On July 1, 2025, the new Aged Care Act will roll out, bringing with it updated Financial and Prudential Standards that every aged care provider needs to understand. These changes aren’t just paperwork; they’re about ensuring financial stability to deliver high-quality care for older Australians.
The new framework simplifies the existing four standards into three streamlined ones, designed to strengthen governance, protect funds, and maintain continuity of care. With less than two months to go, providers must act now to meet these Aged Care Standards in Australia and avoid disruptions. At SAH Consulting, we’re here to help you navigate this shift with confidence, ensuring compliance while keeping your focus on exceptional care.
Why New Financial and Prudential Standards Matter
The Royal Commission into Aged Care Quality and Safety (2021) laid bare the need for change, highlighting gaps in financial transparency and governance that put residents at risk. The new Financial and Prudential Standards are a direct response, aiming to bolster financial management, safeguard refundable deposits, and ensure providers can deliver consistent, high-quality care.
Strong financial health isn’t just about meeting regulations—it’s the backbone of delivering the new aged care quality standards that prioritise the wellbeing of older Australians. Picture this as a conversation at a provider meeting: these standards are about building trust and ensuring your organisation can keep caring for residents, no matter what challenges come your way.
The New Standards: A Simplified Framework
The current four standards—Liquidity, Governance, Records, and Disclosure—are being replaced by three focused Aged Care Standards, effective July 1, 2025:
- Financial and Prudential Management Standard: This applies to all registered providers, including home care (categories 4 and 5). It ensures robust governance systems, requiring fair and reasonable financial decisions that prioritise the best interests of those receiving care.
- Liquidity Standard: Exclusive to residential care providers, this mandates maintaining sufficient liquid assets to meet financial obligations, including an enforceable minimum liquidity amount calculated quarterly.
- Investment Standard: Also for residential providers, this requires responsible investment strategies, particularly for refundable deposits, to protect funds and support quality care delivery.
A key shift? Home care providers now face the Financial and Prudential Management Standard for the first time, while Liquidity and Investment Standards apply only to residential care. Compliance with these standards is a condition of registration—non-negotiable for staying in the game.
What’s Changing for Providers: Key Impacts
The new Aged Care Standards bring significant changes that providers need to prepare for:
- Expanded Scope: For the first time, home care providers (categories 4 and 5) must comply with the Financial and Prudential Management Standard, aligning their governance with residential care expectations.
- Liquidity Requirements: All residential providers, even those without refundable deposits, must meet the new Liquidity Standard. This includes calculating and maintaining a minimum liquidity amount tailored to their circumstances, using tools like the Commission’s liquidity calculator.
- Enhanced Reporting: Expect stricter requirements for financial reporting, risk management, and investment decisions. These changes aim to boost transparency and ensure providers are financially sound.
- Practical Implications: Providers will need updated systems for record-keeping, budgeting, and governance to align with the new standards. This might mean overhauling processes or investing in new tools to stay compliant.
The Aged Care Quality and Safety Commission offers resources, like the liquidity calculator and draft guidance, to help providers prepare. Start exploring these now to get ahead.
Preparing for Compliance: Practical Steps for Providers
With July 2025 approaching, here’s how providers can get ready:
- Assess Current Systems: Review your financial governance, liquidity, and investment strategies to identify gaps. Are your processes ready for the new reporting requirements?
- Train Staff: Ensure your team understands the new Aged Care Standards in Australia, particularly for financial reporting and compliance. Training builds confidence and reduces errors.
- Leverage Tools: Use the Commission’s liquidity calculator and guidance materials to streamline preparation. These free resources are designed to make compliance easier.
- Engage Early: Consult with stakeholders and seek expert advice to align with the New Aged Care Quality Standards. Early action prevents last-minute stress.
Preparation isn’t just about ticking boxes—it’s an opportunity to strengthen your operations and enhance care quality. Start now to stay ahead of the curve.
How SAH Consulting Can Help You Navigate the Changes
At SAH Consulting, we’re your trusted partner in tackling the new Financial and Prudential Standards. Our practical, provider-focused approach ensures you meet regulatory requirements without losing sight of what matters most—delivering exceptional care. We’re here to simplify the complexity, helping you build robust systems that support both compliance and quality. Let us guide you through this transition with confidence.
Final Thoughts
The new Financial and Prudential Standards are an opportunity to strengthen your organisation and deliver better care. To prepare, start by reviewing your financial governance and liquidity systems to ensure they meet the new requirements. It’s also essential to train staff on the updated standards and enhanced reporting obligations to maintain compliance.
Make use of the Commission’s liquidity calculator and guidance resources to assist in assessing your financial preparedness. Consulting experts can be a crucial step to ensure your organisation is fully compliant by the July 2025 deadline. Additionally, it’s important to communicate these changes to residents to build trust and foster transparency.
These standards in Australia go beyond mere rules—they aim to ensure financial stability and support the delivery of safe, high-quality care for older Australians. Don’t wait until the last minute. Contact SAH Consulting today for expert guidance on navigating these new standards.
Let us help you stay compliant and continue providing the exceptional care your residents deserve.