New Aged Care Bill introduced

The Government has introduced new Aged Care legislation to Parliament.

The new legislation includes major changes to both Home Care and Residential Aged Care, including fees and charges.

The new Aged Care Bill 2024 implements various recommendations made by the Royal Commission into Aged Care Quality and Safety and replaces the existing Aged Care Act 1997.

Most proposed reforms commence on July 1, 2025. Grandfathering applies to existing Residential Aged Care residents and Home Care participants.

The Government has stated that the new reforms have bipartisan support; however, they are draft legislation that has not yet passed.

Key announcements

As the legislation has only recently been released, we have only key announcements at this stage, including:

Residential Aged care – Accommodation Reform

  • Maximum accommodation price – amount that can be charged without approval increases from $550,000 to $750,000 from 1 January 2025
  • Introduction of RAD retention amount – aged care providers will retain 2% p.a. (up to a maximum 5 years) of a resident’s lump sum accommodation payment (RAD or RAC) where they enter care on or after 1 July 2025
  • Indexation of Daily Accommodation Payments (DAPs) – DAPs will be indexed twice per year for residents entering residential care on or after 1 July 2025
  • RADs to be phased out – subject to a review in 2029-30, RADs to be phased out by 2035

Residential Aged Care – Contributions

  • Basic Daily Care Fee – remains at 85% of single base rate Age Pension. From 1 July 2025, an additional means-tested Hotelling Supplement of up to $12.55 per day will be charged. Not payable by fully or partially supported residents
  • Means-tested care fee replaced by a new means-tested Non-Clinical Care Contribution – a new lifetime cap of $130,000 (or maximum of 4 years) applies
  • Family home – assessment remains unchanged

Home Care

  • New classification system – 10 new funding classifications replace the current 4 package levels
  • Participant contributions – will vary depending on the type of service received and the participants income and assets. No fees charged for clinical care.  Moderate fees for services in the independence category (eg personal care).  Higher fees for services in the everyday living services category (eg. domestic assistance)
  • Capped prices – prices for each service must not exceed price caps set by the government

Planning ahead is key, and some decisions can feel overwhelming. If you have any questions or need help planning for aged care, reach out to our team here, and we can guide you through the process.

 

Source CFS First Tech

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