Aged care amendments: what our sector needs to know

The Aged Care Legislation Amendment (Increasing Consumer Choice) Act 2016 (“Amending Act“), which will take effect on 27 February 2017, will create new opportunities and challenges for retirement living operators in the home care space.

The main change under the Amending Act is that home care packages will no longer be allocated to approved providers. Instead, packages will be allocated directly to consumers, who will then determine which provider to direct their package funds to.

This means approved providers will no longer need to apply for places through an Aged Care Approvals Round (ACAR). From 2017 onwards, once approved, they will be able to offer subsidised services to however many approved care recipients wish to engage them.

Organisations will still need to have approved provider status to be eligible to receive funds directly from a consumers package. However, the Amending Act aims to make it easier for new entrants to get approved provider status and introduces a much simpler process for residential aged care providers to become home care providers.

Once approved, providers will need to comply with the Home Care Standards and will undergo regular reviews by the Aged Care Quality Agency.

The reforms also make it easier for consumers to change providers by removing the ability for the provider to retain unspent funds if a consumer leaves the package. Unspent funds will need to be returned to the consumer or Government when the consumer leaves.

The aim of these reforms is to increase competition in the home care sector and give consumers greater flexibility and control.

For retirement living operators, the reforms create new opportunities to enter the market, either as approved providers or as sub-contractors to existing approved providers. Removing the need to go through an ACAR will make it much easier to start providing services to approved care recipients.

While it will be easier to enter the market, approved providers will continue to be regulated in the provision of care and services. Operators who are considering entering the space will need to have systems in place to comply with the Home Care Standards and to undergo quality audits.

For retirement living operators already providing home care, the challenge will be to retain their clients in an environment of increased competition and more flexibility for consumers to switch providers. However, as accommodation providers for their clients, operators will be uniquely placed to market their services and offer care and services at a competitive rate.

This article was written by Anita Courtney, Senior Associate at Russell Kennedy Lawyers, the Retirement Living Councils legal partner. Russell Kennedy is the market leader in the provision of legal services to the aged care and retirement living sector. For more than 25 years the firm has advised numerous owners, developers and operators. In 2017 Best Lawyers in Australia, six of Russell Kennedy’s lawyers were ranked, and one awarded “Lawyer of the Year”, for “Retirement Villages and Senior Living Law”.