What the new aged care reforms mean for Australians
Updated on 19 November 2024
In September 2024, the Australian Government introduced a new Aged Care Act, expected to commence on 1 July 2025. With an ageing population and unsustainable aged care system, the reform follows recommendations from the Aged Care Taskforce to build a system that can better meet future needs.
The Aged Care reform strengthens the Aged Care Quality Standards, aiming to support older people to live in their homes longer and improve funding arrangements for residential aged care. At its heart, the reform will see more support provided to older Australians no matter their situation and a new funding model that will support much needed growth in the aged care sector.
Read below a breakdown of the proposed changes.
Please note: the details of the act are yet to be finalised and below information is based on the draft act currently before parliament.
In this article:
- Aged care assessments changes
- Home care changes: the new Support at Home program
- Funding and costs under the new Support at Home program
- Residential aged care changes
- Wesley Mission Queensland customers
- Get more information about the upcoming reform
Aged care assessment changes
- A Single Assessment System will replace all aged care assessments to shorter wait times and make it easier for people to navigate to receive support.
The Regional Assessment Service (RAS), the Aged Care Assessment Teams (ACATs) and the independent Australian National Aged Care Classification (AN-ACC) will be replaced by the Single Assessment System. The first stage of its implementation has already started, we the introduction of the new Integrated Assessment Tool (IAT) in July 2024. - There are no changes to eligibility requirements.
- There are no changes to referrals to urgent services.
- First Nations assessment organisations will be introduced progressively from 1 July 2025.
Home care changes: the new Support at Home program
- The Support at Home program will replace Home Care Packages (HCP) and Short-Term Restorative Care (STRC) programs from July 2025, and the Commonwealth Home Support Programme (CHSP) from July 2027.
- A defined service list will be introduced, with 03 categories of support:
o Clinical care (such as nursing and physiotherapy)
o Independence (such as such as personal care, respite, transport and social support)
o Everyday living (such as cleaning, meals delivery and gardening)
- 10 levels of support will replace the 4 broad Home Care Package levels. This includes:
o 8 ongoing classifications
o 2 short term classifications: Restorative Care Pathway and End of Life Care Pathway.
Restorative Care Pathway: it will double the number of places and increase the maximum duration of support of intensive allied health care, from 8 weeks to 12 weeks.
End of life Care Pathway: seniors with less than 3 months to live and who wish to stay at home, will be given priority access to the dedicated funding classification for additional home care services ($25,000 for 12 weeks).
- New schemes offer faster access to assistive technology and home modifications.
o A separate funding scheme will allow upfront access to assistive technology (such as walkers and wheelchairs) and home modifications with up to $15,000 to make a home safer. This means people will no longer have to save their package funds for these supports.
o The scheme will have a defined list of the assistive technology and home modifications that can be funded.
Funding and costs under the new Support at Home program
- No-cost clinical services: the government will cover 100% of all clinical care costs (essential medical services such as nursing and physiotherapy).
- Mandatory individual contribution: all individuals, including full pensioners, will pay more for non-clinical services, such as personal support and daily living assistance.
- Means-tested contributions: individual contributions will be based on type of services received, as well as the person’s income and assets.
- Capped prices: prices for each service must not exceed price caps set by the government based on the advice of the Independent Health and Aged Care Pricing Authority.
- Increased funding: maximum funding amount will increase from $61,000 to up to $78,000 per year.
Below is the indicative budget amounts for each ongoing classification, as shown in the Department of Health and Aged Care website on the 19 Nov 2024:
| Classification | Quarterly budget | Annual amount |
|---|---|---|
| 1 | ~$2,750 | ~$11,000 |
| 2 | ~$4,000 | ~$16,000 |
| 3 | ~$5,500 | ~$22,000 |
| 4 | ~$7,500 | ~$30,000 |
| 5 | ~$10,000 | ~$40,000 |
| 6 | ~$12,000 | ~$48,000 |
| 7 | ~$14,500 | ~$58,000 |
| 8 | ~$19,500 | ~$78,000 |
The indicative budget amounts for home care recipients transitioned to Support at Home are:
| Transitioned home care recipients | Quarterly budget | Annual amount |
|---|---|---|
| 1 | $2,708 | $10,833 |
| 2 | $4,762 | $19,049 |
| 3 | $10,365 | $41,460 |
| 4 | $15,713 | $62,853 |
- Participants will receive a quarterly budget.
They will be able to save up to $1,000 or 10% (whichever is higher) of the value of their quarterly budget across quarters, if available.
- Remote locations: Grant funding will be available to help service providers in thin markets, such as rural and remote locations, and providers supporting diverse groups.
- Existing aged care clients - Packages: as per the Government’s ‘no worse off’ principle, people who already have an Aged Care Package (HCP) on 30 June 2025 will maintain the same level of funding and retain any unspent funds when transitioned to Support at Home program.
- Existing aged care clients - Contributions: people who, on 12 September 2024, were either receiving a package, on the National Priority System, or assessed as eligible for a package, will not pay more when transitioned to Support at Home program.
o When moving to residential care, they will stay on the existing contribution arrangements unless they opt to move to the new program. Changes to accommodation payments would still apply, since accommodation payments are an agreement negotiated between the resident and their provider.
Residential aged care changes
- A new means-tested services contribution will be introduced, indexed twice a year, in line with inflation.
o The new means testing only applies for residents entering care from 1 July 2025.
o Residents will contribute to non-clinical service costs, such as personal care and the Hotelling Supplement (cleaning and laundry).
o All clinical care will be fully subsidised by the government, such as nursing.
o Residents who exceed the Government’s threshold will contribute 7.8% of assets over $238,000 or 50% of income over $95,400 (or a combination of both), up to a daily limit of $101.16.
o A lifetime cap on contributions will be introduced. Individuals will stop making any payments when they reach $130,000 in total contributions, or after 4 years in residential care, whichever occurs first.
o Contributions made in Support at Home before they enter residential aged care will count towards the $130,000 lifetime cap.
- Room prices cap will rise from $550,000 to $750,000 from July 2025, also indexed over time. The cap is set on the Refundable Accommodation Deposits (RADs), which is the maximum "market price" an aged care home can charge without government approval.
- An exit fee will be introduced, calculated at 2% a year of the person’s RAD*, for up to five years. So if your stay for five years or more, 10% will be deducted when you leave.
* RAD is a lump-sum payment that residents may pay when entering residential aged care in Australia. It covers the cost of accommodation in the aged care facility. The RAD is currently fully refundable when the resident leaves the facility or passes away, minus any agreed deductions. In the new Age Care Act, there will be a 10% exit fee on RAD.
- The Basic Daily Fee (BDF) will not change. Everyone will pay the BDF, which is set at 85% of the age pension.
- For people in residential aged care on 30 June 2025, their contributions will not change, as per the government’s ‘no worse off’. Costs will be the same - or less - after the reforms.
- If you move from home care to an aged care home after July 1, 2025, the changes to accommodation payments will apply, but you will have the choice of staying on the existing contribution arrangements or moving to the new ones.
Wesley Mission Queensland customers
- Existing Home Care Package clients: as per the Government’s ‘no worse off’ principle, from 1 July 2025 you will move to the new Support at Home program and keep your level of funding plus any unspent funds.
- New Home Care Package clients: there’s no need to wait for the new system. You can start a conversation with us today by calling 1800 448 448 or click here to enquiry online.
- Aged care residents (nursing homes) : the new contributions and accommodation arrangements will only apply to new entrants to residential aged care from 1 July 2025. Everyone in residential care on 30 June 2025 will maintain their arrangements until leaving care.
Get more information about the upcoming reform
- Support at Home FAQS (PDF)
- New Aged Care Act
https://www.health.gov.au/our-work/aged-care-act
- About the aged care reforms
- About the Support at Home program
https://www.health.gov.au/our-work/support-at-home/about
- Support at Home – Fact sheet
https://www.health.gov.au/resources/publications/support-at-home-fact-sheet
- About the Single Assessment System for aged care
https://www.health.gov.au/our-work/single-assessment-system-for-aged-care/about
- Residential care contributions
Ageing well with WMQ
Our compassionate approach is what makes us extra special!
Experienced aged care at home and in our facilities. Compassionate, respectful, and cherished moments for your loved ones.