What does the budget mean for Aged Care?

This year’s Federal Budget focussed on the rising costs of living and how to help Australians manage. Before the Budget there was speculation that we would see changes for aged care funding and fees, but what made it into the Budget?

This article takes a look at the measures in the Budget and how you might be impacted, as well as what we expect to see in the future.

Home care

The government proposes to release 24,100 new Home Care Packages in 2024-25 to help reduce the waiting times to access Home Care. The waiting times have started to increase again, with lengthy delays for Level 3 (12-15 months) and Level 4 (6-9 months). Whilst the proposed further packages will assist to reduce waiting times, the wait is still expected to remain around 6 months. And then there are problems with finding a care provider who can deliver the services required.

What does this mean for older Australians? You need to be proactive and when you notice changes to your daily routines, start investigating what support is available and register with My Aged Care. Don’t wait until it becomes a significant problem as it might be too late at that time.

New Aged Care Act (and funding reforms)

We were expecting the New Aged Care Act to commence on 1 July 2024. However this has been delayed and is now proposed to commence on 1 July 2025.

Aged care providers continue to struggle with meeting the increasing costs and demands for care, and they are disappointed by the lack of insight from the government in relation to funding. The Aged Care Taskforce delivered a report in December 2023 with 23 recommendations to help with financial viability of aged care into the future. But the Government was silent in the Budget on funding issues.

What does this mean for older Australians? At the moment there is no change to aged care fees (either in Home Care or Residential Care).

However, with an ageing population and higher costs to deliver care, significant funding needs to be injected into the system. The question is where will these funds come from - the taxpayer, the resident or both? We might have more details when draft legislation for the Aged Care Act is introduced into Parliament later this year. We anticipate that fees for people accessing care will be higher.

Centrelink deeming rates

In a good news story, the deeming rates will remain frozen for another 12 months until 30 June 2025. Changes to deeming have been frozen for the past two years and this has been extended for another year. There was concern that an increase in these rates would impact pensioners and potentially reduce age pension entitlements in a period where cost of living is already presenting challenges.

Rent assistance

For renters who receive income support payments from Centrelink or Veterans’ Affairs, the government proposes to increase the maximum rate of rent assistance by 10% from 20 September 2024. This is aimed at helping reduce cost of living pressures.

Carer’s payment

From 20 March 2025, the existing 25 hour per week participation limit for Carer Payment recipients will be amended to 100 hours over a four-week period. The participation limit will no longer capture study, volunteering activities and travel time and will only apply to paid employment.

This will allow Carers more flexibility to undertake part-time work without impacting their entitlements.

Pharmaceutical Benefits Scheme

The government proposed a five-year freeze on indexing the co-payment for medicines for pensioners and other concession card holders. This will keep the maximum co-payment for PBS medicines at $7.70.

Should you have any questions about how the Budget impacts you, or if you want to discuss your planning for aged care, contact our office on 03 9584 3343 to make an appointment.

IMPORTANT INFORMATION: This document has been prepared by Aged Care Steps Pty Limited, ABN 42 156 656 843 AFSL 486723, based on our understanding of the relevant legislation at the time of writing. While every care has been taken, Aged Care Steps Pty Limited makes no representations as to the accuracy or completeness of the contents. The information is of a general nature only and has been prepared without consideration of your individual objectives, financial situation or needs. Before making any decisions, you should consider the appropriateness for your personal investment objectives, financial situation or individual needs. We recommend you see a financial adviser, registered tax agent or legal adviser before making any decisions based on this information. Current as at 16 May 2024.