Aged care bosses to face jail under new federal laws

Board members of residential aged care facilities face criminal penalties of up to five years in prison if they’re found to be negligent.

Aged Care Minister Anika Wells. Picture: AAP

Board members of residential aged care facilities face criminal penalties of up to five years in prison if they are found to be negligent, under a sweeping overhaul of the aged care act the Albanese government is considering.

The significant ramp-up in penalties has prompted warnings from industry the move could have a “chilling” effect on people’s preparedness to step up for leading roles in residential facilities and trigger a mass exodus of talent from the sector.

According to the government’s exposure draft for its new aged care act, which is out for public consultation until February 16, board members will be liable for up to five years in prison in cases where an aged care provider has failed to take reasonable steps to prevent death, serious illness or injury.

Aged care expert Paul Sadler warned that the majority of not-for-profit aged care homes – about 80 per cent of the market – were heavily reliant on volunteers running not-for-profit organisations or church-affiliated homes. These people would be unlikely to be willing to cover the cost of personal liability in the roles, he added.

“These are serious penalties to contemplate and I am concerned this is going to have a deterrent effect on volunteers stepping forward to take up roles within the aged care sector,” Mr Sadler.

“Many not-for-profit boards are volunteer-run, they have volunteer members who may be the local doctor, or local solicitor or someone in the local community.

“This could have a chilling effect on people’s preparedness to step forward for these roles.”

Financial advisory firm Grant Thornton’s national head of health and aged care, Darrell Price, warned that the proposal was extreme, with the penalties not in line with the sector’s peer industries such as disability, primary and acute care.

Mr Price said the commonwealth knew the crucial role volunteers, who “give their time and expertise to improve governance of organisations that would otherwise struggle with talent attraction”, played in aged care.

“We know that industries work really well when three things are in balance – people who supply goods and services, those that consume them and people that work in them – and if there are onerous penalties for workers and directors in aged care then we will see an exodus of talent from the sector,” he said.

The aged care royal commission recognised volunteers as “an integral part of the aged care system”, recommending the federal government better support the unpaid workforce helping to support older people live a “meaningful and dignified life”.

According to the government’s exposure draft, a serious injury or illness is defined as when individuals need immediate treatment in hospital for a head or eye injury, a severe burn or separation of the individual’s skin from underlying tissue.

The overhaul of the federal aged care act comes as the sector scrambles to implement a suite of reforms including mandated minutes of care per resident, quality and safety standards, and full-time nursing requirements, as it adjusts to a new funding model brought in last year as recommended by the royal commission.

The sector is plagued with financial troubles, with the latest figures from the Quarterly Financial Snapshot of the Aged Care Sector revealing 66 per cent of private providers were operating at losses.

A spokesman for Aged Care Minister Anika Wells said criminal penalties would only occur in the “gravest circumstance” and the aged care royal commission criticised existing enforcement options, saying they did not meet community expectations.

“The Albanese government was voted in to address the systemic failures of the Coalition government’s handling of aged care including increasing safety for our most vulnerable Australians,” the spokesman said.

The Australian on Thursday revealed the nation’s residential aged care sector had greatly increased its use of short-term contract workers in a bid to fulfil Anthony Albanese’s stringent staffing reforms, rapidly escalating the cost burden on aged care providers and threatening their viability. With providers’ reliance on expensive agency workers having quadrupled, Aged Care Industry Association chief executive Peter Hoppo called for the act to be delayed until at least 2025 to allow the sector to evaluate the effectiveness of reforms introduced over the past 18 months.

Mr Hoppo said the government’s rapid implementation of reforms had resulted in “poor staff morale and the diversion of resources away from frontline services and those who the reforms are intended to benefit the most”.

“A pause at this time is critical to fully evaluate the impact and effectiveness of the reforms already introduced over the past 18 months, ensuring they have truly contributed to an enhanced quality of care,” Mr Hoppo said.

Opposition health and aged care spokeswoman Anne Ruston cautioned that any new penalties must undergo thorough consultation to ensure they do not have unintended consequences that impede the ability of providers to deliver quality care. “The new Aged Care Act must be responsive and flexible, reflecting the diversity of the sector and allowing for an appropriate implementation time frame to ensure that quality care for all aged care residents is the utmost priority,” Senator Ruston warned.

‘We do not want to see another example of this government leaving out all the critical details for unsighted delegated legislation like they did with 24/7 nurses, which flies in the face of consultation and transparency.”

One provider who spoke on the condition of anonymity said it was going to be “very difficult to convince people to be a director when they face substantial liability and will need to take a lot of steps to protect themselves”.

“We are seeking legal advice on it as the way they have constructed it in the act is very strange but we suspect it is reversing the onus of proof so now the provider has to establish that their conduct was reasonable,” the provider said.