The Australian Government has announced a sweeping set of aged care reforms designed to deliver more support for up to 1.4 million older Australians choosing to stay in their own homes. This $5.6 billion package, unveiled by Prime Minister Anthony Albanese, represents the most significant overhaul to aged care in 30 years, introducing crucial changes to both home care and residential aged care. These reforms have bipartisan backing and were broadly welcomed by the sector.
Supporting Older Australians to Age at Home
With an increasing number of older Australians preferring to remain in their homes as they age, the government is making a substantial $4.3 billion investment into a new system of home care, named Support at Home, set to launch on 1 July 2025. This program will enable more older people to stay independent in their homes and communities for longer.
By 2035, around 1.4 million Australians are expected to benefit from this initiative, receiving tailored support that ranges from clinical care, such as nursing and occupational therapy, to assistance with daily living activities like shopping, cleaning, and meal preparation. The Government will cover all clinical care costs, while contributions towards independence and daily living costs will be means-tested based on personal income and assets.
The Support at Home program also includes a lifetime contribution cap, meaning no one will pay more than $130,000 for their non-clinical care, regardless of how long they remain in the system.
Essential Reforms to Residential Aged Care
While the Support at Home program is a headline feature, the reforms also bring important changes to improve the funding, viability, and quality of residential aged care.
The Aged Care Taskforce highlighted that by 2050, the residential aged care sector will need $56 billion in capital funding to build and upgrade facilities for a rapidly ageing population. With more than double the number of Australians aged over 65 expected by that time and those aged over 85 set to triple, it’s clear that current funding models aren’t sustainable -with approximately 46% of providers reporting losses in 2022-23.
To address this, the government has introduced a range of reforms, including:
- Larger means-tested contributions from new entrants to residential aged care.
- A higher maximum room price that will be indexed over time.
- The retention of a portion of refundable accommodation deposits by providers.
Importantly, the treatment of the family home will remain unchanged, providing reassurance to many older Australians and their families.
Despite these changes, not all new residents will contribute more. Half of all new residents won’t face higher costs, with fully supported residents and a majority of full pensioners protected from increased contributions.
For every dollar that older Australians contribute to their residential care, the government will provide an average of $3.30, ensuring that care remains affordable for those who need it.
Protecting Current Residents: The No Worse Off Principle
A key element of the reforms is the no worse off principle, ensuring that Australians already in residential aged care or home care will not be asked to contribute more than they currently do. Those already in care by 30 June 2025 will maintain their existing arrangements until they leave, offering peace of mind and financial certainty.
Safeguarding the Future of Aged Care
The 2024 reforms aim to secure the future of aged care in Australia, balancing increased investment with fiscal sustainability. By 2034-35, these changes are expected to moderate the rapid growth in aged care spending, while still increasing government investment in the sector year on year. The government will continue to cover 100% of clinical care costs and will contribute 73% of residential care costs and 89% of home care costs overall.
New Legislation to Protect Older Australians
Alongside the financial reforms, new legislation will introduce stronger protections for older Australians in aged care. The updated Aged Care Act will include:
- A Statement of Rights for older Australians, with an obligation on providers to uphold those rights.
- Stricter regulations and civil penalties for breaches of standards.
- Enhanced whistleblower protections.
- Stronger investigative powers for the regulator and the introduction of an independent statutory Complaints Commissioner.
Preparing For Change: How Acredia Can Help
As residential aged care providers prepare for these significant changes, adapting to new regulatory and funding structures will be crucial. Providers must ensure they have the systems in place to meet the new compliance requirements, deliver high-quality care, and maintain financial viability.
At Acredia, our software is designed to help aged care providers easily navigate these reforms. Our modular platform allows for seamless compliance tracking, operational efficiency, and enhanced transparency, ensuring your facility meets new quality standards while optimising daily operations.
These reforms represent a new era in Australian aged care, with both opportunities and challenges for providers. By staying ahead of these changes and implementing robust systems for compliance and care delivery, aged care organisations can continue providing high-quality care to residents while meeting the evolving demands of the sector.
To find out more about how Acredia can support your aged care organisation, book a demonstration or visit our resources page for more information.
