By Michael Lucey, Rebekah Lines and Phoebe Powell, McCullough Robertson Lawyers
Australia’s aged care sector has been the focus of reform for over a decade, spurred by increased scrutiny and the findings of the Royal Commission into Aged Care Quality and Safety.
The need for change has been driven by the sector’s operational challenges and the identified systemic reform required to improve service quality and long-term sustainability, particularly with Australia’s aging population demographic.
The tabling of the new Aged Care Bill 2024 (the Bill) on September 12, 2024 has been fraught with delays and political negotiations.
Indeed, the tabling of the Bill itself looked doubtful until last minute concessions were reached between the Government and the Opposition to allow the Bill to be introduced.
It would seem that the Bill should now pass without any further substantive interruption prior to dissolution of the current 47th Parliament before the next federal election expected in early 2025.
With the tabling of the Bill, greater clarity is cast on the future of this critical sector.
The Bill and what has changed?
The Bill itself responds to around 60 recommendations from the Royal Commission, and addresses:
- a Statement of Rights for older people receiving aged care;
- the Government’s response to the Aged Care Taskforce’s recommendations;
- the “Support at Home” program – which is intended to launch from mid-2025;
- bolstered Aged Care Quality Standards; and
- increased regulatory powers for the Aged Care Quality and Safety Commission (ACQSC).
The Government has committed $5.6 billion in funding for the implementation of the new Bill, with $4.3 billion alone committed for the “Support at Home” program.
Fundamentally, the Bill has been designed to recalibrate the focus of the aged care system – from the existing one structured around providers and how to fund them, to one structured around people accessing services and what they need. This has been referred to as a ‘rights-based’ model.
The Bill provides for:
- larger, means-tested contributions from new entrants to the system;
- providers being permitted to levy a higher maximum room price (increasing from $550,000 to $750,000); and
- providers being allowed to keep two per cent of each new residential accommodation deposit (RAD) (the fee paid when someone enters residential aged care) from each year for up to five years.
It is proposed that the Government will continue coverage for all expenses related to clinical care. Some residents will be expected to pay more toward everyday living costs such as cleaning, shopping or meal preparation.
There are no changes to how a person’s home is assessed as part of the means test. Additionally, the Government has committed to a “no worse off” guarantee for people already in aged care, with the new contributions to come into force from July 1, 2025.
The current “home care” program (effectively made up of the existing Home Care Packages and Short-Term Restorative Care), which provides supports to people who wish to remain in their own home rather than enter residential care, will transition to the “Support At Home” program from 1 July 2025.
The Commonwealth Home Support Programme (CHSP) is intended to transition across to “Support at Home” no earlier than 1 July 2027.
Remodelled regulatory regime
Critically, and after multiple phases of public and stakeholder consultation, the new Bill proposes a remodelled, best-practice regulatory regime overseen by the ACQSC, with the Complaints Commissioner becoming a stand-alone statutory appointment with its own complaints functions.
This is derived from one of the express findings of the Royal Commission that:
“Ineffective regulation has been one of the contributing factors to the high levels of substandard care in Australia’s aged care system. Regulation should seek to prevent harm to people receiving aged care services and ensure that instances of substandard care are detected and addressed.”
The fundamental shift, however, is that the new regulatory regime will require all providers to register in one or more of six expected provider registration categories to provide Australian Government-funded care.
Existing providers will be subject to a deeming process to facilitate ready transition for the commencement of the new regime.
Next steps?
The Bill will now be considered by the Senate Community Affairs Legislation Committee, with the new Act expected to commence on July 1, 2025. We anticipate further key changes in this broader area, including in the underlying regulatory space.
Work continues apace on the underlying subordinate legislation which will sit under the new Act (also called the Rules). Until such time as the Rules are finalised, the full picture and operation of the new regime remains somewhat unsettled.
Michael Lucey is a partner at McCullough Roberton. Rebekah Lines is a Senior Associate at the firm and Phoebe Powell is a graduate.
This article covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.
