Some important legal obligations of Aged Care Providers

By 6 March 2023Litigation

Disputes are inevitable. To be litigation ready, it is essential that aged care providers understand their rights and responsibilities under the Aged Care Act 1997[1](“Aged Care Act”) and the User Rights Principles 2014[2]which relevantly includes the Charter of Care Recipients’ Rights and Responsibilities[3] (“Charter”). Under the Aged Care Quality and Safety Commission Act 2018,[4] the Aged Care Quality and Safety Commissioner also ensures quality monitoring and the compliance of aged care providers.[5] Every approved provider must appreciate that they need a complaints system, understand the impact of Australian Consumer Law[6] (“ACL”), be aware of their contractual obligations and protect consumer choice.

Complaints System

Every aged care provider needs a complaints system in their contracts with residents.[7] Section 56.4 of the Aged Care Act sets out the complaints resolution mechanisms. This section stipulates that providers must establish and use a complaints resolution mechanism to address complaints made by persons within the care of the provider.[8] Providers must also advise residents of other available mechanisms to address complaints[9] and provide assistance as the person requires to use those mechanisms.[10] The approved provider should also comply with any requirement for approved providers under the Complaints Principles.[11]

When sanctions are imposed, they may result in the suspension or revocation of approved provider status,[12] which is a fatal blow to the provider’s business operations. There are also other restrictions the provider may face, including:[13]

  • Restricting approval to existing services or places
  • Restricting funding to existing residents
  • Revoking or suspending the existing allocation of places
  • Varying the conditions of approval for allocated places
  • Prohibiting the further allocation of places
  • Revoking or suspending extra service status
  • Prohibiting granting of approval for extra service status
  • Revoking or suspending certification
  • Prohibiting the charging of accommodation charges or accommodation bonds
  • Requiring repayment of grants

Importantly, the complaints system is only capable of addressing systemic issues or minor problems — it cannot deal with serious harm or injury complaints — which leaves the vulnerable elderly without redress or a restorative process for these issues. The complaints system usually contained in contracts is the Aged Care Complaints system itself provided by the Aged Care Quality and Safety Commission.[14] There is nothing to prevent any potential litigation, but neither is there any mention of the resident’s right of access to the law.

One way to avoid litigation is to divert the dispute to alternative dispute resolution (“ADR”) procedures – by asking to include an ADR clause in your residential aged care contract.[15] Once the barriers start to fall, for example, to ACL claims, there will be a compelling need for ADR.

Aged Care Residents as Consumers

The lexicon of our aged care system has gone through many iterations since 1997 and now refers to aged care residents as consumers.[16] The decision to use the term consumer is a turning point in the balance of power over policymaking and practice in aged care because there is a pre-existing solid foundation of law and policy which supports and protects consumers[17]— which was previously lacking in the aged care system. There are now consumer rights, consumer law and the Aged Care Act, whichdefers to the ACL.

Noting the significant impact of this change, former Aged Care Minister Ken Wyatt stated:

“The single quality framework places consumers at the centre of their care and focuses on giving people greater choice and flexibility. It is part of the reforms being progressively implemented in aged care to create a competitive, market based system where consumers drive equality and where red tape is reduced for providers of aged care.”[18]

Unfortunately, even 5 years after this change in language, consumers have great difficulty accessing the ‘vehicle’ to drive equality.


Every consumer in aged care must be offered a contract.[19] Section 56.1 requires that the aged care facility must ‘offer to enter into a resident agreement with the care recipient’[20] and must ‘not act in a way which is inconsistent with any rights and responsibilities of care recipients that are specified in the User Rights Principles’.[21]

What is usually not in the contract is an ADR clause, a promise of a certain quality of care and a promise that the Charter is a part of the contract.[22]

To enter into a resident agreement, the care recipient, ‘must be informed of, and helped to understand, the terms of the resident agreement’,[23] including specifically about the care recipient’s rights and responsibilities,[24] the services to be provided to the care recipient[25] and the fees and other charges to be paid under the agreement.[26]

If the provider fails to meet their responsibilities under the Aged Care Act, there are no consequences outside of the Act itself.[27] However, providers must give consumers a copy of the Charter signed by the provider and must give a reasonable opportunity for the consumer to sign a copy of the Charter.[28] This step of asking for the consumer’s signature is critical as it enables consumers to acknowledge that they have received the Charter and had assistance with understanding their rights.[29] Importantly, consumers are under no obligation to sign the Charter and can receive care without signing the Charter.[30]

The Aged Care Act states that any resident agreement ‘must include any other matter negotiated between the approved provider and the care recipient.’[31] If a provider brought a claim to enforce the contract (e.g., for payment of fees), consumers may have recourse to pursue a cross claim for breach of the Charter.


The Charter also goes a long way to preserving consumer choice. The Charter requires that consumers have the right to make choices about ‘their daily life, financial affairs and possessions’.[32] Significantly, consumers can accept personal responsibility for their actions which ‘may involve an element of risk’.[33] Consumers can also ensure that they have a chosen person support them and speak on their behalf.[34]

As can be seen, it is imperative that aged care providers comply with their legal responsibilities to their residents. Our experienced team of solicitors at Elder Law Services can help you resolve disputes in aged care.

The team at Elderlaw Legal Services are ready to assist you. Contact us today on 02 9979 1009.Please note that the content of this article is for general informational purposes only and not for the purpose of providing specialised legal advice.

By Hayden Nelson

6 March 2023

[1] Aged Care Act 1997 (Cth).

[2] User Rights Principles 2014 (Cth).

[3] Ibid sch 1 (‘Charter of care recipients’ rights and responsibilities – residential care’).

[4] Aged Care Quality and Safety Commission Act 2018 (Cth).

[5] Ibid s 16.

[6] Competition and Consumer Act 2010 (Cth) sch 2 (‘Australian Consumer Law’).

[7] Aged Care Act 1997 (Cth) s 56.4(2).

[8]Ibid sub-s (1)(a)-(b).

[9] Ibid sub-s (1)(c).

[10] Ibid.

[11] Ibid s 56.3(1)(e); Aged Care Quality and Safety Commission Act 2018 (Cth) s 21(2).

[12] Rodney Lewis, ‘Aged Rodney Lewis, ‘Aged Care – Litigation Ready’ (Presentation, Grand Hyatt Melbourne, 16 July 2019) 17.

[13] Ibid.

[14] Ibid 18.

[15] Ibid 19.

[16] Ibid 20.

[17] Ibid 22.

[18] Commonwealth, Second Reading of the Aged Care (Single Quality Framework) Reform Bill 2018, House of Representatives, 24 March 2018, 4541 (Ken Wyatt, Aged Care Minister).

[19] Rodney Lewis (n 10) 24.

[20] Aged Care Act 1997 (Cth) s 56.1(h).

[21] Ibid sub-s (m).

[22] Rodney Lewis (n 10) 26.

[23] User Rights Principles (n 2) s 14(2)(a).

[24] Ibid sub-s (a).

[25] Ibid sub-s (b).

[26] Ibid sub-s (c).

[27] Aged Care Act (n 1) s 53.2(1).

[28] Rodney Lewis (n 10) 30.

[29] Ibid.

[30] Ibid.

[31] User Rights Principles (n 2) s 15(5).

[32] Charter of care recipients’ rights and responsibilities – residential care (no 3) s 1(n).

[33] Ibid s 1(m).

[34] Ibid s 1(t).

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