Australians entering aged care will soon face higher fees under sweeping reforms approved by the Senate. 

The changes, set to become law following lower house approval this week, aim to rebalance costs, introduce new rights for recipients, and modernise service delivery.

The bill establishes a means-tested “non-clinical care” fee of over $100 per day for food and amenities in residential care, alongside increased accommodation charges. 

Approximately three in ten full pensioners and three in four part pensioners will face higher costs. 

For in-home care, the reforms replace fixed packages with flexible budgets for approved services.

Only new entrants to aged care will be affected, with current residents and those on waiting lists exempt. 

The reforms seek to shift more financial responsibility to recipients who can afford it, reducing taxpayer burdens and saving the budget $12.6 billion over 11 years.

Aged care is one of the fastest-growing government expenses, with taxpayers currently covering $3.30 for every $1 paid by residential care recipients and $7.80 for every $1 in home care. 

The reforms aim to address this imbalance, following recommendations from a ministerial task force. 

While the Aged Care Royal Commission proposed a taxpayer-funded levy, the government opted for a user-pays approach for non-clinical expenses.

Senator Katy Gallagher has described the reforms as a “person-centred, rights-based” transformation of a system previously criticised for neglect. 

The Coalition supported the bill after securing amendments for reviews and faster consideration of accommodation bonds. 

Opposition spokesperson Anne Ruston acknowledged the reforms’ importance but warned of potential implementation hurdles.

The Greens opposed the changes, arguing they inadequately enforce care quality. 

“Many older Australians will now be required to pay more without any enforceable rights to quality care,” Senator Penny Allman-Payne said. 

Independent Senator David Pocock backed the bill after pushing through several amendments and emphasised the need for vigilant oversight.

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