In response to sector feedback, the Aged Care Quality and Safety Commission (ACQSC) has announced revisions to its proposed financial and prudential standards under the new Aged Care Act, easing liquidity requirements that providers argued were too restrictive.
The changes follow public consultation on the draft standards released in February, with 32 written submissions and 134 survey responses highlighting concerns, particularly around the proposed liquidity formula.
Originally, providers were required to hold liquid funds equal to:
- 35% of the previous quarter’s cash expenses
- 10% of residential refundable deposit liabilities (RADs)
- 10% of the retirement village refundable deposits
Following industry pressure, the Commission has now reduced the retirement component from 10% to 2% for independent living and retirement village liabilities held under the same corporate structure as residential aged care services. Additionally, ‘trade receivables’ will now be included in the liquidity calculation.
Aged Care Quality and Safety Commissioner Liz Hefren-Webb said the revisions are part of a broader effort to ensure providers can deliver high-quality care while maintaining financial resilience.
“These standards will help ensure that aged care providers manage resources responsibly, giving older Australians and their families confidence in the sector,” said Deputy Commissioner of Regulatory Operations, Gary Rake.
The revised rules still require providers to retain 35% of quarterly expenses and 10% of RAD liabilities, effective from 1 November 2025.
Ageing Australia’s Roald Versteeg welcomed the changes, describing them as “a win for providers and older Australians alike,” and praised the Commission’s willingness to act on sector concerns.
“Clearly the figure of 10 per cent would have strangled investment in the sector, which we were able to convey to the Aged Care Quality and Safety Commission in over a dozen meetings, reinforcing our original, evidence-based submission.”
Ageing Australia’s General Manager of Policy and Advocacy Roald Versteeg
The final standards are expected to be released in the coming weeks.
