The Aged Care Act 2024, passed by the Australian Parliament on 25 November 2024, is set to commence on 1 November 2025. This significant reform aims to overhaul the aged care system.
As the new Act approaches its commencement date, it is crucial for older Australians, their families and carers to stay informed about these changes and how they may impact the cost of and quality of care.
One of the most notable reforms is the discontinuation of new agreements for “additional” or “extra service fees”. From the commencement date, aged care providers will no longer be able to enter into new extra service fee agreements with residents. These will be replaced by the new optional Higher Everyday Living Fee (HELF), which offers a more structured and consumer-focused approach to optional services in residential aged care, as opposed to compulsory fees for services not utilised.
Under the current system, aged care facilities can charge extra fees for services beyond the basic care requirements, such as upgraded meals, additional recreational activities or enhanced accommodation options. However, many residents do not utilise these services even though they are required to pay for them, leading to concerns about fairness and transparency in fee structures. The introduction of the higher everyday living agreement seeks to address these issues by providing a clearer and more equitable framework for charging fees.
It is important to note that while new extra service agreements will no longer be permissible, existing agreements can continue with their existing arrangements until 31 October 2026. After this date, any remaining extra service fee agreements will cease to have effect.
If a current resident wishes to have their extra service fee agreement removed before the automatic cessation date, they should discuss this with their aged care provider. Providers are required to review and update service agreements if services change or upon the resident’s request, as part of ongoing care discussions.
Should you or a loved one require legal advice prior to entering into an aged care agreement, contact McNamara Law on 1300 285 888.
