Navigating the new Aged Care Act: Key impacts for providers

Australia

UPDATED: 26/6/2025

Update: The Aged Care Act is now set to begin on 1 November 2025

Originally scheduled for July, the Aged Care Act has been delayed to give providers more time to get ready. This extra runway is your chance to prepare for new legislation, streamline processes, and free up staff time through smarter, more efficient systems.

New Aged Care Bill announced

In 2024, the government announced a major aged care reform package backed by bipartisan support.

Key changes affecting home and residential care providers include:

$5.6 billion investment in aged care reform
Expansion from four to ten funding categories for home care
10% cap on care management fees for home care providers
Increase in the maximum cost of residential aged care rooms by $200,000, with indexation and means testing
Residential care providers to receive 2% per year from refundable accommodation deposits over five years for quality maintenance

This blog breaks down what’s changing, what it means for your business, and how to move forward with confidence.

Home care

We have seen that most funding will be directed to the home care sector, specifically Support at Home. Here’s a breakdown of key changes.

New funding model and eligibility

Support at Home replaces Home Care Packages from 1 November 2025
Existing package recipients will keep their funding level
People on waitlists will receive equivalent budgets under a “no worse off” approach
Participants will be placed into one of ten classifications (up from four):
- Eight for Support at Home
- Two for short-term restorative and end-of-life care

Services and categories

Services will be grouped under defined categories:
- Clinical care
- Support for independence
- Everyday living (e.g. cleaning, meals)
Budgets will be allocated quarterly, with savings of up to $1,000 or 10% carried over
The Assistive Technology and Home Modifications Scheme (AT-HM) will separately fund tech and home adjustments

Service pricing and funding

Prices for services will be capped, based on advice from the Independent Health and Aged Care Pricing Authority
Care management fees will be capped at 10%, using a pooled funding model
Participants will contribute to some service costs, depending on:
- Income and assets
- Type of service

Contribution levels by service type:

Clinical services (e.g. nursing): fully funded
Independence services (e.g. personal care): moderate contribution
Everyday living services (e.g. gardening): highest contribution

Extra support pathways

Short-term restorative care will double in availability, offering up to 12 weeks of allied health
Participants with less than three months to live will get priority access to higher funding, including an extra $25,000 over 12 weeks
Grant funding will be available for providers in rural, remote, or diverse communities

What this means for you

Support at Home will bring major changes to how you operate. Here’s what to focus on:

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Your systems must be ready. The platform you use for scheduling, billing, and documentation needs to be fully functional and tested before November 1.
Workload is expected to increase. More detailed documentation, billing rules, and service tracking will require robust, streamlined processes.
Automation is critical. The more your software can handle automatically, the more capacity your staff will have for care and compliance.
Start preparing your team. Build a training plan to help staff understand the changes, new classifications, and care categories. Begin identifying any workforce changes you may need.
Stay informed. Stay close to updates and be ready to adapt as more detail emerges.

AlayaCare has been NOI certified by Services Australia. This means AlayaCare is one of the first software providers with technical approval to help aged care organisations receive funding and submit claims under the new Support at Home model.

Residential care

Significant reforms are also underway for residential aged care providers. Here’s a summary.

Care minutes and workforce flexibility

From 1 October 2024, required care minutes increased to 215 minutes per resident per day, including 44 minutes by a registered nurse (RN)
Up to 10% of RN minutes can be provided by enrolled nurses (ENs), offering some flexibility

Funding and resident contributions

Aged care homes can draw 2% per year from refundable accommodation deposits (RADs) for facility maintenance (for five years)
Room price caps will increase and be indexed over time
A non-clinical contribution capped at $101.16/day will replace the current means-tested care fee
Clinical care (e.g. nursing) will be fully government-funded
A $130,000 lifetime cap will apply to resident contributions
From 1 November 2025:
- Existing residents won’t be required to pay more
- New residents will be subject to larger, means-tested contributions
For every $1 contributed by a resident, the government will contribute an average of $3.30

New standards and protections

New Quality Standards and stronger laws to protect older Australians
The Aged Care Quality and Safety Commission (ACQSC) will have stronger powers, including civil penalties
A new Complaints Commissioner will provide independent oversight
Whistleblower protections will be expanded
Providers must act in line with the Statement of Rights

What this means for you

The upcoming changes in residential aged care will impact how you roster, bill, and deliver services. Here’s what to focus on:

Billing rules are changing. You’ll need to apply new resident contribution rules, daily caps, and pricing limits — all of which require updates to your billing processes.

Automation will ease the pressure. With added admin tasks and compliance requirements, your systems must be streamlined to reduce manual work and support accuracy.

Your workforce needs support. Staff should feel confident in your systems and understand the new care standards. Build in time for training and operational adjustments.

You need to stay compliant. Registration, reporting, quality standards, and workforce screening are all tightening under the new Aged Care Act. Make sure your systems are keeping up.

We’re continuing to update our platform to ensure it meets these new residential care requirements and supports you through the transition.