Aged Care Reform Summary

The government released the details of its proposed reforms for Aged Care last week.

The changes will take effect on 1 July 2025, with existing Aged Care residents and Home Care participants unaffected. The proposed legislation is believed to pass, as the opposition supports the fee structure.

Why is the Government Doing this? To reduce the pressure on aged care on the budget by making wealthier retirees pay more for their aged care needs and to minimise the wait time for in-home care, which currently has a waitlist of 68,000 people.

You can read the full media release here.

Residential Care

Accommodation Payment Changes

• Maximum Accommodation Price – The maximum Accommodation Payment amount that can be charged without approval will increase from $550k to $750k a room
• Retention Amount – Facilities will retain 2% p.a. (for up to 5 years) of lump sum accommodation payment
• Daily Accommodation Payments and Daily Accommodation Contributions – will increase with indexation twice yearly.

Ongoing Care Fee Changes

• Basic Daily Care Fee – The Basic Daily Care fee will remain at 85 per cent of the Age Pension
• Means Tested Care Fee – The Means Tested Care fee will be renamed the ‘Non-Clinical care’ fee
  • The Non-Clinical Care Fee will be paid by those with more than $503,000 in assets or about $131,000 in income (or a combination)
  • The maximum Non-Clinical Care Fee will be $101.16 per day and paid only for the first 4 years of care. This could equate to $36,923 pa with a maximum lifetime cap of $130,000 over four years,
• Hotelling Supplement of up to $12.55 per day will now be paid by residents with more than $238k in assets, $95,400 in income or a combination of both.
• No Changes to the assessment of the Family Home

In-Home Care

• 8 levels of support (as compared to 4 now)
• Government Funding of up to $78,000 pa (as compared to $60,000 maximum now)
• There will be 3 categories of service

1. 1. Clinical Care (Nursing)
   2. Independence Support, which includes Showering, Dressing, Medications
   3. Everyday Living Support, which provides for Cleaning, Gardening, Meals

While Clinical care is funded by the government, independence and everyday living support will require residents to fund some of the costs, as shown below