Aged Care Reforms

The recent Aged Care Taskforce Report showing that 46% of Aged Care providers made a loss during the 2022-2023 financial year.

The Australian Government has proposed significant changes to aged care costs, aiming to make the system more sustainable and equitable.

The reforms are designed to ensure that those who can afford to pay more do so, while still providing necessary support to those with fewer financial resources.

These changes are expected to take effect from July 2025, pending legislative approval.

Here’s a summary of the key changes:

In-Home Care

1. Support Levels: The number of support levels will increase from four to ten, with 8 ongoing service levels combined with restorative car and end of life care.  The maximum Government funding will grow to $78,000 per year, compared to the current $60,000.
2. Cost Sharing: Costs will be divided into three categories: clinical care, independence supports, and everyday living supports. The government will cover clinical care costs, but individuals will pay more for independence and everyday living supports based on their financial means. Current Home Care Packages are 95% funded by the Government and 5% funded by the recipient.  It is anticipated to be 11% recipient / 89%Government funding moving forward.
3. Regulated Pricing: For the first time, the maximum price of home care services will be regulated to prevent facilities overcharging.
4. Additional Support: A $25,000 payment will be available to help recipients spend their final three months at home as a form of palliative care (end of life care), and a new 12-week program (restorative care) will assist those recovering from illness or injury.

Residential Care

1. Fee Structure: The basic daily fee, set at 85% of the Age Pension, will remain unchanged. However, the means-tested fee will be renamed the “non-clinical care” fee, covering costs like food and amenities1.
2. Accommodation Charges: The maximum accommodation charge will increase from $550,000 to $750,000 per room. Providers can still seek approval to charge more, and 2% of the deposit can be retained by the facility annually, capped at five years.
3. Hotelling Supplement: A $12.55 per day supplement, currently paid by the Government, will now be paid by residents with more than $238,000 in assets or $95,400 in income.

Financial Impact

• All ‘fully supported’ residents will not contribute more
• 7 in 10 full pensioners will not contribute more
• 1 in 4 part-pensioners will not contribute more