The new Aged Care Act will commence from 1 July 2025. It will replace existing legislation, including the current Aged Care Act 1997 and the Aged Care Quality and Safety Commission Act 2018.
As part of this reform new Financial and Prudential Standards will take effect, setting out the minimum requirements for good financial and prudential management of registered providers of government funded aged care.
The new Standards simplify the current framework by replacing 4 Standards (Liquidity, Governance, Records and Disclosure) with 3 updated, focused Standards:
- Financial and Prudential Management Standard
- Liquidity Standard
- Investment Standard.
The new Standards aim to strengthen the financial governance and sustainability of aged care providers, so they can deliver high-quality care and services and maintain continuity of care for older people.
To support providers, the Commission has developed draft guidance based on the proposed new Standards. The guidance is an example of the type of resource we will provide to help providers understand and apply the final Standards. We encourage providers to review the draft guidance and share feedback to make sure the final resources are clear, practical and useful.
Financial and Prudential Resources
- Read the new Financial and Prudential Standards guidance for providers
- Read the Financial and Prudential Standards – consultation draft – this is the latest version of the draft legislation which outlines the proposed requirements for providers
- Read the Compliance Management Insights blog on the proposed new Standards
- Download the new Financial and Prudential Standards poster
If you have any questions about the new Standards, you can email us New_FP_Standards@agedcarequality.gov.au.
Have your say
We encourage providers to participate in the consultation on the new Financial and Prudential Standards.
Consultation runs from 18 February to 7 March 2025.
- Read the Financial and Prudential Standards guidance for providers
- Complete the survey
What’s changing?
Key changes include:
Minimum liquidity requirements
- The Liquidity Standard now includes an enforceable minimum liquidity amount for all residential aged care providers, tailored to their circumstances.
New obligations for home care services providers
- Home care service providers (in categories 4 and 5) must now comply with the Financial and Prudential Standards, specifically the Financial and Prudential Management Standard. However, they do not need to meet the Liquidity or Investment Standards - these Standards, which only apply to residential aged care providers.
Liquidity requirements for all residential aged care providers
- All residential care providers must comply with the new Liquidity Standard requirements, even if they do not hold refundable deposits.
Enhanced financial reporting and risk management
- There are extra requirements for financial reporting, investment decisions and managing risk, to improve transparency and governance practices.
Assess your liquidity level
The new Liquidity Standard introduces a minimum liquid assets calculation. Providers must calculate and maintain their minimum liquidity amount on a quarterly basis and have a written liquidity management strategy.
Download our liquidity calculator to enter your data to assess your current liquidity status.
If you have any questions about the new Standards, or the liquidity calculator you can email us New_FP_Standards@agedcarequality.gov.au
