Throughout 2025, it was widely assumed that residential providers would not be required to enter into new agreements with their existing residents. However, the Aged Care Transitional Rules require that residential aged care providers must ensure that all resident agreements meet the requirements of the new Act, even if the resident entered the home before 1 November 2025.
Variations to agreements were also required in the Support at Home sector. This has proved a lengthy and difficult process and some Support at Home participants have still not signed. While residential aged care providers have until 31 October to ensure this occurs, given the difficulties the home care sector has faced in varying previous agreements with their clients, we strongly encourage providers to start this process as soon as possible.
What does this mean?
Having an agreement in place that complies with the legislation is a requirement to deliver funded aged care and to be a registered provider. Breaching this requirement could impact a provider’s ability to claim subsidy and expose the provider to other risks.
The Transitional Rules require RAC provider to review and vary their agreements to bring them in line with the new Act “as soon as practicable, and no later than the end of the period of 12 months beginning at the transition time”. The Rules state that in conducting the review, the provider must:
- give the resident an opportunity to participate,
- consider whether any updates are required, and
- vary the service agreement in accordance with the Rules.
There are some suggestions that providers ask residents to sign a new agreement than simply varying the existing agreement. We caution providers against this as it may have a range of undesired legal implications.
