Broad-sweeping funding changes have come into action in a bid to provide a more “financially sustainable” industry which critics have warned could increase costs of basic care.
The Australian Parliament passed the Aged Care Act 2024 in November last year, before it took effect on Saturday.
The act will change the way older Australians receive services in their communities, aged care, and their own homes.
Support at Home to replace flat fees
One of the largest changes will affect how elderly Australians access care at home, with the Support at Home program designed to improve home care conditions without the need for aged care facilities.
Receivers of care will begin paying only for care they receive instead of a basic, daily flat fee.
That fee amounted to $65.55, or 85 per cent of the basic-level age pension.
Services will, however, cost more.
The highest level of care and support comes is delivered with a budget of $15,860, while service fees can be deducted from that amount.
Providers will be allowed to charge no more than 10 per cent of the budget for administration and management fees.
The lowest tier of at-home care comes with a budget of $2,750.
Clinical support services, including nursing and physiotherapy, will fall under the home care package.
However, other services will be means tested, and contributions will be required for personal care, assistive technology and modifications to the home.
Part-pensioners, pensioners, and self-funded retirees must pay between five per cent and 50 per cent of their service provider’s fee for personal care, an umbrella term which could include showering.
Day-to-day living services, including gardening, is set to attract a higher personal fee.
The home packages are capped at present, leading to a waitlist bottleneck.
The government provided 20,000 spots in October, with an additional 63,000 places due by June next year.
Accomodation providers to pocket up to 10 per cent of deposits
The act also included changes to refundable accommodation deposits, allowing accommodation providers to keep a small amount of previously fully refundable deposits.
Aged care accomodation providers will be entitled to net two per cent of the deposit for each year up to five years – 10 per cent for the term.
The act will not change providers’ ability to draw on daily care fees from lump sum deposits.
The deposit cap, now indexed to inflation annually, grew from $550,000 to $750,000 at the beginning of the year.
The total providers can pocket stands at about $75,000.
Older Australians able to “opt in” to higher service fees
Aged care residents are now able in to choose to pay a fee for “higher services” under the legislation.
The higher everyday living fee will allow older Australians to pay more for higher standards of living.
The higher standards option could include newspaper subscriptions, weekly deliveries of wine, and access to streaming services.
The option can be provided to residents as a bundle, however, residents are not able to be charged higher if they choose to pay for each service separately.
More financial means testing
The act will also invite more means testing for fees from the beginning of November.
First, the daily hotelling supplement, which was previously paid for by the government, will be tested against an aged resident’s financial means.
That fee, capped at $22.15 per day, comes on top of the daily care fee, and will cover everyday living expenses, including laundry and catering.
Non-clinical care payments cease after four years, from which point the government will cover the contribution.