The Financial and Prudential Standards are being updated to strengthen financial management across the aged care sector.
The new Standards will be introduced with the commencement of the new Aged Care Act from 1 July 2025.
The existing Standards will remain in effect until then.
The Commission is developing resources on the new Financial and Prudential Standards to help providers understand how the Standards will apply to their service, including a liquidity calculator.
The proposed new Standards simplify the current framework by replacing 4 Standards (Liquidity, Governance, Records and Disclosure) with 3 updated, focused Standards:
Liquidity Standard
- Requires providers to maintain enough liquid assets so they can meet their financial responsibilities, refund deposits and manage risks effectively. Liquid assets are assets that can be quickly turned into cash.
Financial and Prudential Management Standard
- Makes sure registered providers have governance systems and strategies to manage their organisation in a financially sound way.
- Requires providers to make financial and prudential decisions that are fair, reasonable and in the best interests of people receiving care.
Investment Standard
- Makes sure the organisation chooses, manages and monitors investments responsibly, including how they invest refundable deposits.
- Requires providers to develop and follow a strong investment management strategy so they can deliver safe, high-quality aged care services and protect refundable deposits.
- Now applies to all registered providers of residential care, not only those holding refundable deposits.
What’s changing?
The new F & P Standards will be familiar to most providers, as the obligations are similar to the current Standards.
The key changes include:
- an enforceable minimum liquidity amount for all residential aged care providers, based on their circumstances
- increasing the number of providers that are required to meet the Standards. For the first time, home care service providers will also need to meet the Standards, specifically the Financial and Prudential Management Standard.
If you have any questions about the new Standards, you can email us New_FP_Standards@agedcarequality.gov.au
