The Federal Labor Government is celebrating today after it struck a deal with the Coalition to achieve bipartisan support for its new Aged Care Act, which has finally been introduced to Parliament.
But the process is far from over, and with a 550-page document to sift through, the new Aged Care Act might raise more questions than it answers.
Among the key talking points is the fact many new aged care entrants will pay more for their aged care services. There’s also more funding and support to age at home, under the appropriately named Support at Home program which replaces Home Care Packages and the Commonwealth Home Support Programme (CHSP).
Here are the key points.
A new fee structure will see older people paying greater co-contributions for their care, except for direct care. The Government will fully fund direct care.
This is expected to impact three in ten new entrants receiving a full pension and three in four entrants receiving a part pension.
New entrants will pay a supplement if they have more than $238,000 in assets, $95,400 in annual income or a combination of the two, but the treatment of the family home will remain unchanged. Under current guidelines, the home exemption cap means its capped value is $201,231.20.
Aged care participants will unfortunately see the price of rooms go up, with providers able to charge up to $750,000 for a room. The current limit is $550,000. Residential aged care providers will be able to keep 2% of accommodation deposits from residents per year for five years.
Existing aged care participants, including those in residential aged care, receiving home care services or approved for home care but are waiting for a package, will be exempt from co-contributions. They will all be protected by a no worse off principle. Some people may even pay less for their aged care compared to now.
The introduction of Support at Home in July 2025 will see a whole host of changes for participants. There will be three distinct support categories – clinical care, independence and everyday living – with clinical care fully funded by the Government.
A lifetime cap means no one will contribute more than $130,000 to their non-clinical care costs. The cap currently sits at $80,000.
For every $1 full pensioners contribute to Support at Home, the government will contribute an average of $12.90. For every $1 part pensioners contribute to Support at Home, the government will contribute an average of $6.10.
Craig Gear, the CEO of the Older Persons Advocacy Network (OPAN), said they are digging into the Act to ensure the new legislation is fair and equitable.
”We understand the government will continue to be the prime funder of aged care and clinical care. While some people may be contributing to their aged care via a sliding scale, we are keen to understand the efficacy of the safety nets and other financial protections for older people,” he said.
“OPAN will collaborate with older people and the organisations that support them to provide feedback to ensure the best aged care outcomes for older people.”
Meanwhile, there will be:
A new palliative care pathway will also provide up to $25,000 for participants to spend their final three months at home.
The Government said $5.6 billion will be invested into aged care reform, with $4.3 billion going towards the Support at Home program.
However, it’s unclear whether any of this amount aligns with money already allocated to aged care in the 2024 Federal Budget. The Government also didn’t place a timeframe on how long this spending will occur; it could be over the next year or ten years.
It has claimed that the net impact of the changes is a $930 million spend over four years and a $12.6 billion save over the next 11 years.
Even though the new Aged Care Act was presented to parliament, it will take some time to be legislated. The opposition party, led by Peter Dutton and the Shadow Minister for Aged Care Anne Ruston, are likely to have more feedback.
This should come to light in a Senate inquiry, which is the next step for all legislation presented to the House of Parliament. There’s no timeframe on this progress, despite the Government’s intent to have the Act in effect from July 1 next year.
COTA Australia CEO, Patricia Sparrow, said it’s important for all Australians to have the time and opportunity to provide their feedback.
“Now that we’ve finally got past all the roadblocks stopping the introduction of the Aged Care Act, Parliament now needs to ensure that Australians have adequate time to scrutinise the legislation and provide feedback,” Ms Sparrow said.
“There’s no question that when it comes to aged care in Australia business as usual is unacceptable. Ambitious reform is required to fix the current aged care system to meet the needs of our ageing population and increasingly complex aged care needs and the Aged Care Act is central to making this happen.
“Australians of all ages, including older people, now need the opportunity to look into all the detail contained within the 550 pages to ensure that all of its elements are fair, transparent, easy to understand and equitable for all older Australians.”
Anyone interested in learning more about the new Aged Care Act can take a look at the summary sheet of the Aged Care Bill here.
