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Posted: 2024-11-21 07:55:08

The Senate has passed sweeping changes to the aged care system that will see residents and in-home care recipients pay more.

The government bill, which also enshrines new legal rights for aged care recipients and principles to guide those who manage the system, passed on Thursday evening after several amendments.

It will impose a means-tested resident fee of just over $100 a day, named the "non-clinical care" fee to reflect its purpose of funding food and other amenities.

It will also boost the maximum accommodation charge for residents and will see three in 10 full pensioners and three in four part pensioners pay more.

The bill will also revamp the in-home care system, re-conceiving it as an NDIS-style "budget" which can be spent on approved services, rather than a prescribed "package".

All changes will only apply to those who are not yet in the aged care system, including a carve-out for those currently on care waiting lists.

The Coalition had agreed in principle to the new structure earlier this year, but this week sought changes including short-term reviews of the operation of the new law, and a faster process for considering the future of the accommodation bond.

The amended bill will need to be ticked off in the lower house next week before it can become law.

Speaking just before the final vote, the government's Senate business manager Katy Gallagher said the bill represented "significant reform."

"In this place we pass laws that change the lives of individuals, and this will be one of those … [It will] improve the aged care system, no longer a system that's described as one of neglect but one that's person-centred, rights-based and provides new standards of care and choice for individuals who use it."

She thanked the Coalition for "many intense sessions of negotiations" over the bill.

The Coalition's aged care spokesperson Anne Ruston said the bill was "very important."

"The choice and control and the power of how [recipients] receive aged care hopefully with the passage of this bill is going to be vested in the hands of older Australians."

But she added there were "errors, inadequacies and shortfalls" with the bill and voiced scepticism the government could smoothly implement it in the coming months.

The Greens voted against the bill over concerns the rights in the act were not sufficiently enforceable. An original plan to include criminal penalties for providers who seriously violate the rights of their residents were removed in negotiations at the Coalition's request.

"Many older Australians will now be required to pay more without any enforceable rights to quality care," the party's aged care spokesperson Penny Allman-Payne said.

"If greater reliance on a user-pays model is the answer, then we're asking the wrong questions."

Senator David Pocock voted in favour after passing several of his own amendments.

A key rationale for the bill is to rebalance the cost of aged care from taxpayers to residents. At present, the government pays $3.30 for every $1 paid by recipients of residential care and $7.80 for every $1 paid by recipients of home care.

Aged care is one of the fastest-growing areas of government expenditure, a trend set to continue as the large Baby Boomer cohort begins to enter the system. The new structure will save the budget $12.6 billion over 11 years.

The Aged Care Royal Commission had recommended instead a taxpayer-funded levy to shore up public support for the scheme. But a task force convened by minister Anika Wells concluded this would place an unreasonable burden on young Australians and instead adopted the principle that the government should fund care itself, but older Australians with the means to do so should cover more of the cost of ordinary expenses like food and accommodation.

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