The Aged Care Act 2024 is set to usher in one of the most significant regulatory shifts the sector has seen in years. While its intent—to strengthen accountability, quality, and safety across aged care—is laudable, its new associate provider compliance requirements could have unintended consequences, particularly for the allied health professionals who underpin much of the sector’s service delivery.
A New Era of Oversight
Under the new Act, aged care providers delivering Level 4, 5 and 6 services must formally notify the government of their associate providers—third-party organisations or individuals engaged to deliver key components of care, including physiotherapy, podiatry, occupational therapy, dietetics, and other allied health services.
In principle, this transparency aims to ensure quality and consistency across the care continuum. But in practice, it creates a compliance web that could entangle smaller operators—particularly sole trader allied health professionals—in layers of administrative red tape.
Reporting and Recordkeeping: The New Burden
The Aged Care Quality and Safety Commission’s guidance makes it clear: every change to an associate provider agreement—whether a new engagement, modification, or cessation—must be reported. This means aged care providers will need to monitor and document every fluctuation in their subcontractor relationships.
For sole traders, this presents a dual challenge. On one hand, they must maintain meticulous records and meet their own compliance obligations to remain eligible partners. On the other, they risk becoming a liability for providers weary of managing the ongoing administrative churn. Aged care organisations will likely gravitate toward larger allied health groups with internal compliance teams simply because it’s easier to maintain regulatory stability.
The Hidden Cost of Compliance
The new compliance expectations don’t come cheap. For many sole traders, who already balance high caseloads with business management, adding complex governance and reporting duties could be cost-prohibitive. Investing in compliance systems, legal advice, and documentation processes may simply be beyond reach.
This is not just a paperwork problem—it’s an existential one. As compliance costs rise, margins tighten, and the flexibility that once defined the allied health sole trader model begins to evaporate. The risk is clear: fewer independent providers and less diversity in the aged care marketplace.
Aged Care Providers in the Crossfire
For aged care providers, the implications are equally challenging. Aged care organisations depend on external allied health professionals to deliver high-quality, timely care. But if those providers begin to exit the market due to administrative overload, the sector could face a shortage of qualified clinicians.
The result? An administrative and operational nightmare—contracts in flux, compliance reports delayed, and service continuity at risk. The very framework designed to ensure quality could inadvertently undermine it.
Quality, Capacity, and Stability: The New Imperatives
The Commission’s Regulatory Bulletin (RB2025-1) underscores that quality, capacity, and stability are the cornerstones of any associate relationship. But under the new model, maintaining stability may be hardest of all. If sole traders are forced out, aged care providers may be left scrambling for compliant partners, driving up costs and disrupting resident care.
Where Do We Go From Here?
The intent behind the Aged Care Act 2024 is sound—better transparency and accountability are long overdue. But without targeted support for small allied health providers—perhaps through simplified compliance pathways or shared reporting platforms—the reforms could decimate the very workforce they depend on.
In an environment where demand for allied health services is rising, we cannot afford to lose capacity in the name of compliance. Policymakers and regulators must strike a balance between oversight and sustainability—or risk trading quality care for bureaucratic control.
