The new Aged Care Act 2024 has introduced a new term for a type of third party contractors referred to as “associated providers”. The new term has created confusion in the sector as to who these contractors are, what to do if a contractor is an “associated provider” and what to do if they aren’t. Adding to the complexity is the Aged Care Quality and Safety Commission’s advice that an individual third party contractor (like a sole trader) will be considered an “aged care worker” rather than an “associated provider”.
What's the difference?
An associated provider is any entity that is engaged to delivers funded aged care services on behalf of a registered provider under a formal arrangement (Act, s 11(6)). Registered providers have an obligation to report their engagement of associated providers in these categories (and changes to these arrangements) to the Aged Care Quality and Safety Commission.
This is different from an aged care worker, who broadly is a person employed or otherwise engaged by the registered provider (or by an associated provider of the registered provider), whether as an employee, volunteer or contractor, to deliver funded aged care services (Act, s 11(4)).
In most cases when a registered provider engages an associated provider, they will also have employees or contractors that deliver services. If those workers are delivering funded aged care services, then they will be considered “aged care workers” and the registered provider who engaged the associated provider will be responsible for ensuring all obligations with respect to “aged care workers” under the Act are met including police checks, worker screening, training and qualifications.
What about sole traders?
Sole traders, whether gardeners or allied health practitioners, may fall under both definitions in the Act.
The Commission has clarified that, for the purposes of the Act, sole traders should be treated as aged care workers. However, just because the Commission views this type of contractor as an aged care worker, does not mean you can forego your usual procurement processes.
Providers still need an effective contract in place to manage the quality of services being provided and to mitigate your compliance and commercial risk.
Providers should also be mindful of particular workplace obligations that can arise when engaging sole traders as third party contractors, particularly in relation to WorkCover and superannuation.
What this means for registered providers
Our key takeaway is that whether they are an aged care worker or an associated provider or both, you must still ensure you have an effective contract in place with them.
You also need to have systems in place to ensure that the contractor is complying with their obligations under that contract. As the registered provider, you will be responsible if something goes wrong so it is critical you ensure that those delivering funded aged care services on your behalf are complying with their contractual obligations, whether they are an aged care worker or an associated provider. You must develop a system to regularly audit your providers and ensure that the contact in place participates in auditing.
How we can help
RK has prepared a range a range of associated provider agreement and other related templates which are available for purchase through our affiliate RK DocsConnect.
It’s free to register and browse. Simply go to www.rkdocsconnect.com.au.
What's next?
RK is developing an “auditing tool” to audit your associated providers’ compliance with their obligations. More information to come!
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