What does the new Aged Care Act mean for you?

The recent government announcements answered some questions, while leaving some lingering. 

We’ve summarised the announcements, delved into the implications for your business, and outlined what you need to consider to ensure you’re ready for the changes coming in the new year. 

This article will continue to be updated as we receive more information from the government. 

Two weeks ago, Prime Minister Anthony Albanese, Aged Care Minister Anika Wells and Treasurer Jim Chalmers announced the new Aged Care Bill 2024 after receiving bipartisan support. 

The major announcements related to home and residential care providers were: 

• There will be $5.6 billion invested in a reform package 
• Support at Home was confirmed to commence on 1 July 2025. $4.3 billion of the overall investment will be dedicated to this 
• There will be ten funding classifications for Support at Home, an increase from the current four with Home Care Packages 
• Care management fees will be capped at 10% for home care providers 
• The maximum cost of rooms in residential facilities will increase by $200,000, and contributions to the residential facilities will be means-tested 
• For five years, residential care providers will take 2% a year of a refundable accommodation deposit to maintain the quality of their facilities 

Last week, we learned more about the announcements through a series of webinars. However, some questions about the specifics of the changes remain unanswered. 

In light of these and other announcements, there are many changes that you, as a provider, must now consider or implement well before the 1^st of July. 

This article is an overview of the significant changes for providers, what they mean for your business, and how you can ensure you’re prepared for them all. 

And, importantly, how to plan for uncertainty amidst the gaps in the current information. 

Home care changes

We have seen that most funding will be directed to the home care sector, specifically Support at Home. 

This is what we know so far about the changes: 

• The Support at Home program will commence on 1 July 2025. 
• Existing Home Care Package participants will retain their funding level under the new program, and those waiting for packages will receive equivalent budgets in a “no worse off” principle. 
• Providers will draw 10% of participants’ budgets for care management to meet their needs and adjust services based on changing conditions. This is a pooled funding approach, meaning the 10% contribution of all participants will be pooled to allow care management to be delegated as needed to each participant.
• Participants will be assessed into one of ten new classifications, a shift from the current four Home Care Package levels. Eight of these will be ongoing classifications, and two will be for short-term restorative care and end-of-life care pathways.
• A defined list of services will include clinical care, support for independence, and everyday living assistance like cleaning and meals. 
• Participants will receive quarterly budgets based on their classification and can save up to $1,000 or 10% across quarters. 
• The government will cap service prices based on recommendations from the Independent Health and Aged Care Pricing Authority. 
• Participants will have upfront access to technology and modifications through a separate, funded scheme. 
• The program doubles the available places for short-term restorative care, offering up to 12 weeks of intensive allied health support. 
• Participants with less than three months to live will receive priority access to higher funding for home care, with an additional $25,000 for 12 weeks. 
• Grant funding will be available for service providers in rural and remote areas or providers serving diverse populations. 
• Participants will contribute to the cost of some services, with rates based on their income, assets, and the type of service received. 

Contributions will be based on the service type: 

• Clinical services (for example, nursing) will be fully funded by the government. 
• Independence services (for example, personal care) will have moderate contributions. 
• Everyday living services (for example, gardening) will have the highest contribution rates.

What does this mean for you as a provider? 

The most critical consideration is to ensure that you’re prepared for the changes well in advance of them coming into force. 

Although we have some months before they will commence, the process of getting up to speed will take almost as much time. Specifically, the system your business is using must be fully operational in the months leading up to July 1^st. 

We know already that the changes will shift the operational and manual tasks for all providers, with some tasks increasing as the level of scheduling, billing and documentation increases.  

At AlayaCare, we have already commenced enacting necessary changes to our software to ensure full compliance to the new government requirements. This will continue to our focus as we receive more information from the government about the specifics of the changes as many gaps in the new program remain. 

One such gap is understanding how the government proposes to address current and future staff shortages in this sector. These will only become more evident with increased participants in the Support at Home system. 

While this remains unclear, one thing is certain: your technology must be automated as much as possible. This will help your staff meet the increasing demands that will result from these changes. 

Ensuring the software you’re using is streamlined, efficient and optimised is one of the ways you can prepare now to avoid strain on your organisation later. 

Of course, there are many other ways your organisation can prepare now before knowing the full extent of the Support at Home nuances. 

Establishing a staff training schedule in the months leading up to the implementation of Support at Home is one of the ways you can start to prepare your team for the changes. Additionally, considering the implications for staff, and any staff changes required, can begin now. 

The most important factor is to remain informed, keeping abreast of the specifics as they’re released, and leaving sufficient time to enact any necessary changes your organisation needs. 

Residential care changes

From a Residential Care perspective, some of the changes are also significant for providers. Some of the major changes are: 

• From October 1, 2024, the required care minutes in residential aged care will increase to an average of 215 minutes per resident per day, including 44 minutes provided by a registered nurse. Providers will also have the flexibility to allocate up to 10% of these RN-specific minutes to enrolled nurses, which can help with workforce challenges. 
• For five years, residential care providers will take 2% a year of a refundable accommodation deposit to maintain the quality of their facilities 
• New Quality Standards will be implemented to ensure high-quality care in residential aged care facilities.  
• There will be new laws enacted to protect older Australians in aged care, with stronger powers to investigate facilities, and civil penalties for breaching standards 
• Australians already in residential aged care as of 30 June 2025 will not be required to contribute more. The new funding arrangements will only apply to new entrants from 1 July 2025 in a “no worse off” principle.  
• People entering residential aged care facilities from 1 July 2025 will be required to make larger means-tested contributions. 
• The maximum allowable price for rooms will be increased and indexed over time. 
• A non-clinical contribution capped at $101.16 a day will replace the means-tested care fee.  
• Clinical care will be fully funded by the government (for example, nursing care). 
• A $130,000 lifetime contribution cap will apply for each person. 
• For every $1 an older Australian contributes to their residential aged care, the government will contribute an average of $3.30. 
• The regulatory body will have stronger powers to protect residents from harm and ensure compliance with new rules. 
• Stronger whistleblower protections will be introduced to safeguard those who report misconduct or issues in the aged care system. 
• A new, independent statutory Complaints Commissioner will be established to oversee complaints and ensure transparency in the system 

What does this mean for you as a provider? 

The recent government webinar, Residential aged care funding reform update, identified that some critical elements will be enacted in the next few weeks. 

Specifically, the stipulation that from October 1 2024, residential aged care required care minutes will increase to an average of 215 minutes per resident per day. Additionally, care minutes must be updated in all rostering systems to account for the increased minutes in care provision, including the 44 minutes required to be provided by a registered or enrolled nurse. 

Funding is also being adjusted to support providers in meeting new regulatory and compliance requirements, particularly around the standards of care, food services, and reporting obligations. This impending deadline requires providers to update their billing system in a matter of weeks to be ready for the next billing cycle. This short deadline requires providers to immediately review their operating systems, ensuring that they’re complying with the new ways of working to meet the October 1^st deadline. 

When ensuring your systems and processes are set to manage these new ways of working, you can start the process of a deeper analysis of your technology to ensure it meets other requirements stipulated by government changes due to the new Aged Care Act.  

Similarly to the home care space, now is the time to review your operations and ensure that wherever possible, processes are streamlined and efficient to manage the potential for an increased administrative load that the changes may bring. 

Importantly, it’s integral that your staff feel comfortable and confident using these systems. Organising staff training sessions in the days and months leading up to the new changes being implemented may support them to transition more easily. 

In addition to this, the government has specifically outlined some of the other implications for aged care providers, and what businesses can do to prepare: 

• “Providers will have to ensure their actions are guided by the Statement of Rights. 
• Providers will have to register with the Aged Care Quality and Safety Commission (ACQSC) (with transitional arrangements in place for existing providers) and have any residential care homes approved. 
• Providers who deliver NATSIFAC and CHSP services will be registered under the new Act and regulated by the ACQSC. 
• The new Act will provide a revised set of provider obligations including conditions on registration. 
• Strengthened Aged Care Quality Standards will apply to some categories of providers. 
• Providers will have to comply with new financial and prudential standards. 
• Providers will have to ensure their workforce meets revised worker screening requirements. 
• Providers will be subject to new statutory duties. 

Like in the home care sector, the best way to prepare your business is to stay informed of the changes. Additionally, it’s worth partnering with software that will remain compliant with the new requirements and update its processes well before the changes come into effect. 

This requires considering a robust software that will adapt to your needs. 

Planning for uncertainty

We know that more information will continue to be announced in the coming days and months. 

Although it’s impossible to anticipate exactly what this will be, there are some ways you can prepare your organisation to manage the uncertainty over the next few months. 

1. Build flexible contingency plans  

Although it’s impossible to plan out the next ten months completely, there is enough information to create a guide for your organisation. 

Equally, this guide will give you a clearer picture of the critical deadlines your organisation must work toward, making sure you leave ample time to implement any necessary changes. 

2. Engage with healthcare policy experts 

Now may be the time to work together with consultants or experts in the sector to seek advice on preparing your organisation for the changes to come. If you haven’t engaged with a healthcare consultant previously, this may be an opportunity to develop a relationship with a person or agency that can guide you through regulatory changes in the future. 

3. Review financial resilience 

Now that a date for the changes has been confirmed, it’s a good opportunity to consider the upcoming cash flow management, and create a flexible budget that can adapt as new information is received. 

4. Review operational efficiency 

Your operating systems will be critical in ensuring you retain efficiency during this period of change. 

Now is an ideal time to audit your software, ensuring that all systems you use are optimised, and ready to adapt to the upcoming changes. 

If uncertain, schedule calls with your customer relationship manager to ensure your software (and your organisation) will be ready. 

5. Create a communication plan for clients 

Creating a communication distribution plan for your clients can help to ensure a smooth transition for everyone using your services. 

Consider how you will deliver the messages effectively considering many won’t be as across the new changes as you and your organisation. Distributing these communications over a set period of time, well ahead of them coming into effect, will ensure your clients remain confident in your service. 

Everyone at AlayaCare is working toward ensuring your organisation adapts to these changes as seamlessly as possible. Our goal is to ease your operational load while keeping you informed of how our software can work for you. 
 
If you have any questions, our team is very happy to answer them. Reach out to our sales team or your customer relationship manager for more information.