Higher everyday living and accommodation funding reform – Webinar

[Opening visual of slide with text saying ‘Australian Government with Crest (logo)’, ‘Department of Health and Aged Care’, ‘Accommodation funding and the Higher Everyday Living Fee’, ’10 April 2025’, ‘agedcareengagement.health.gov.au’, ‘10 April 2025’] 

[The visuals during this webinar are of each speaker presenting in turn via video, with reference to the content of a PowerPoint presentation being played on screen] 

Nicholas Hartland: 

Well good afternoon everybody and thank you all for attending today’s webinar. My name’s Nick Hartland. I’m the First Assistant Secretary of the Systems Engagement and Contributions Division in the Department of Health and Aged Care. And I’m joined today by Adriana Platona, the First Assistant Secretary of the Residential Care Division and Susan Trainor, the Assistant Secretary of the Contributions and Accommodation Reform Branch.  

So I’d just like to start as we always do by acknowledging the traditional custodians of the lands on which we are meeting today. I’m based in Canberra so that’s the Ngunnawal people. And I’d like to acknowledge and pay respect to their continuing culture and the contribution that they make to the life of the city and the region. And I’d like to extend that acknowledgment and respect to other families with a connection to the region and other Aboriginal or Torres Strait Islander people who are with us today. 

The second thing that I’d like to just say quickly before we launch in is that with the calling of the Federal Election the Government and the Department are in a caretaker mode and that means that we don’t do some of the things that we would normally do. So we don’t provide policy advice to the Government at the moment, we don’t make commitments that would bind an incoming Government and we don’t communicate things that might become an object of discussion and controversy in the election. But we do go on with the business of Government.  

So we are working hard to be prepared to implement the existing policy of the new Aged Care Act coming in in July and part of that is communicating to you about the webinar. So we think this is a really important thing to continue to do and that’s why we’ve scheduled it at the moment. It does mean though that we’ll be a bit more cautious about the Q&A session. So instead of a live question and answer session at the end of this webinar we’ll look at some of the most popular questions that were submitted during the registration process and deal with those. So you’ll just have to put up with us a bit on that constraint but we will also have documentation after the webinar that both has the slides and also goes through some frequently asked questions. And actually the webinar slides should be available to you to download if you wish. 

So with those introductory comments as you’re probably anticipating this webinar will cover reforms focusing on accommodation funding and the new higher everyday living fee. And we’ll do accommodation funding first and at that point I’ll throw to Susan Trainor to take us through those slides. 

Susan Trainor: 

[Visual of slide with text saying ‘Accommodation funding reform’] 

Hi everyone. My name’s Susan Trainor. I’m the Assistant Secretary of Contributions and Accommodation Reform Branch here at the Department. Before we get into talking about accommodation reforms it’s worth us going through briefly how residential aged care accommodation funding works. This explanation will help with the terminology as we go through the reforms but also provide some background to the designs of various parts of the changes. 

So as you may be aware accommodation funding in residential aged care is means tested. We previously held a webinar about changes to means testing for residential care back in February so if you didn’t catch that one you can watch the replay of it through our website. Importantly none of the changes to means testing will impact accommodation. The means test will still result in the same group of people receiving accommodation support and at the same level as it did before the changes. For those that have the means to pay for or contribute in part to the cost of their accommodation they have the choice of paying for that accommodation by a lump sum, periodic payment or a combination of the two. So the lump sum is known as a Refundable Accommodation Deposit or RAD for short. This is what it’s called for a person who pays their full accommodation costs.  

We also talk about a refundable accommodation contribution for those who make a partial contribution to their accommodation costs where they pay some and the Government pays the rest. As the name suggests these are refundable payments that the provider holds while a person remains in care. Retention will change that slightly and we will go through that a little later on. Periodic payments are known as daily accommodation payments for a person who pays their full accommodation costs and daily accommodation contributions for those who make a partial contribution to their accommodation costs. They are not refundable. The Government has made no changes to how the home is treated in the means assessment or determining eligibility for Government assistance with aged care accommodation costs. And individuals will still have a full choice in how they pay for their accommodation, whether it’s a lump sum, daily payment or any combination of the two. 

Residents can also continue to ask their provider to do daily payments from any lump sum paid for accommodation and to negotiate with the provider to cover other fees such as the basic daily fee or hotelling contribution and non-clinical care contributions from that lump sum that they’ve paid. The accommodation reforms are designed in a way that preserves these choices. People that pay for their accommodation in full will pay the price that they agreed with their provider before entering care and people that contribute to their accommodation costs will generally pay a lower amount determined by the means test. So when I say contribute to their accommodation costs that’s that person who pays some of their accommodation and the Government pays some. The means test will determine how much they contribute. 

So the Aged Care Taskforce identified an urgent need to improve the financial sustainability of residential aged care accommodation. In 2022-23 46% of providers made a loss on their accommodation and under the current funding settings the amount of capital that is invested in building new rooms and upgrading existing rooms will be $56 billion short of what is needed to meet growing demand for residential aged care by 2050. To address this the new Aged Care Act will implement reforms to strengthen provider viability while ensuring residents have clear, fair and sustainable accommodation payment options.  

There are three key changes that will take effect in 2025. The first of these is the maximum accommodation price which has already commenced. The cap on accommodation prices increased from $550,000 to $750,000 on the 1st of July this year allowing providers to set higher prices without requiring approval and there will now be indexation of the maximum accommodation price. The second of these commences on 1 July this year and that’s the refundable accommodation retention. So a small percentage of each RAD will be retained over time rather than fully refunded when a person leaves care. And then the third of these is that the Daily Accommodation Payment or DAP will be indexed. This will see DAP payments indexed twice a year moving in line with economic conditions. 

So the first of these accommodation reforms was to increase the maximum room price that a provider could publish or charge before they need to seek prior approval of the Independent Health and Aged Care Pricing Authority. From the 1st of January 2025 this threshold increased from $550,000 to $750,000. This is the first time that this price has changed since it was introduced in 2014. The existing requirement that a provider cannot ask a resident to agree to a room price higher than what they have advertised remains in place. To ensure that this price remains fair and keeps pace with rising costs the maximum room price will be indexed annually on the 1st of July each year in line with the Consumer Price Index. This reform is a change to the points at which additional regulatory approval is required for providers rather than an increased cost for any individual in care. Importantly this will also not impact anyone already living in residential aged care who has entered into an accommodation agreement with their provider and cannot be charged more than the price that they have already agreed. Lower priced accommodation options will continue to be available but this change will reduce red tape for providers and give them greater confidence when they’re considering investing in new aged care accommodation and to invest to maintain the quality of their accommodation. 

Starting on the 1st of July this year aged care providers will be required to keep a small portion of each new eligible Refundable Accommodation Deposit or Refundable Accommodation Contribution. This amount will be calculated based on a retention rate of 2% each year applied as a daily rate. The retention amount will be calculated based on the daily RAD or RAC balance with the amount debited from that RAD or RAC monthly. This is being introduced to improve the financial viability of accommodation for providers and makes the biggest difference of the reforms in addressing accommodation losses. Importantly it will provide funding to support the necessary new builds and capital upgrades required to meet future aged care demand. 

The retention period will be capped at five years to protect residents who remain in care for a long time. So once a person has paid a RAD and contributed for five years the provider will stop making any further deductions from the RAD as a retention. This retention applies to both the people who are paying all of their aged care costs as a RAD and those who are making a partial contribution through a RAC ensuring consistency across different types of refundable payments made by residents. For those who pay with a combination of a RAD and a DAP the RAD retention will apply to the proportion of the room price that is paid by a lump sum. No one who entered care before 1 July 2025 will pay a retention on their RAD or RAC balances even when these are paid or topped up after the 1st of July 2025. So that means a person who enters care in June of this year even if they don’t actually put the money for their lump sum with the provider until after the 1st of July they are still exempt from the RAD retention. 

Unlike when other fees are deducted from a resident’s RAD balance individuals will not be required to top up the agreed room price when the reductions are the result of a RAD retention amount. There would be no increased daily payment that would result from the balance of the RAD declining as a result of retention. 

To explain this all a little further we have an example here of how RAD retention works and how it impacts the resident’s RAD balance over time. In this scenario we have a person who enters care on the 5th of July this year and agrees to pay a Refundable Accommodation Deposit of $500,000 as part of their total agreed room price of $600,000. They’ll pay the remaining $100,000 of the room price as a DAP of $23.07 every day. The amount is fully refundable upon departure minus any deductions. For simplicity in today’s example we’ve assumed that this person is paying all their other aged care costs from outside of their RAD and are not making deductions from their RAD for these costs. The provider applies a retention deduction at a rate of 2% per annum and they charge this resident on the 28th day of each month. And as I said to keep this example simple there are no other fees being deducted from the RAD. 

So the retention amount is calculated using a standard formula. This is 2% multiplied by the balance of the RAD divided by 365 for the days of the year multiplied by the number of days of the retention period. Since this resident entered care on the 5th of July and the first deduction occurred on the 28th this first retention period covers 24 days. So on the 28th of July 2025 the provider steps out this formula and deducts $657.53 from the resident’s RAD balance reducing the balance to $499,342.47. This process then continues each month. So for example on the 28th of August, the next month, the deduction will be based on the full 31 days that have passed since the previous retention amount was deducted but the deduction will be calculated using the new balance of $499,342.47. So each time a deduction is made the RAD balance reduces over time. The next retention deduction is based on the new balance and the maximum RAD that the provider can accept also reduces. Now retention deductions would stop after five years even if this person is still in care. So if they’ve moved in on the 5th of January 2025 by July 2030 they will no longer make RAD retention deductions even if they remain in care for some years after that. 

So a key takeaway from this example is that the retention is paid on the refundable deposit balance not the original lump sum that was paid. This means that people paying in a combination payment will make a smaller retention contribution than those who pay a full lump sum RAD. But as a trade off for that they will have to pay a partial DAP for the non-RAD component. And the amount of retention deduction will vary slightly over time. So the RAD retention itself will cause the refundable deposit balance to reduce and because we calculate each month on what the balance is rather than the original deposit the amount of retention will decline slightly each month. 

Now as I mentioned earlier it is possible for people to have their other aged care fees deducted from their lump sum RAD or RAC. When requested a provider must allow a person to have their Daily Accommodation Payment or Daily Accommodation Contribution if they’ve paid for their accommodation in a combination. They can also agree if a resident requests to deduct other fees like the basic daily fee from the refundable deposit. If a fee other than a RAD retention is deducted from the refundable deposit some action will need to be taken to ensure the resident is still meeting the full value of their accommodation payment or deposit. The resident can do this in one of two ways. They could either top up the refundable deposit by bringing in other assets to pay additional amounts so that the lump sum balance is where it needs to be, or by increasing the share of their accommodation costs that are paid through a Daily Accommodation Payment contribution. The legislation refers to this as maintaining the accommodation payment or contribution. 

Importantly residents do not need to maintain the accommodation payment or a RAD retention reduction. This is a very deliberate decision. If this decision had not been taken a resident that had chosen to pay fully by RAD would over time be required to top up their refundable deposit or start making daily accommodation payments. In practical terms for providers this means that they will need to consider all of the RAD retention deductions taken out of a lump sum payment to ensure that if someone does need to make a top up payment for those other aged care fees the RAD or RAC does not result in a higher than the original agreed room price balance and to ensure that they do not overcharge the DAP or DAC by adjusting upwards because of RAD retention. 

Another change that’s commencing on the 1st of July this year is the indexation of the Daily Accommodation Payment for new residents entering care from the 1st of July. Currently once a resident starts paying a Daily Accommodation Payment the amount remains fixed even though the costs of maintaining accommodation increases over time. So for example they agree a room price of $100 per day on the 1st of January this year and five years from now that room price is still $100 a day even though the cost of everything associated with providing that accommodation has increased over those five years.  

From the 1st of July this year a change will be introduced that will mean DAPs are adjusted on the 20th of March and 20th of September each year based on the Consumer Price Index. This is the same as what the Government does today for the accommodation supplement rate for supported residents. And those 20 March and 20 September dates have been chosen as they are the dates that the aged pension increases meaning that a pensioner does not end up having to pay more as a share of their pension income as a result of indexation. This ensures the providers can keep up with rising costs of providing residential aged care and continue offering quality accommodation. This change only applies to new residents entering care for the first time after 1st of July this year. Existing residents will not see any changes to their payments. 

There will also be no changes to the Daily Accommodation Contribution paid by a person who receives partial support for their accommodation costs because these are already adjusted at regular intervals through the accommodation supplement mechanism. And so what this change will do is bring the treatment of those DAPs for the individuals who pay their full accommodation costs into line with the contributions for partially supported residents. The rules provide instructions on how to index DAPs where the person has paid in part by RAD at any stage and the Government has and will continue to publish an indexation factor for accommodation funding to support this and to ensure providers deliver high quality care. Providers will apply this indexation factor and cannot use their own indexation rate. To protect consumers DAPs will only be indexed on the 20th of March and the 20th of September providing greater transparency and stability for residents. 

We now have a quick example for you all that shows how DAP indexation will work. In this scenario we have a person who’s entered permanent residential care for the first time on the 10th of July this year and they’ve agreed to a Daily Accommodation Payment of $120 per day. So they’re paying 100% of their room price through the daily cost. The DAP will then be indexed on the 20th of September 2025 to adjust for any changes in their value. So the first step that will need to happen here is to work out the resident’s indexation factor and using that to work out their DAP. This is a little bit complicated. I apologise. But the provider will need to work out the DAP indexation factor by using the new DAP index number divided by the previous DAP index number and then multiply this by the full DAP. So in this scenario we have a DAP indexation factor of 1.5% and so the indexed DAP is calculated by multiplying the original $120 per day by 1.015 to get to a DAP of $121.80. 

So what this means for providers and for residents is that DAPs will change over time. We’ll move away from a flat rate of that $100 a day for however long you stay in care to something that moves up with the Consumer Price Index and gradually increases over time. This ensures that payments remain aligned with current economic conditions and also ensures that residents are protected against larger than inflation rate increases and ensures that an aged pensioner does not end up paying more as a share of their pension income for the DAP over time and it remains consistent. 

There are a few other accommodations that I’ll briefly touch on before we move across to the higher everyday living fee. So the first of these is what we call the accommodation agreement which currently a resident must enter into. Under the new Aged Care Act an individual and their provider must enter into an accommodation agreement before they enter residential aged care. Previously the requirement was only that the price had to be agreed before entry. This new arrangement also means that a resident no longer has to make a decision about whether they wish to pay a RAD within 28 days of entering care. Currently a person enters residential aged care and they must nominate if they want to pay by a RAD even if they need to take a little bit longer to be able to actually make that deposit. Under the new Act a resident can make this decision at any time but if they have not made the decision to pay by RAD and pay that RAD they’ll be required to pay a DAP until such time as they’ve made that lump sum deposit. 

The existing arrangements allow a person to top up or pay a RAD at any time. The current 28 day requirement places unnecessary pressure on an individual to make what is a very important and big financial decision. 

The second of these extra changes is that the Daily Accommodation Contribution cannot exceed the agreed price. This is addressing a bit of an anomaly in the current system. There are some rare circumstances where a person can agree a price from a room only to find that because they are partially supported for their aged care accommodation costs they could actually be asked to pay a higher amount per day than that Daily Accommodation Payment rate that they thought they had agreed to. So under the new Act a person who is low means and partially supported for their accommodation costs can only be asked to pay the lower of the maximum accommodation supplement amount payable to that provider for that day or the amount assessed for them based on their individual means assessment or the amount of accommodation payment for that room at the individual’s start day in care. As a result this means that registered providers can no longer accept more than the agreed price from any individual. 

There’s a couple of reviews still to come in accommodation. The first of these is a review of accommodation pricing. This will consider a range of things including accommodation supplement rates and some of the unresolved accommodation questions from the Aged Care Taskforce around the relationship between RADs and DAPs and incentives for providers to maintain quality accommodation and encouraging providers to accept low means participants. And then the second of these is a review on the potential future phase out of RADs. The Aged Care Taskforce recommended subject to a review in about 2029 or ’30 that the Government of that time then look to phase out RADs from 2035. This is in response to a Royal Commission recommendation which reflected concerns about the sector’s reliance on RADs. Now an independent review in 2029-30 will consider this further, would consider the impact and feasibility of phasing out RADs. So at this stage there is no change on the acceptance of RADs and that would be a decision made by the Government of the day at that time subject to a review of feasibility. 

So the RAD/RAC retention arrangements and DAP indexing arrangements will not apply to everyone from the 1st of July. These will only apply to people who first enter residential care after the 1st of July this year. It will also apply to even those who are eligible for the no worse off principle under Support at Home, that if they have not entered residential care before the 1st of July they will also pay under the new accommodation arrangements. 

When new arrangements like this are implemented though it is common practice to not disturb the arrangements already in place for existing residents. And consistent with this anyone who is in permanent residential care before the 1st of July this year will remain under their existing arrangements for fees and payments while they remain in their current aged care home. This means that the RAD/RAC retention arrangements and DAP indexing arrangements will not apply to them while they remain in their current aged care home. This protection is also extended to a person who moves from one service to another providing they haven’t made a personal choice to opt in to the new consumer arrangements and providing they haven’t moved permanently out of care for an extended period. I’ll show you a couple of examples of these in the next couple of slides. 

So this slide has some animations so the information will appear as we go through it. As noted earlier people who enter permanent residential care on or after the 1st of July for the first time will be subject to both RAD retention and DAP indexation. Or if they only pay for a RAD they’ll pay RAD retention. If they only pay for a DAP they’ll only be subject to DAP indexation. This includes anyone who’s moving in for the first time even if they’re eligible for the no worse off principle in Support at Home. 

For individuals in permanent residential care on the 1st of July 2025 who have fees set under the 2014 fee arrangements as people in permanent residential care have already entered into an accommodation agreement with their provider neither the RAD/RAC retention or DAP indexing arrangements will automatically apply to them. This is the case while the residents remain in the same service and is also the case if they move directly from one service to another. Even though they’ve entered into a new accommodation agreement they are still eligible to be treated as though they were in that facility before the 1st of July. 

If however these residents are discharged from care for more than 28 days after the 1st of July and then re-enter permanent care they will be subject to the new arrangements. So they would need to pay retention on a RAD or have their DAP indexed. And that’s irrespective of whether they have opted into the new fee arrangements. 

The second way that the accommodation reforms will apply is when a resident moves services after they have opted in to the post 2025 fee arrangements. If a person chooses to pay their means tested fees under the 2025 arrangements because they believe it’s in their best interests to do so none of the changes to RADs and DAPs would apply to them whilst they remain in their current service. However if they then after opting in to the post 2025 fee arrangements chose to move to a new residential care service they would be subject to the RAD retention and DAP indexing arrangements. 

Now for those of you who were in permanent care under the pre-2014 fee arrangements – and there’s still a few thousand people in this situation – recognising that those who had fees set before the 1st of July 2014 will have entered into an accommodation bond or accommodation charge agreement, neither the RAD or RAC retention and DAP indexing arrangements will apply on commencement of the new Aged Care Act. This is the case while they remain in the same service and if they move from one service to another even though a new accommodation agreement will be entered into. Unlike individuals in the 2014 fee arrangements leaving permanent care for more than 28 days will not result in RAD/RAC retention or DAP indexation arrangements automatically being applied to them when they re-enter care. 

If a resident in this group opts into the post 2025 fee arrangements however they will not have the RAD/RAC retention and DAP indexation arrangements apply to them if they remain in the same service. However if they move to a new residential care service after opting in to the 2025 fee arrangements DAP indexation arrangements will apply. However we will exempt them from the RAD/RAC retention arrangements as they have previously paid retention on their accommodation bond under the pre-2014 arrangements. 

I will now pass across to Adriana to introduce the higher everyday living fee. I’ll be back with you all a little bit later. 

Adriana Platona: 

[Visual of slide with text saying ‘Higher Everyday Living Fee’] 

Thank you Susan and hi everyone. My name is Adriana Platona. I’m the First Assistant Secretary here in Canberra in the Residential Care Division and I’ll be speaking to you about the principles of higher everyday living fees and the changes that the new Aged Care Act brings into force from 1st of July this year. 

You may know that the Aged Care Taskforce has recommended that residents and providers should be able to negotiate higher quality daily living services for a higher fee as long as the provider meets important protections for the resident. In line with that recommendation the new Aged Care Act includes provision for this optional higher everyday living fee.  

So the Act from 1st of July does two things. First of all it replaces two types of fees that exist now for higher quality services. They are called the extra services fee and additional services fee. But the Act also introduces and makes significant progress on consumer protection in this area. So by allowing residents to pay for additional services the residents will benefit because they are going to have an option to receive tailored additional services to suit their individual needs. Providers will also have the opportunity to differentiate their service and attract new residents by offering a range of goods and services that are outside what they are normally required to provide. But in doing so the new fee will offer much more consumer protection. It will be much more transparent, equitable and at the same time competitive. 

All permanent and respite residents can choose to purchase higher everyday living services. The type of goods and services to be included and the proposed fee structure is a decision of the individual providers. Importantly, and I wish to stress this, while residents can agree to pay a higher fee for higher quality services this does not mean that those who do not agree to pay a higher everyday living fee will not receive a good quality of care and services. The higher everyday living fee is simply about things that are above and beyond what the required standards are for a residential care service. So my advice to everyone is know the standard that everybody is expected to meet in the provision of residential care services before making the decision on adding optional extras. 

So the price of the higher everyday living fee services will be set by providers in line with the current market and will have to be transparent, have to be competitive, and will have to be provided in writing and will have to be – the services, the list of services and the costs will have to be on their website. 

Those prices will not need any kind of regulatory approval. It will be set by the providers and will be discussed and agreed transparently between the service provider and the resident. As I already said the new Aged Care Act introduces significant provisions for consumer protection and that is an advancement on the consumer protections that currently exist in place. Firstly a resident cannot be asked to agree to a higher everyday living fee until after they have moved into a residential aged care facility. This is to ensure no one feels pressure to agree to pay for services they don’t want in order to secure a place. There is an order affecting here which is the place needs to be secured first and then options can be discussed and negotiated and agreed later on. And this is an important point that we wanted to stress because the higher everyday living fee is optional. Providers cannot require a resident to agree to a higher everyday living fee before they enter aged care in order to secure a place. You also cannot be offered or asked to sign a higher everyday living agreement until you are already in residence in your selected residential aged care home. Any decision to not sign the higher everyday living agreement or to cancel at a later date cannot affect your place. 

Even after agreeing to a higher everyday living fee residents will have 28 days to change their mind. A resident cannot be asked to pay for a service that they cannot use. If for example a person’s health changes in a way that means that they can no longer use a particular service in their agreement the provider must stop charging them for this service within 28 days. The provider and resident must also do a yearly review of the higher everyday living fee agreement to ensure that the resident still wants the services. Providers can choose to offer a more frequent review if they wish. 

So those are new provisions for people entering residential care from 1st of July 2025. For those individuals that already have extra services fees and additional services fees in place there will be a transition period of 12 months finishing on 1st of July 2026. So providers will have 12 months to transition residents on existing additional service fee or extra service fee agreements to the new higher everyday living agreement. The new higher everyday living fee is optional and residents are not obliged to agree to a new higher everyday living agreement at the end of this transition period unless they are satisfied they are able to benefit from the additional goods and services being offered by their provider. All new residents entering residential aged care from 1st of July 2025 who wish to take up higher everyday living services on offer from their provider will need a higher everyday living agreement. 

So I’m going to stop here and ask Susan to take over with more details Thanks Susan. 

Susan Trainor: 

Thanks Adriana. I’ll take you through a little bit more detail here about the higher everyday living fee and what we mean when we talk about standard and not standard services. So the higher everyday living fee is based on services only and it cannot include charges for accommodation regardless of the room a person occupies. Costs for accommodation should be paid through the RAD or the DAP. For other items on the residential care service list providers will need to be able to demonstrate that what they are offering is of a higher quality than what they are required to provide for all residents as part of the standard service. This slide provides a few examples of what we mean by standard services versus what we consider high quality. It’s then up to a particular individual to decide for themselves if they think that that additional quality meets their personal preferences and is worth the additional cost. 

I won’t go through all of these examples but to take just one or two. The service list requires that a person is offered a variety of non-alcoholic beverages such as water, milk, fruit juice, tea and coffee and three meals per day with the option of dessert with either lunch or dinner plus morning tea, afternoon tea and supper. To be able to charge a higher everyday living fee for food or drinks the provider would need to offer a standard higher than this. They may offer drinks that are a type not on the list such as soft drink, or they may offer drinks that are at a higher quality than those specified with the service list such as coffee made by a barista. Meals that could be attracting a higher everyday living fee would include those using a superior quality meat cut, a wider variety of foods than is required by the service list or higher quality than is required by the service list. So I mentioned before there must be the option of dessert with lunch or dinner. It could include you get dessert with both lunch and dinner. 

It's also possible for providers to offer things through the higher everyday living fee that are outside the service list offerings rather than just of a high standard and this could include some of those little extras that people enjoy as part of day to day life like a newspaper delivered to your room each morning. 

As Adriana already mentioned several thousand existing residents are currently paying for and receiving additional services through an extra services fee or additional services fee agreement. These concepts simply don’t exist under the new Aged Care Act and will no longer be supported. So no new extra services fee or additional services fee agreements can be made after the 30th of June 2025. If a person is entering permanent residential care on the 1st of July or beyond and they would like to pay for higher quality services that can only be done through a higher everyday living fee.  

We will progressively see people who are already in care on extra services fees and additional services fees moved across to the new system over 2025 and ’26. This will move away from the current two fee structure model to a single condition arrangement, remove a lack of clarity and transparency with the additional services fee and ensure that those who are paying for additional services under the current arrangements can benefit from those new consumer protections that Adriana took us through. If someone would like to continue to receive higher everyday living services beyond 1st of July 2026 and are already on one of these they will need to work with their provider to transition from their current agreement to a new higher everyday living fee agreement. The conditions under their current agreement will remain active until either the 30th of June next year or until they’ve agreed on a higher everyday living fee and at which point that agreement will take over. 

That new higher everyday living agreement can be made any time from the 1st of July this year until the 30th of June 2026 but it’s up to a provider and resident to agree as to when this might happen. But it must be done before the 30th of June 2026. 

I’m now going to take you through a quick example. This again has some sort of action slides. So you’ll see the bits stepped out as I talk through them. So in this example John’s been approved to enter residential aged care. After researching various aged care facilities John is meeting with Great Stay Homes to discuss his entry into their facility. John meets with David a representative of Great Stay Homes and is given a tour of the home and some brochures and information about the fees and costs of each service. During that tour they discuss some of the services that are offered including what extra services might be available if John entered a higher everyday living agreement and paid a higher everyday living fee. 

John’s very interested in this and he chooses Great Stay Homes in part because of those higher everyday living services. John signs an accommodation agreement but not yet a higher everyday living agreement and makes arrangements to move into the Great Stay Homes. 

Once John has moved in David asks him whether he would like to sign a HELF agreement and agree to some higher everyday living services. John decides on what he wants and signs an agreement to pay and receive a subscription TV service, a daily newspaper and a weekly Tai Chi class. He signs a higher everyday living agreement and agrees to pay additional costs for these services. Now from the date that John signs that agreement he has 28 days to decide if those additional services are what he wants and that he’s seen the value for money in those services he's receiving. After 28 days he can just choose to continue or to cancel the agreement. In this case John decides he’s enjoying the services and agrees to continue. 

But six months later John’s mobility has declined and he can no longer attend the Tai Chi class. Because this is a change based on his health status and his ability to use the service his provider must let him cancel with 28 days’ notice. He also finds he’s not watching the TV service as much and he wants to stop paying for it. However because he’s still capable of using this this is something that the provider does not have to agree to until his annual review of his higher everyday living agreement. 

Two months later the facility adds a barista and offers a daily coffee as a new health item. The provider is willing to add this to John’s agreement since it’s adding an extra service that he’s agreed to pay more for. At the end of 12 months David advises John that it’s time for them to review his higher everyday living agreement. During that review John can agree to maintain the current goods and services and roll his agreement over for another year, add new goods or services if they’re being offered, or remove some goods and services from the service agreement or cancel the agreement entirely and say he no longer wants to receive any higher everyday living services. 

I think the next slide here will show you all some QR codes that will take you through to some resources that we have available on our website that provide a little bit more information on some of the topics that we’ve covered today. Otherwise I’ll pass back to Nick to take us through a couple of questions and answers. 

Nicholas Hartland: 

So thanks very much Susan. So we’ve got time for just a couple of questions and answers. And as I said these are from material that was submitted to us earlier. And we apologise again for not having a live Q&A session. They’re always pretty lively and we enjoy them as much as you do. But nonetheless. So I think this is for Adriana first. 

Q: Will the current agreements be automatically cancelled on the 30th of June 2026 even if I’ve not signed for a new one? 

Adriana Platona: 

So the answer to that is yes. The current extra service fee and additional service fee agreement will automatically be cancelled on 30th of June 2026 if a new higher everyday living fee is not agreed. So they cease to exist. They don’t exist as a concept for new residents. They cease to exist from 1st of July and then for existing residents there is a transition period of 12 months after which everyone if they wish to be on optional additional services and goods will have to be in the form of a higher everyday living fee arrangement. 

Nicholas Hartland: 

Thanks very much. 

Q: What happens if the residential aged care home and I do not agree on the services utilised under the higher everyday living fee? Who would mediate this if there’s a dispute? 

Adriana Platona: 

So this is a contract and it’s subject to a discussion and a conversation and an agreement between the provider and the resident in line with normal contract arrangements. And any other contract there would be appropriate arrangements for mediation and settlement of disputes that would be normally included and should normally be included in the standard terms and conditions of a contract. 

I think if the resident believes at any point that the provider is not complying with the terms of the written agreement and the matter cannot be settled then the resident can raise the concerns with the Aged Care Quality and Safety Commission complaints area. Thanks Nick. 

Nicholas Hartland: 

Thanks very much. Susan we might jump to a question that’s about property and assets now, going back to accommodation. 

Q: What impact will my property and assets have when my partner enters into care particularly on both of our fees? 

Susan Trainor: 

Sure. So there’s been no change to the treatment of income and assets for a couple. If a person entering care is one half of a couple half the combined income and assets of both members of the couple is included in the assessment. And that’s regardless of who earns the income, whose name the asset is held in and who is entering care. For aged care purposes a person’s considered to be a member of a couple even if they’re permanently living apart for health related reasons. So a care recipient’s former principal home, so that’s the home that they were living in before entering care, is exempt from the aged care means assessment while still occupied by what we call a protected person. So a protected person includes their spouse, partner or dependent child. It also includes a close relation who’s lived with the care recipient for five years or a carer who’s lived with them for two years. However they must be considered eligible for Government income support to be considered a protected person. 

If a former principal home is not occupied by a protected person the value of the home is included in the means assessment including for accommodation costs. However the value of it as an asset is capped. That cap is currently $206,663.20 and that’s indexed on the 20th of March and 20th of September each year. If the home is owned by a couple and both partners are in residential care the home is counted as an asset in the means assessments for both partners. The cap and the value of the home is applied for each member. And a care recipient’s fees may change as a result of changes in their personal or financial situation including if their partner enters care after they do. 

Nicholas Hartland: 

Thanks. That’s excellent. I might also ask you to talk about how the figure of the $750,000 was arrived at if that’s possible Susan. Because this is an important part of the new settings. 

Susan Trainor: 

Yes. I certainly can. So as we spoke about a little bit earlier the maximum accommodation payment amount that a provider can charge without prior approval from the Independent Health and Aged Care Pricing Authority or IHACPA went from $550,000 to $750,000 on the first day of this year. This is a change in the point at which providers need to obtain regulatory approval rather than a cap or an increased cost for any one person. This is a change that was recommended back in 2017 by the Tune review and then the Aged Care Taskforce in 2023 backed it in and recommended an immediate move to align with the recommendation of the Tune review before then indexing the maximum room price over time. And these changes address the fact there’s been no uplift in that price for more than ten years since it started on the 1st of July 2014 despite very significant increases in construction costs as well as general living costs over that time period. 

I think there’s a sort of second half of the question that I have here which is about supported residents and requirements for providers to accept residents who don’t pay that lump sum or the Daily Accommodation Payment but who are supported. There’s no requirement for a provider to reserve rooms for supported residents but to incentivise providers to accept people who are supported for their aged care costs the Government does pay a higher rate of what we call the accommodation supplement for services that have more than 40% of their residents eligible to receive the accommodation supplement or what we call supported residents. This provides an important incentive for providers. We know that there’s probably a bit more than 40% of residents across the system are eligible for some level of support with their accommodation costs. And providers may choose to maintain a supported resident ratio we call it of 40% above to increase the amount of accommodation supplement that they’re eligible for. And they receive that higher rate for every single supported resident in their care. 

Nicholas Hartland: 

And I think we might just go back to HELF and Adriana for one final question before we wrap up. 

Q: What will happen if the residential aged care home increases the higher everyday living fee to more than I’m paying now and I can’t afford the increased fee? 

Adriana Platona: 

Thanks Nick. So the higher everyday living fee can only be increased annually in line with the Consumer Price Index. And if a person believes that they are unable to continue to afford the proposed fees then the agreement can be cancelled by giving the provider 28 days’ notice. But this is on the grounds of affordability, no longer be able to afford to pay the proposed fees. Thanks Nick. 

Nicholas Hartland: 

Thank you very much. All right. So I think great. Thank you Susan and Adriana for those presentations. And just a couple of things from me before we wrap up. Firstly thank you everybody who’s participated. And remember the slides are available from our website. We will also release some frequently asked questions that respond to some of the questions that we’ve received before this webinar. And just as you’re going, when the webinar finishes a short survey will pop up in your browser. It will take about a minute to answer four questions. We’d really appreciate it if you could take a moment to answer those questions because it gives us valuable feedback about how to communicate better.  

And on that note thank you again for everybody who took the time out to listen to us today. 

[Closing visual of slide with text saying ‘agedcareengagement.health.gov.au’, ‘Phone 1800 200 422’, ‘(My Aged Care’s free call phone line)’] 

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