Changes galore: Aged Care Act differences

The Department of Health and Aged Care has conducted its first webinar in the wake of this week’s defining Aged Care Act progress, recapping some of its key elements. Department representatives also highlighted some of the most notable changes between the exposure draft and the Bill presented to Parliament.

The Department’s Deputy Secretary, Michael Lye, and Assistant Secretary, Nick Morgan, opened the webinar by touching on some of the Act’s features that are already more familiar to industry insiders. 

Mr Lye said the aged care reform changes address a growing demand for aged care services over the next 40 years, including the projected growth in demand for home care. It’s expected that almost two million people will use home care in 20 years, double the current amount. 

With additional funding required to meet future demand, deliver quality improvements and support confidence in the sector, the Government had to pursue several measures to support older people accessing care rather than just relying on taxes from what would be a declining working-age population. These measures include co-contributions, changes to daily living and accommodation contribution reforms. 

“The Government will continue to be the major funder of aged care. The Government won’t be introducing a new tax or levy as a way to fund the aged care sector. It won’t change how the family home is being tested when determining aged care contributions,” he said.

Support at Home

Arguably one of the biggest changes coming is Support at Home which will replace Home Care Packages and the Short-term Restorative Care Program from July 1 2025. The Commonwealth Home Support Programme will be replaced no earlier than July 2027. 

“Support at Home will better support the community’s preference to age at home by improving access to early interventions to stay independent as well as increasing the level of support available for people with complex needs ensuring efficient prices so that funding goes further,” Mr Morgan added.

“The Support at Home program is being introduced with a real growth rate to reduce wait times and the target is an average of three months from assessment to services from July 2027.”

Notable changes include an increase to eight classifications from four with funding between $11,000 to $78,000 available per year. Home Care Package recipients can currently access no more than $60,000 per year. Assistive technology and home modifications will be separately funded. Two short-term classifications will have 12-week budgets, while there will be an additional end-of-life pathway for those diagnosed with three months or less to live. 

Meanwhile, existing clients will see their budgets remain the same, while those approved for a package level will receive a budget at that level once it’s available. They will only move onto a new classification if they are reassessed. Unspent funds from existing clients will be carried across. 

Co-contributions and fees

Nick Hartland, First Assistant Secretary, Department of Health and Aged Care, went through participant contributions for home care and residential aged care. 

Currently, home care clients can be asked to pay one of three fees; a basic daily fee, an income-tested care fee and additional service fees. Income-tested care and basic daily fees apply regardless of services actually used.

Under Support at Home, contributions will only be made based on the services a participant uses. Contributions will be set as a percentage of the cost of the service and they will vary based on the user’s wealth in accordance with their access to the age pension.

“Clinical supports such as nursing and physiotherapy will not require a contribution. Supports for independence, personal care and the like, will have moderate contribution and supports for everyday living such as gardening and cleaning will have a higher contribution,” Mr Hartland said.

“These rates mean that clinical services will be fully funded by the Government no matter the circumstances of the participant. This approach is consistent with the reforms in residential aged care.”

The No worse off principle will protect existing participants and those in the national priority system or assessed are eligible for a home care package. They will not have to pay any of the upcoming additional fees or increased accommodation costs in residential care. 

As for residential care specifically, the basic daily fee, accommodation supplement and its associated means testing conditions will not change. The current means-tested care fee will be replaced by a new means-tested contribution to the Hotelling Supplement and contributions to non-clinical care. 

The Government will fully fund the gap of either fee for those making no contribution or a part contribution.

Susan Trainor, Assistant Secretary, Funding Operations and Analysis branch, added that a new higher everyday living fee will replace existing additional services fees and extra service fees for new residents. 

“The higher everyday living fee will allow residents to purchase goods and services that are additional to or of a higher quality than the standard daily living services that all residential providers must deliver for all residents. Examples of these services include wine with meals, on-site hairdressing or pay TV,” she said.

Strong consumer protections will apply, including cooling-off periods, regular reviews and a prohibition on making the fee a condition of acceptance for new residents. 

Ms Trainor added that providers will see improved financial sustainability thanks to the new retention rate which means they can retain 2% per annum of refundable accommodation deposits RAD). 

The amount will be deducted from the RAD each month. Daily accommodation payments (DAP) will be indexed twice per year in line with changes to the consumer price index, bringing them in line with increases to the Government-funded accommodation supplement. 

“Importantly it will provide funding to support the necessary new builds and capital upgrades to meet future age care demand,” she said.

The Government has also agreed to consider phasing out RADs from 2035, subject to a review.

Exposure draft changes

Mel Metz, Assistant Secretary, Legislative Reform Branch, went through some of the most notable changes from the exposure draft and the Aged Care Bill presented to Parliament. 

She stated that the Act will not only replace existing legislation but also the Aged Care Quality and Safety Commission Act 2018 and all principles and rules underneath those Acts. 

Additionally, new system oversight and accountability arrangements mean the Secretary of the Department of Health and Aged Care will be the steward of the care system. Blair Comley holds this position.

Among the updates that have occurred since the exposure draft include revised supported decision-making arrangements and a new positive requirement for providers to uphold rights. 

“Positive duty to uphold rights was something we heard a lot about. What the exposure draft required was registered providers not to act in a way that is incompatible with the statement of rights,” Ms Metz said.

“The Bill replaces that language ‘must not act in a way that’s incompatible with the rights’ with ‘must take all reasonable and proportionate steps to act compatibly with the relevant rights specified in the statement of rights in the delivery of funded aged care services’.

“Using this positive language means that registered providers will be required to actively ensure that the funded aged care services they deliver meet the rights specified in the statement of rights.”

As for supported decision-making, the new supporter framework assumes an older person has the capacity to make decisions, placing responsibility on the formal support network to only act when requested or required. Individuals will have to register supporter relationships with the system governor, instead of individuals being appointed by the system governor. 

Exemptions for governing body membership requirements have also been included. Ms Metz said this would be relevant to Aboriginal-controlled community organisations and co-operatives. 

Criminal penalties have been removed. They were attached to the new duties on providers and responsible persons. They now will operate as civil penalties. 

“Some stakeholders thought that the responsible person duty and related criminal penalties were unnecessary and could discourage suitably qualified and experienced people from participating in governance positions,” Ms Metz said.

“The responsible person duty is now limited to certain responsible persons. This addresses a material concern by carving out middle management and nursing management from liability for a failure to exercise due diligence.”

There’s also a new condition for registered providers of approved residential care homes to provide access to vaccinations for workers and individuals, a new obligation relating to direct care so providers to meet care minute targets, while a quality care worker body has been included in the advisory body requirements for registered providers. 

Elsewhere, whistleblower provisions have been refined, the Complaints Commissioner will be an independent role, funding arrangements are now publicised in Chapter 4.

Webinar slides are available here. The webinar recording should be available in the coming days, while a FAQ will be produced. Additional webinars will be held on September 18 and 19 with all information available on the Department’s website or via email subscriptions.

For all information related to the new Aged Care Act, including links to the Bill, visit the Department of Health and Aged Care’s website.