021–22 (p. 102)
  • $942.0 million for residential aged care quality and safety over four years from 2021–22 (p. 101)
  • $652.1 million for workforce skills, training and registration over four years from 2021–22 (p. 103) and
  • $698.3 million for governance and regional access over five years from 2020–21 (p. 99).

Stakeholders have broadly welcomed the Australian Government’s response to the Royal Commission and the associated $17.7 billion reform package. The Australian Aged Care Collaborative (AACC) (which represents around 1,000 providers) said the package provides a pathway to a transformed aged care system, with resourcing to meet the needs of older Australians. Council on the Ageing (COTA) Australia identified the aged care reform package as a ‘serious and meaningful response’ to the Royal Commission.

This is one of three articles which provide an overview of the aged care budget measures and relevant elements of the response to the Royal Commission. The articles should be read in conjunction with one another.

This article focuses on access to quality aged care and governance issues. The other two articles cover:

  • access to aged care, and care and support in the home and
  • residential aged care and workforce.

For background information and context, this Parliamentary Library quick guide provides an overview of the Royal Commission’s Final Report.

New governance arrangements

The Royal Commission recommended fundamental reform of the aged care system, in particular the need for the system to recognise that people need to be placed at the centre of all aspects of aged care to ‘support people to live well into old age’ (p. 5). To achieve this, the Commissioners made many recommendations focused on system governance, provider governance, safety and quality. Their first three recommendations focused on a new aged care Act that:

… must enshrine the rights of older people who are seeking or receiving aged care. This will leave no doubt to all involved in the system about the importance placed on these rights. A rights-based approach must guarantee universal access to the supports and services that an older person is assessed as needing. (Vol. 1, p. 79)

In its initial response to the Royal Commission’s Final Report, the Australian Government confirmed it would immediately start working towards a new Act. 

The Royal Commission recommended new and robust governance arrangements and proposed two different structures for the new aged care system. Commissioner Pagone proposed the Independent Commission model and Commissioner Briggs proposed the Government Leadership model. Both models included a system governor, quality regulator, prudential regulator and a pricing authority (p. 4).

A new aged care Act from 2023

The Budget provides $26.7 million over four years (from 2021–22) to develop a new aged care Act, which will replace the Aged Care Act 1997 and the Aged Care Quality and Safety Commission Act 2018 (Budget Measures: Budget Paper No. 2: 2021–22, p. 99). According to the Australian Government Response to the Royal Commission, the new Act is intended to commence from 1 July 2023 (p. 1). The Government has identified that this new Act will be values based (p. 7), however it is unclear whether this new Act will reflect the complete recommendations from the Commissioners of a rights-based approach with universal access (Royal Commission Final Report, p. 17).

Additional oversight and advisory arrangements

The Commissioners made several joint and separate recommendations to enhance the governance of the aged care system, including:

  • Commissioner Briggs recommended the Australian Government establish a Council of Elders to consult and represent older people’s view on the aged care system and the rights and dignity of older people (Recommendation 9).
  • Commissioner Pagone recommended the establishment of an Aged Care Advisory Council to provide advice on areas such as aged care policy and service arrangements (Recommendation 7).
  • Both Commissioners recommended that an independent office of an Inspector-General of Aged Care be established to be responsible for investigating, monitoring and reporting on the administration and governance of the system (Recommendation 12).

The Budget provides $21.1 million over four years to establish the advisory councils and the office of the Inspector-General of Aged Care (pp. [148–149]). The Government plan for aged care states that the new National Aged Care Advisory Council will be established from July 2021 (p. 20). It appears that the Council of Elders will be established in 2021 (p. 7). A commencement date has not been provided for the office of the Inspector-General of Aged Care. The Commissioners recommended an Inspector-General should be appointed under an interim arrangement before being formally established in the new Act (Recommendation 12.4).

Provider governance and capability

In its initial response to the Royal Commission’s Final Report, the Australian Government provided $14.2 million to strengthen the Aged Care Quality Standards (the Standards) and announced a new Assistance Commissioner for Sector Capacity and Education with the Aged Care Quality and Safety Commission (ACQSC). The Department of Health Budget Factsheet provides some additional information on these announcements, including that the budget provides $30.1 million from December 2021 to strengthen the governance and enhance capability of the sector (p. [146]).

Revision of the Standards

In the Final Report, the Commissioners recommended the Australian Commission on Safety and Quality in Health Care (ACSQHC) be expanded to include aged care (Recommendation 18). In its response, the Australian Government has not fully supported this recommendation and instead, from 1 July 2021, will transfer the responsibility of reviewing and revising the standards related to clinical care in aged care to the ACSQHC. The Department of Health will retain responsibility of the non-clinical care standards. A review of the Standards will be completed by December 2022 (pp. 17–18).

Provider governance

Provider governance will be enhanced with increased legislative obligations that aim to improve transparency and accountability, and to ensure people’s needs, preferences and best interests are met. These changes respond to the recommendations made by the Royal Commission in Chapter 13 on provider governance (Australian Government Response, pp. 58–59).

Aged Care Quality and Safety Commission

The new aged care Act will replace the legislation under which the ACQSC is established. The ACQSC will undergo a capability review in 2023 to inform the design of a new independent Aged Care Safety and Quality Authority (Australian Government Response, pp. 11–12).

The ACQSC is estimated to grow from an average staffing level of 519 for the 2020–21 financial year to 831 for the 2021–22 financial year (Portfolio Budget Statements 2021–22: Budget Related Paper No. 1.7: Health Portfolio, p. 135). This significant increase reflects the number of budget measures that impact the ACQSC, some of which are outlined below.

The Budget provides $36.7 million over four years to enhance the ACQSC’s capacity to undertake compliance activities on home care packages. It is estimated that this will allow for an additional 750 quality reviews and assessment contacts over two years from 2022–23 (p. 102).

The Government plan for aged care (p. 14) states that the Budget provides $264 million for the ACQSC to strengthen its regulatory powers and capability, including:

  • $8.3 million to develop a tool to enhance the ACQSC’s oversight of high-risk home care services (p. 14)
  • $24.7 million for 2021–22 for the ACQSC to undertake 1,500 additional site audits in residential aged care, an increase of 900 scheduled for the year, and
  • $148.3 million to respond to complaints, undertake residential aged care audits, home care reviews, pursue cases of non-compliance and undertake more prudential and financial investigations. In addition, the ACQSC’s powers to pursue civil penalties, enforceable undertakings, injunctions and compliance notices will be strengthened (see also Health Portfolio 2021–22 Budget Stakeholder Pack (DoH Budget Pack) p. [123]).

Serious incidents and restraints

The DoH Budget Pack (p. [125]) states that the Budget provides $7.3 million to:

  • strengthen existing legislation from 1 July 2021 to:
    • clearly define restraint
    • clarify consent arrangements
    • ensure restraints are only used as a last resort, following attempts of alternative strategies
  • appoint a Senior Practitioner in 2021–22 to lead a sector and GP education campaign on the use of restraints and provide independent oversight of the use of restraints (see also Australian Government Response, p. 16) and
  • extend the ACQSC pharmacy program until 2025 (p. 125).

In its response to Recommendation 17 of the Royal Commission, the Australian Government states that the ACQSC is working with the ACSQHC and the National Disability Insurance Scheme Quality and Safeguards Commission to align the regulatory approaches on the use of restraints (p. 16).

There is also $14 million to expand the Serious Incident Response Scheme into home care from 1 July 2022 (p. 14).

Caring for people with dementia and the use of restraints

To improve the sector’s dementia care capability and to assist with reducing reliance on restraints, the Budget provides:

  • $67.5 million for dementia care, including additional funding for the Dementia Behaviour Management Advisory Service and the Severe Behaviour Response Teams to support up to 13,000 more referrals a year and
  • training by dementia specialists for aged care providers on the management of psychological symptoms and behaviour changes to assist with restraint prevention (DoH Budget Pack, p. [127]).

Pricing transparency for home care

Stakeholders have raised concerns about the proportion of home care package funds that are spent on administration costs (for example, National Seniors Australia), with analysis of the Home Care Provider Survey suggesting a sector average of 28% of the package funds (2018–19) were spent in this manner (p. 4). The Budget builds on the existing transparency measures introduced by the Department of Health. The $18.4 million budget measure includes assurance reviews of home care providers and enhanced fraud management capability within the Department (DoH Budget Pack, p. [106]).

Quality measures

The Budget provides $100 million to improve visibility and implementation of quality measures, including:

  • a star rating for all residential aged care services will be available on My Aged Care by the end of 2022
  • introduction of additional quality indicators in residential aged care by the end of 2022
  • introduction of quality indicators for care at home by the end of 2022
  • introduction of consumer experience and quality of life indicators by the end of 2022 and
  • development of a National Aged Care Data Strategy by 2024, which will include an aged care minimum data set and new dementia data (DoH Budget Pack, p. [132]).

Advocacy services

The Budget provides $94 million to expand independent advocacy services. This funding will allow the advocacy workforce to double to over 150 advocates. This will enhance services through the provision of face-to-face and virtual advocacy and education and networking sessions (DoH Budget Pack, pp. [132–133]).

Regional offices

In the Royal Commission’s Final Report, Commissioner Briggs recommended that the Department of Health establish a network of 50 small regional offices who would be responsible for a range of functions including local planning and engagement with older people (Recommendation 8.6). The Budget provides $13.4 million for 2021–22 to trial the establishment of offices in eight Primary Health Network (PHN) regions, with a broader roll-out being subject to an evaluation (DoH Budget Pack, p. [150]).

Primary care

The DoH Budget Pack sets out measures to improve access to primary care for older people as per below (pp. [129–130]).

The Budget provides $365.7 million over four years to improve access to primary care and other health services. This measure includes five main components, with the most financially significant being $178.9 million for PHNs to:

  • support the delivery of telehealth for people living in residential aged care
  • improve out of hours support for residential aged care
  • develop local dementia care pathways to support GPs to link people with dementia and their carers with services and
  • support identification and monitoring of people’s health needs so they can live at home for longer.

The Greater Choice for At Home Palliative Care Pilot will be extended to all PHNs with $37.5 million over four years. The intent of this program is to help people access end-of-life and palliative care in their homes through locally responsive approaches.

The Aged Care Access Incentive will be boosted by $42.8 million over two years from 1 July 2021. This incentive seeks to increase the face-to-face care from GPs in residential aged care, with this additional funding doubling the existing maximum years payment to $10,000.

Improved medication management in residential aged care will be allocated $45.4 million will be provided to support transfers between care settings, which includes use of electronic National Residential Medication Charts and the My Health Record.

In addition, $23.6 million will be used to enhance data and evidence to improve planning to better meet people’s health needs. This will include identifying the drivers of higher hospitalisation rates for people living in residential care, the use of multi-disciplinary team models to reduce avoidable hospitalisations, and identifying the allied health workforce available in both the home and residential care setting.

Stakeholder reactions

Dementia Australia welcomed the ‘extraordinary commitment to dementia’ announced in the Budget, saying that the Australian Government was providing a ‘transformational investment’.

Palliative Care Australia (PCA) welcomed the Australian Government’s response to the Royal Commission but is concerned that the funding falls short of the amount needed as recommended by the Royal Commission itself. PCA noted that additional attention will be required to ensure the palliative care needs of older Australians are addressed under the Australian National Aged Care Classification model.

The Pharmaceutical Society of Australia welcomed the Australian Government’s response to the Royal Commission but noted more must be done to safeguard people living in residential aged care from harms caused by medication mismanagement.