A Senate committee review of the Aged Care Bill 2024 has heard feedback from more than 100 submissions and spoken to professionals across healthcare, accounting and community services to comb over the details of the federal government’s ambitious plan to reshape aged care.
The Federal Government’s 2023 Intergenerational Report predicts that over the next four decades, the number of people aged over 80 is set to triple to 3.5 million. While demand for both residential and home aged care services will skyrocket, multiple reviews have found that the system is not in strong enough financial shape to meet that demand.
Department of Health and Aged Care analysis cited in the final report of the Aged Care taskforce suggested an investment of $37 billion would be needed to meet accommodation demands by 2050.
Financial professionals including accountants and financial advisors have been following the reforms closely given the integral role they play in supporting the industry. From providing financial reporting and management support to providers through to providing guidance and information to aged care users and their families, accounting experts will play a key role in the rollout of the reforms.
It’s for this reason that the Institute of Public Accountants and fellow peak bodies have been running the ruler so closely over the new blueprint for the industry.
While the groups have long advocated for funding reforms and the introduction of new means testing rules, they have raised concerns that the funding arrangements outlined in legislation are too complicated.
“We are of the view that, based on the structure of Chapter Four and on the department’s case studies, the proposed funding arrangements remain too complex and do not appear to have been designed to work harmoniously with other government policy areas,” the groups wrote in a submission to the bill at the end of September.
Clarity a focus for consumers
Under the planned reforms, Australians already in the aged care system will have their funding conditions grandfathered and will not be affected by the changes.
But new entrants to aged care will have to negotiate the arrangements outlined in Chapter Four of the bill, which sets out how government and personal contributions will be calculated for a range of services in home and residential aged care.
Case studies provided alongside the legislation show that self-funded retirees and part-pensioners will end up contributing more fees through means testing, though the accounting bodies say they have not yet seen enough detail to understand this in practice.
The group’s submission questions whether the funding arrangements align closely enough with other government policy areas, like retirement income.
“Means testing needs to be fair, reasonable and equitable for all. This process should also be easy for individuals to easily determine their eligibility for aged care government assistance,” the groups said.

Grant Corderoy, senior partner at accounting firm StewartBrown and member of the Aged Care Taskforce, said Chapter Four achieves important aims of boosting the viability of aged care services. But he agrees the details around means testing are complicated.
“The fundamentals of what is happening in Chapter Four from the point of view of the structure I think is good, but I would agree that it is a very complex area with the whole means-testing arrangement,” he said.
“If we wanted transparency where people understand what it [care] costs, I don’t know if we have achieved that objective yet.”
The accounting group’s submission pointed out that the sector had not yet seen draft rules that would accompany the bill despite assurances that consultation on these would soon take place.
A department spokesperson said consultation on rules would be happening in stages.
“An overview of the new Aged Care Act’s funding of aged care services was published on October 11. Further information and consultation on this is planned for early November,” they said.
“The Australian Government is committed to delivering a better and simpler aged care sector that is easier to navigate for older Australians and their families. The new act will tie aged care contributions more closely to the age pension system, which people understand and are familiar with.”

Shadow minister for Health and Aged Care Senator Anne Ruston said she had pushed for Senate committee hearings across the country to give stakeholders express any concerns about the specifics of the bill.
“We know that the Albanese Labor Government’s refusal to release all of the detail, specifically relating to Chapter Four, makes it very difficult for older Australians, their families, age[d] care providers and other stakeholders to understand how these changes will work,” she said.
Corderoy notes that while certain details of the reforms are being scrutinised, the agenda has bipartisan support and is key to strengthening the sector.
On November 4, the Senate committee recommended that the Aged Care Bill be passed urgently, noting that “older Australians and their families simply cannot wait any longer for a better and safer system”.
The review said that once the bill is passed, the rules that accompany the legislation can be finalised and released to public view.
Coalition senators who sat on the committee argued that a timeline be established for the release of all rules before the bill is passed, and that all rules be referred back to the committee for review before being finalised.
The committee has strongly encouraged the government to provide educational materials and guidance to professionals in the sector as soon as possible so that they have time to prepare their systems for the new arrangements.
Visit IPA’s joint submission on the Aged Care Bill 2024 here.