In 2025, Australia finds itself at a turning point in aged care reform as the first wave of baby boomers turns 80. Nearly four years after the Aged Care Royal Commission, the Albanese government has made significant strides—boosting funding, introducing a new care model, and enforcing minimum staffing ratios in residential aged care. These efforts have led to visible improvements in quality and safety. However, systemic challenges persist. Access to residential care has become increasingly difficult, placing immense strain on public hospitals as more elderly patients wait weeks or months for care placements. This backlog not only affects older individuals but also delays critical care for others in need.
A new Aged Care Act, passed in 2024, is set to take effect on 1 July 2025. The legislation highlights the rights of older Australians but lacks operational clarity. More than 700 pages of draft “Aged Care Rules” have been released for consultation, with the process criticized for being overly bureaucratic and lacking transparency. Concerns are mounting over rushed implementation and the potential for missteps once the Act is enforced.
Rising Costs and a Market-Driven Approach
Two major changes within aged care reform have generated significant public concern. First, user charges for care and accommodation are set to increase dramatically. The government, with bipartisan support, has projected $18.8 billion in savings through higher fees paid by aged care recipients. While some younger baby boomers may have the financial means, most older Australians—especially women with limited superannuation—will struggle to meet these costs. For self-funded retirees, annual out-of-pocket expenses could exceed $120,000. Although full and part pensioners are protected to some extent, the affordability of care remains a pressing issue.
Second, the government will abolish residential aged care bed licenses, allowing providers to open or close facilities based solely on market forces. Critics argue this could skew availability toward wealthier regions and leave lower-income communities underserved. Meanwhile, the aged care sector faces worsening bed shortages, leading to longer hospital stays and growing pressure on the public health system. Despite this, the government maintains that fewer residential care beds will be needed as more people age at home—a view many experts reject.
Home Care Reforms and the Road Ahead
As of 2025, 85% of aged care recipients in Australia receive support at home, primarily through the Commonwealth Home Support Program (CHSP), which delivers services like Meals on Wheels and community nursing via grants to non-profits and local governments. Despite CHSP’s proven cost-effectiveness, both major parties are moving toward a more privatized, package-based system called “Support at Home,” launching in July 2025. This new program includes more funding levels, higher user charges, and burdensome red tape—resulting in reduced flexibility and efficiency.
While 275,000 existing package holders are protected from cost increases, new users will face steep fees. Personal care, for example, could cost self-funded retirees $50 per hour. Although CHSP’s transition to Support at Home has been delayed until at least 2027, experts warn that replacing an efficient system with a costlier model will not meet rising demand. As aged care remains largely absent from the 2025 federal election campaign, experts stress that the next government must act boldly. A sustainable future for aged care reform lies in offering choice, preserving CHSP, and investing in both residential and home care to meet the needs of a rapidly ageing population.
Curious to learn more? Visit Our Website: CIO Women Magazine
