Investment Standard: April to June 2026 | Aged Care Quality and Safety Commission

Introduction

We do targeted reviews to help providers understand their financial and prudential responsibilities. These reviews help us identify risks and improve provider compliance.

This review focused on understanding how well providers complied with the Investment Standard under the Aged Care Act 2024 which started on 1 November 2025.

Background

Between April and June 2026, we worked with 44 providers to assess if they understood their financial and prudential responsibilities under the Investment Standard.

We focused on the new requirements for an Investment Management Strategy (IMS).

Before 1 November 2025, providers had to have an IMS only if they invested refundable deposits in more than cash accounts and term deposits. Since 1 November 2025, the new Financial and Prudential Standards require all Category 6 providers to have a written IMS. This includes small providers who only invest refundable deposits in bank accounts and term deposits. Each provider’s IMS must include how they invest all funds, not just refundable deposits.

Of the 44 providers we selected to review:

9 providers had up to 20 refundable deposits that they invested only in Authorised Deposit Taking Institutions (ADIs). ADIs are banks, building societies and credit unions
29 providers invested refundable deposits in other ways (such as in corporate bonds, shares and managed funds) and reported this in their Annual Prudential Compliance Statement report
6 providers invested in land as well as other products or accounts.

Our findings

We assessed providers against the 3 key requirements of the Investment Standard, which require them to:

have and follow a written IMS
invest in line with their IMS
regularly review their IMS.

We found 18 providers didn’t comply during this review.

Reasons for non-compliance

The main reasons these providers didn’t comply were:

they didn’t have or follow a written IMS
their IMS didn’t include investment objectives.

Providers also didn’t comply because they:

didn’t write the IMS correctly or completely. For example, their IMS wasn’t in line with the Investment Standard or with the way they actually invested funds
didn't document reporting processes and procedures to identify, report and fix non-compliance
hadn't updated their IMS to align with the new Financial and Prudential Standards.

Of the 18 providers we assessed, we asked:

11 to submit updated IMS documents
7 providers, who had a lower risk of non-compliance, to update their IMS as soon as possible.

By the end of the review, they all complied with the requirements.

Investment insights

From the 44 providers, refundable deposit liabilities made up 73.5% of their invested funds. Of this:

20.4% was held in cash
34.7% was held in term deposits
44.8% was held in direct shares, corporate bonds or credit, and managed funds.

We also found that 24 providers used both internal and external investment management.

Good practice

During the review, we found many examples of good practice.

One provider, with the help of an external consultant, did a thorough gap analysis to improve their IMS. This helped them find where they weren’t complying, and made the requirements clear.
Some providers used their external investment advisor to help them write their IMS. The advisors then gave them quarterly reports that showed if the investments were in line with their IMS. This helped providers comply with the Investment Standard and keep their IMS up to date when investment strategies changed.