In the next 40 years, the number of Australians aged over 65 is expected to more than double while the number of people aged over 85 is predicted to triple in that time.
Since the 2021 report of the Royal Commission into Aged Care Quality and Safety, aged care funding and services have undergone significant changes, and this year is no different.
Starting on 1 July 2025 a host of new programs and improvements for will roll out in the aged care sector. Already, there have been several announcements this year, covering wage rises for aged care workers and nurses, and an increase in government funding for residential aged care accommodation.
In one of the most significant changes, the new Aged Care Act begins on 1 July. The Act aims to ensure the viability and quality of aged care. A report by the Aged Care Taskforce last year calculated the residential aged care sector will need $56 billion by 2050 to upgrade facilities and build more rooms.
Current funding arrangements aren’t working. In the 2022-2023 financial year, nearly half of all accommodation providers operated at a loss. To help, the government is delivering approximately $300 million in federal grants to accommodation providers to help with capital works upgrades.
Additionally, to improve the viability of the facilities, new measures are being introduced, including larger means-tested contributions from new entrants, and a higher maximum room price that is indexed over time.
Aged Care Minister Anika Wells says half of new residents will not contribute more under the new consumer contributions. “For every $1 an older Australian contributes to their residential aged care, the government will contribute an average of $3.30,” says Wells.
Support at Home
The Aged Care Act also aims to support more people who want to stay in their own homes as they grow older. The federal government is investing $4.3 billion in a new Support at Home program, which replaces the Home Care Packages and the Short-Term Restorative Care programs.
There’ll be more than 300,000 places available over the next 10 years and a shorter waiting period for Support at Home, and there’s a goal to simplify and improve the assessment process, making it easier to access different services as needs change.
Similar to the Home Care Package, Support at Home will provide:
- clinical care, such as nursing and occupational therapy
- help with maintaining independence including showering, dressing and taking medications
- support for everyday living tasks such as cleaning, gardening, shopping and meal preparation.
The government will cover 100 per cent of clinical care costs, while Support at Home recipients will to their independence and everyday living expenses. The amount they pay will be calculated using the Age Pension means test, based on their income, assets and the level of support they need Those in the highest classification, with the most funding, will receive a package of services worth $78,000 per year. Additional funding will also be available for assistive technology and home modifications, as well as end of life care.
A new cap on contributions will also apply. No one will pay more than $130,000 in their lifetime – whatever their means or length of care at home or in residential accommodation.
Refunding deposits
The new Aged Care Act also requires aged care accommodation providers to refund residents’ lump sum deposits within 14 days if they move to another facility or pass away. Interest must be paid on the lump sum until the amount is repaid. As before, some deductions are permitted provided they were included in the original agreement.
No disadvantage
For those already receiving home care packages or in aged care accommodation, the government says a ‘no-worse-off’ principle will provide certainty that they won’t have to pay more under the new laws.
Next steps
Whether it is you or a loved one who is considering moving into aged care, it can be an emotional time. Contact your trusted Nexia adviser if you have questions about the changes being implemented or if we can help you to plan for your future.
