Aged Care Bill 2024 Passes Parliament: Key Reforms Explained
On Monday, 25 November 2024, the Aged Care Bill 2024 passed Parliament and now awaits Royal Assent. This legislation marks a significant shift in both Home Care and Residential Aged Care services, including fees and charges. The reforms stem from recommendations made by the Royal Commission into Aged Care Quality and Safety, aiming to enhance the quality and sustainability of Australia’s aged care system.
While many changes take effect on 1 July 2025, existing Residential Aged Care residents and Home Care participants will be grandfathered under current arrangements. However, some details remain uncertain, as parts of the subordinate legislation (known as the “Rules”) are still under consultation.
Key reforms
Residential Aged Care – Accommodation Reform
- 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 care on or after 1 July 2025
- Maximum accommodation price increases – amount that can be charged without Government approval increases from $550,000 to $750,000 from 1 January 2025 (note, this change has already been enacted by separate legislation)
Residential Aged Care – Ongoing Fees
- Hotelling Contribution – A new means-tested fee of up to $12.55 per day will be payable by residents where they enter care on or after 1 July 2025
- Non-Clinical Care Contribution (NCCC) – the current means-tested care fee will be replaced by a new means-tested NCCC of up to $101.16 per day when they enter care on or after 1 July 2025. A lifetime cap of $130,000 (or ma aximum of 4 years) applies
Home Care
- New classification system – 8 ongoing classifications for ongoing care replace the current 4 levels of Home Care packages – 2 short-term classifications for restorative care and end-of-life care
- New fee structure – clients will pay a set percentage of the cost of each service they receive. The set percentage is determined by the type of service (clinical, independence or everyday living) and the person’s age pension status (means testing)
Source: Colonial First State
FirstTech will be providing an analysis of the new Aged Care legislation in due course.
For any questions on how these changes may affect you or your loved ones, please do not hesitate to get in contact with our team.
(07) 5559 5760
