The Morrison government will set up a a new scheme to receive reports of neglect or abuse in aged care, after a study estimated more than 50,000 claims went unreported in the last year.
From July 1 next year, aged care providers will have to report a broader range of incidents, including neglect, psychological or emotional abuse and inappropriate physical or chemical restraint, to the Aged Care Quality and Safety Commission under a new Serious Incident Response Scheme.
The commission will have expanded powers to administer the scheme and take regulatory action if required.
Critically, providers will now have to report resident-on-resident incidents where the the perpetrator has a cognitive impairment.
Currently, such incidents are exempt from reporting, so long as the alleged offender has a pre-diagnosed cognitive impairment and the provider takes steps to manage their behaviour within 24 hours.
The issue came to the fore in Canberra during a 2015 inquest, after a dementia patient was suspected to have killed a fellow resident three years earlier.
Aged Care Minister Richard Colbeck said the $23 million scheme would "guarantee transparency and keep our loved ones safe".
"Any abuse of a care recipient is unacceptable," Mr Colbeck said.
The scheme comes off the back of a prevalence study undertaken by KPMG which found there were 1259 type one incidents - otherwise known as reportable assaults, which take in unlawful sexual contact and'unreasonable use of force - perpetrated by residents with a cognitive impairment in a six-month period.
There were a further 455 type two incidents recorded in the same period - incidents which do not meet the threshold for being considered a reportable assault, including emotional or psychological abuse.
The firm received data from 178 aged care providers from every state and territory except the Northern Territory.
When extrapolated to the 2717 aged care providers across Australia, KPMG estimated there would be 38,398 type one incidents and 13,757 type two incidents.
The Australian Law Reform Commission has previously raised concerns that the types of incidents aged care providers had to report to authorities was too narrow, as it did not capture resident-on-resident assaults.
In 2017, it recommended removing the exemption following its landmark investigation of elder abuse in Australia.
"Resident-on-resident sexual abuse, and physical abuse causing serious injury should be treated as serious incidents," the law reform commission said.
Labor's aged care spokeswoman Julie Collins said it should not have taken three years for the Coalition to act on the recommendations.
"Any abuse of older Australians in aged care is completely unacceptable and it is up to the government to do everything it can to stop it and to do this we need to know what is happening," Ms Collins said.