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KEY POINTS
- The government has announced major reforms to aged care after reaching a deal with the Coalition.
- Australians who choose to age at home will have access to greater support through a new system, Support at Home.
- Under the reforms, new entrants to residential care would be required to make larger means-tested contributions.
The federal government has announced a suite of aged care reforms, including more support for up to 1.4 million older Australians who choose to stay in their own homes.
Prime Minister Anthony Albanese announced the $5.6 billion package on Thursday after reaching a deal with the Coalition.
It also includes “essential” changes to residential aged care, such as requirements for new residents to make larger means-tested contributions.
The government said the reforms, which have bipartisan support and were broadly welcomed by the sector, would represent the “greatest improvement to aged care in 30 years”.
“This is about caring for the generation that cared for us,” Albanese told reporters in Canberra on Thursday.
“We will deliver historic aged care reforms to ensure the viability and quality of our aged care system and support the growing number of older Australians choosing to retain their independence and remain in their homes as they age.”
The government introduced the bill for a new Aged Care Act — the main law that sets out how the aged care system operates — to parliament on Thursday.
‘Older people won a great victory’
St Vincent’s Care Services, Australia’s largest not-for-profit aged care provider, said the agreement “smooths the way for the most impactful changes to aged care in a long time”.
“It will raise standards and ensure the system can be adequately funded to deliver the aged care our parents and grandparents deserve and need. Now and in the future,” chief executive Lincoln Hopper said.
Aged Community Care Providers Association chief executive Tom Symondson called it a “critical step … that many believed might never happen”.
“Today, older people won a great victory,” Symondson said.
Craig Gear, chief executive of the Older Person’s Advocacy Network (OPAN), said the bipartisan agreement “sends a very clear message to older people, their families and other representatives that their health, safety and wellbeing transcends party politics”.
Support to stay at home
Among the major changes is $4.3 billion towards a home care package called Support at Home, which would come into effect on 1 July next year.
According to government figures, the number of Australians in home care has increased fourfold in the past decade.
“We’ve heard the message from older Australians: they want support to stay in the homes and communities they love,” Aged Care Minister Anika Wells said.
“Support at Home will help around 1.4 million older Australians do just that, with shorter wait times, more levels of support, and funding for home modifications.”
The government says the new system would provide support for clinical care, such as nursing or occupational therapy, along with everyday living, such as cleaning or meal preparation, showering, getting dressed or taking medications (classified as independence costs).
Aged Care Minister Anika Wells said the reforms will help older Australians stay in their homes. Source: AAP / Mick Tsikas
The government has committed to covering all clinical costs, while individual contributions for everyday living and independence costs would be means-tested.
How much a person pays would be based on their income and assets.
Full pensioners would contribute 17.5 per cent of everyday costs and five per cent of those supporting their independence, while the percentages for self-funded retirees would be 80 and 50 per cent.
A lifetime cap would mean no one would contribute more than $130,000 to their non-clinical care, with every Support at Home contribution counted towards that cap.
Participants would also be eligible for up to $25,000 in additional support to spend their final three months of palliative care at home, rather than at a hospital.
According to a 2018 report from the Productivity Commission into end-of-life care, up to 70 per cent of Australians would prefer to die at home, but most will be in hospital.
Residential aged care: bigger contributions for some
The government has announced several “essential” changes to residential care to improve funding, viability and quality of the sector.
, published in March, found the sector would need $56 billion in funding to update existing facilities and build new rooms to meet growing demand.
It recommended Australians make a reasonable means-tested contribution to the cost of their care.
Under the reforms, new residents from 1 July next year would need to make larger means-tested contributions, based on their income and assets.
The government says around half of new residents would end up paying more for their residential aged care.
Fully supported residents won’t pay more, nor will seven in 10 full pensioners and one in four part pensioners.
People already in aged care facilities will also be spared under a ‘no-worse-off’ principle. That means those in residential care on 30 June 2025 will maintain their current arrangements until they leave care.
Other measures include increasing the maximum accommodation price for a room from $550,000 to $750,000. This would be indexed over time.
Providers will also be able to retain 2 per cent of refundable accommodation deposits per year, for up to five years.
The treatment of the family home will be unchanged.
Gear, from OPAN, said while the majority of older people it spoke to during consultations were happy to contribute to their care, within their means, they agreed any changes to funding must be supported by a “closely woven safety net”.
The network is keen to understand the efficacy of such financial protections.
“Older people are entitled to high-quality aged care regardless of their financial situation. It must be based on their assessed need rather than their ability to pay,” Gear said.
Protections under Aged Care Act
A new, rights-based Aged Care Act was a key recommendation from the Royal Commission into Aged Care, which handed down its report in 2021.
The new legislation includes a statement of rights for older Australians in aged care, and new duties to hold providers accountable, along with stronger regulatory powers “to protect people from harm”, a regulator with stronger investigative powers, and a new independent statutory complaints commissioner.
The legislation also introduces a compensation pathway for older Australians whose rights had been breached, along with new protections for whistleblowers who report misconduct.
“A rights-based Act, one that addresses the current power imbalance between older people and aged care providers, has been a long time coming,” Gear said.
But he expressed concern over the omission from the final legislation of criminal penalties for care providers who cause serious harm and neglect.
“We will need to be reassured that the Act contains sufficient protections for older people and deterrents for providers who do the wrong thing,” Gear said.
Under the reforms, the government would spend $930 million over four years, and save $12.6 billion over the next 11 years.
The annual growth of government spending for aged care is expected to moderate from 5.7 per cent to 5.2 per cent.
For every $1 contributed per person in aged care, the federal government will chip in $3.30 on average to residential care and $7.80 for Support at Home.
“These reforms are all about delivering better care for more people in a more sustainable way,” Treasurer Jim Chalmers said.
“It’s a step change in care, and a structural reform to the Budget.”
Advocates and providers are now urging for swift passage of the bill through parliament.
With additional reporting by the Australian Associated Press.