After months of build-up, the arrival of the new Aged Care Act was swift and powerful on Thursday afternoon.
Many experts feared we wouldn’t even see the Act this year after the Coalition party raised last-minute concerns about several sticking points in the proposed legislation.
But after some hurried changes, reminiscent of a university student pulling an all-nighter to complete an assignment, the Federal Labor Government secured bipartisan support and dropped a 574-page document on the desks of Parliament.
The new Aged Care Act is historic for aged care in Australia. It’s the greatest change in the sector in 30 years and will define the next 30+ years for older Australians, service providers and aged care workers.
How will it affect you? Here are the winners and losers of the new Aged Care Act.
While the new Act may not be everything that was hoped for by providers – and those details will come to light as it’s sifted through – it provides certainty and assurance on future funding for the sector.
Once legislated, providers will have their clinical costs fully funded by the Government. There are opportunities to overcome losses in accommodation and everyday living expenses due to greater user contributions, new fee structures and higher accommodation prices. They can also keep 2% of refundable accommodation deposits every year for five years.
Aged care residents pay different fees depending on the outcome of a means assessment, and while this will change in several areas, homeowners can breathe a sigh of relief. The current home exemption cap limits any home’s assessable value at roughly $200,000, regardless of whether the home is valued at $250,000 or $1.2 million.
This will not change under the new Aged Care Act, meaning someone who moves into residential aged care could avoid paying a new means-tested fee (more on that later).
The shift to providing more support in the home means retirement communities could become a more popular choice for older Australians seeking the right balance between independence and easy access to aged care services. Independent living or assisted living options offered by residential aged care providers on co-located sites may also become a more common site.
A No worse off principle means existing residential aged care participants will not have to pay increased co-contributions and remain exempt from higher accommodation prices.
Home care clients will also benefit from the same No worse off principle. This includes anyone receiving a Home Care Package, on the National Priority System or assessed as eligible for a package. However, that will change once they move into residential aged care, when they will have to pay greater co-contributions and higher accommodation fees.
Changes to the current Home Care Package system are incredibly thorough with the new Support at Home program set to revitalise home care from July 1 2025.
The Government will be able to support 300,000 more participants over the next decade while reducing average wait times to three months by 2027.
The highest Support at Home classification will offer up to $78,000 of funding per year which goes directly to older people, not their service providers. Under the current scheme, individuals can only access up to $60,000 per year under the highest support classification. There will be better funding and access to home modifications, assistive technology and equipment as well
Dying at home has often been a challenge for people stuck in hospital aged care. Now, the Government will provide up to $25,000 in additional Support at Home funding for participants to spend their final three months at home.
The new Aged Care Act will provide a strong foundation for better quality care, increased human rights and true person-centred care. That is a big win for everyone accessing aged care.
However, there’s no ignoring the fact older people will be paying more for their aged care in the future.
A new home care category structure sees all services classified as either clinical care, independence supports (showering, medication, personal care) or everyday living (cleaning, gardening, meals).
All clinical care will be Government funded. However, self-funded retirees will cover 50% of their independence support and 80% of their everyday living services.
Part pensioners or health card holders will pay up to those amounts, depending on their level of support, while full pensioners will only pay 5% for independence support and 17.5% of their everyday living expenses.
Just like their home care counterparts, there will be additional costs for future aged care residents. The most notable change is rooms can be priced up to $750,000, a major jump from the existing $550,000 cap.
Residents with over $238,000 in assets, $95,400 in income, or a combination of both will also pay a $12.55 hotelling supplement every day for catering, cleaning and gardening. Another non-clinical care fee of up to $101.16 per day (for the first four years of care only) will be paid by people with over $500,000 in assets, over $130,000 in income, or a combination of both.
One of the big wins by the Coalition party was the removal of criminal penalties for those deemed responsible persons working in aged care guilty of any wrongdoing. Instead, the penalties have been reduced to civil only.
However, while most people who fall under this definition are executives or directors, anyone responsible for the “overall management of nursing services” or “is a registered nurse” is also included in the new definition.
This means registered nurses who breach any duties or requirements of the Act may incur penalty units, which equate to a monetary value. The Government’s penalty unit value as of July 2023 was $313 per unit.
Rural and remote Australians should benefit from a shift to an aged care system that promotes care in the home. Yet they are also the people who currently lack the same access to aged care services because of thin markets and costlier services.
While the government provides additional funding to regional aged care service providers, the lack of qualified staff and logistical challenges mean that the choice and availability of services are still limited.
The government is spending $5.6 billion on aged care reform, with $4.3 billion going towards Support at Home/home care improvements.
They expect a $930 million spend over the next four years and a $12.6 billion save over the next 11 years. It’s far too soon to make a judgement call on whether those projections will prove accurate or not.
We wait in anticipation to see how the new Aged Care Act progresses through Parliament. It will be dissected in an upcoming Senate inquiry (date to be announced). This is when the Coalition party will voice their concerns.
Aged care advocates, older people and industry leaders are also likely to share their feedback in the hope of influencing change before the Act is legislated. The Government intends for the Act to be legislated and in effect from July 1, 2025.
So, the Coalition think the care of older Australians isn’t anything to worry about. If they are not cared for properly, put in danger, abused in any way, ripped off, ignored, it’s not a problem. We’ll just give you a slap on the wrist. I am so glad they weren’t in charge of overseeing these changes from the beginning. I’m not so happy with the government either, letting these uncaring morons get away with diminishing the need for proper and swift penalties for those in positions of power over our elderly. Sad and disgusting.