Client alert: Associated provider compliance – final preparations ahead of January 2026

Under the new Aged Care Act 2024 (Cth) and Aged Care Rules 2025, aged care providers will be directly accountable for the conduct of any Associated Provider — that is, any subcontractor or third party delivering funded aged care services on their behalf.

If an Associated Provider fails to meet legal obligations — whether through poor screening, a Code of Conduct breach or poor delivery — the registered provider will be treated as responsible. This applies even where subcontracting arrangements are long-standing or indirect.

What’s changing?

The Act imposes clear and prescriptive duties on providers using subcontracted services. Key obligations include:

• Worker compliance — AP staff must meet the same screening and Code obligations as your direct employees;
• Contractual clarity — AP-delivered services must be disclosed in service agreements and monthly statements;
• Regulatory transparency — the commencement, change, or end of any AP arrangement must be notified, with mandatory detail; and
• Ongoing accountability — provider’s remain legally responsible for the conduct of APs, regardless of contractual terms.

Breach – Possible Implications

• Client harm — Breach of statutory duties (provider and RP), penalties for workers (Code breaches);
• Subcontractor failure — Enforcement risk;
• Loss of registration for systemic or unmanaged non-compliance; and
• Reputational damage.

Minimum compliance expectations by 1 January 2026

To meet the new requirements, providers should ensure the following are in place:

1. Governance and Risk Oversight

• Associated Provider Risk Management framework has been adopted and implemented
• The board is briefed on vicarious liability, registration risk, and legal exposure

2. Contractual Framework

• All Associated Provider contracts include required compliance clauses
• Legacy contracts have been reviewed and varied where required

3. Workforce & Conduct Controls

• Screening records and Code training are maintained for all AP workers
• An escalation and remediation process exists for Code or quality/safety breaches

4. Notifications & Record-Keeping

• SOPs and templates are in place for AP notifications
• Provider Register entries are updated and reconciled with contract and invoicing systems

5. Consumer-Facing Documents

• Service agreements clearly identify services delivered by an AP
• Monthly Home Support statements name the AP for each subcontracted service

How we can assist

We are supporting providers with a targeted suite of legal documentation and governance tools, including:

• Associated Provider Master Agreements (Major/Minor) – for new APs;
• Agreement Deed of Variation – to update existing AP arrangements;
• Agreement Checklist – for internal review and audit;
• Associated Provider Risk Management Framework – for board oversight;
• Board Briefing Pack – covering framework, duties, penalties, and resolutions;

Next steps

Providers should now confirm governance settings, update contractual documentation and brief their boards ahead of commencement.

We are assisting providers nationally — across Residential, Support at Home and CHSP — to ensure their legal obligations are met.

To request tailored documents or implementation support, please contact Amber Crosthwaite at 0400 143 677 or amber.crosthwaite@lavan.com.au.

Disclaimer

The information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.