The aged care reforms 2025 mark a major overhaul of Australia’s aged care laws. A new Aged Care Act (passed in 2024 and effective from July 2025) replaces the decades-old 1997 Act. This legislation puts older people’s rights and needs at the centre, promising simpler access, stronger quality standards, and more support to stay at home. In this article we explain the main changes and how they compare to the 1997 Act, focusing on what it means for ordinary Australians approaching retirement.
Aged Care Act 2025: A Rights-Based, Person-Centred Approach
One of the most significant shifts is the rights-based framework introduced in the new Act. Unlike the 1997 Act, which focused on providers and funding models, the updated law enshrines a legal Statement of Rights for older people. These rights guarantee independence, autonomy, privacy, and safety in care and include the ability to voice concerns without fear. They replace the earlier voluntary Charter of Aged Care Rights and make these principles legally enforceable.
Providers now have a positive duty to uphold each right in practice. They must treat older people with respect and dignity in every interaction. Care recipients gain a clear entitlement to timely, high-quality services suited to their needs. The law requires providers to embed these rights into policies, staff training, and everyday routines.
The Act also strengthens the Aged Care Quality Standards. Providers must involve older people in planning, delivering, and reviewing their own care. Each person has the right to make informed choices about services, care workers, and living arrangements. This ensures care is tailored, safe, and responsive to individual preferences.
Under the 1997 Act, older Australians often had little recourse when standards slipped. The Royal Commission described that law as “no longer fit for purpose.” The new framework addresses past failures, such as neglect and abuse, by giving older people enforceable protections. Advocacy group OPAN called the Statement of Rights “a historic moment” to ensure that everyone can hold providers accountable.
Another key feature is supported decision-making. Older people can appoint supporters to help them understand options and make informed choices. Independent advocates receive stronger backing, especially for those with cognitive impairment. Whistle-blower protections are expanded so anyone can report poor care without risk of retaliation, and an independent Complaints Commissioner oversees every case.
For the average Australian nearing retirement, these changes mean greater confidence and control. You can expect clear information on your rights, stronger guarantees of quality and a formal process to challenge poor care. Families gain peace of mind knowing providers face legal duties to respect and support older people. The new rights-based, person-centred approach puts you at the heart of your care journey.
Single Entry and Assessment
The 2025 reforms streamline how older Australians access care by establishing a single entry point into the system. Government-funded aged care services now flow through one unified gateway rather than separate application streams. This change replaces the fragmented network of programs and agencies under the old law. It makes eligibility rules clear and consistent.
Under the new Act, every applicant undergoes one standard assessment process. This assessment takes into account home care, residential care and other support services all at once. It is designed to be culturally safe, respecting language, traditions and community needs. Older people and their families will no longer face multiple exams or confusing program rules.
Centralising access also enhances fairness. Everyone is evaluated by the same criteria and tools, reducing regional or provider-level inconsistencies. Assessors follow transparent guidelines to match each person with the right level of support. This uniform approach helps prevent long delays and avoids situations where someone might qualify for one service but not another.
The new system includes both digital and in-person support options. A central online portal allows users to submit their information and track their application. Phone lines and local offices provide help for those less comfortable with technology. Dedicated case managers guide applicants through the process, answer questions and coordinate follow-up care.
One of the biggest benefits is reduced waiting times. By removing duplicate assessments, the system can assign services more quickly. Seniors will have faster access to home visits, allied health services or residential placements when needed. Quicker matches mean better continuity of care and less uncertainty for retirees and their families.
Overall, the single entry and assessment model simplifies the path into aged care. It brings clarity to eligibility, standardises decision-making and speeds up service delivery. The new process offers a more seamless and supportive experience for Australians nearing or just entering retirement. This reform aims to ensure that every older person receives timely, appropriate care without unnecessary hurdles.
Changes in Residential Aged Care
Under the new Act, residential aged care will see major changes. Providers must now register and have each care home approved individually. Older Australians gain guaranteed care places and face a revised fee system. These updates aim to improve fairness, sustainability, and clarity in residential care services.
Registration and Provider Categories
Under the new Act, providers must register under one of six defined categories. This replaces the old “approved provider” model and clarifies each organisation’s legal obligations. The categories reflect different scales and types of services, from small community operators to large multi-site groups. Registration ensures the regulator can monitor standards and intervene quickly if issues arise.
Individual Approval of Care Homes
Each care home now requires its own approval rather than being bundled under a single provider licence. Regulators will assess governance, staffing levels and safety measures at every site. Homes must demonstrate ongoing compliance with quality and safety standards to maintain approval. Regular reapproval reviews will help catch problems early and drive continuous improvement.
Guaranteed Care Places
Care “places” are now allocated directly to individuals who need them, instead of being held by providers. This gives older people a legal right to a bed when they require residential care. Providers can no longer limit access by holding a fixed number of places. The change aims to eliminate waiting lists and prioritise those with the greatest need.
Revised Fee Structure
Residents continue to pay the basic daily fee, set at roughly 85 percent of the Age Pension. A new hotelling supplement covers non-clinical costs like meals, cleaning and laundry. The non-clinical care contribution replaces the old means-tested fee and funds nursing and allied health services. Both supplements are means-tested and capped to limit out-of-pocket expenses.
Accommodation Funding Reforms
Refundable accommodation deposits will retain two percent annually for five years to fund maintenance and capital improvements. Daily accommodation payments will be indexed to inflation more frequently than before. This ensures care homes can maintain high-quality facilities without sudden funding gaps. Smoothing out cost increases protects residents from unexpected spikes.
Lifetime Caps and Protections
A lifetime contribution cap of $ 130,000 limits the total amount a person pays for accommodation and care combined. Under previous rules, this cap was around $ 82,000, often leaving residents liable for extra costs. The higher cap helps shield pensioners and modest earners from a significant financial burden. Self-funded retirees may pay more, but will not exceed the lifetime cap.
Impact on Pensioners and Self-Funded Retirees
Most pension recipients will see little change in their out-of-pocket costs. Analyses suggest a full pensioner could pay up to 17.5 percent of their living costs, while some self-funded retirees may face higher contributions. Many modest earners will pay as little as six percent. The tiered fee structure is designed to make wealthier retirees contribute more to system sustainability.
Transparency and Oversight
The Act requires clear disclosure of all fees and contributions before admission. Providers must supply written and verbal information explaining payment obligations. Advocacy groups have welcomed this move as essential for informed decision-making. Greater transparency and stronger regulatory oversight will help build trust and accountability.
What Advocates and Seniors Are Saying
Leading senior advocacy groups have welcomed the shift to a rights-based system. COTA Australia described the new Act as a “turning point” that lays a vital foundation for respecting older people. They stressed that “business as usual is unacceptable” and urged continued action to embed these changes. The Older Persons Advocacy Network called enshrining a Statement of Rights “a historic moment” but warned that older people must remain involved throughout implementation.
Support from Industry Leaders
Many service providers and experts agree the reforms are necessary to raise standards and secure funding. Lincoln Hopper, an aged care industry leader, called these “the most impactful changes to aged care in a long time.” He noted the updates will help ensure providers cover the true costs of accommodation and care. Paul Sadler, Chair of Meals on Wheels Australia, praised the bipartisan support for ambitious aged care reforms.
Voices of Concern from Seniors
Some older Australians have expressed anxiety about the changes, especially around new co-payments. One senior described the upcoming reforms as “dismal” and “unrealistic.” Others worry that extra fees might force families to reduce essential services. The government and support agencies will need to address these fears clearly as the reforms roll out.
Conclusion
The aged care reforms 2025 overhaul the outdated 1997 Act with a rights-based, person-centred framework that legally enshrines independence, dignity, and choice. They create a single entry and assessment process and introduce the Support at Home program to simplify access and enhance support for older Australians living independently. Residential care funding and management are revamped through new registration requirements, guaranteed care places and updated fee structures with built-in protections for pensioners. Together, these changes aim to deliver clearer guarantees of quality, fairness, and transparency so retiring Australians can access safe, sustainable care tailored to their needs.
