Aged care task force funding recommendations - an expert summary

Aged Care Financial Advice


Aged care task force funding recommendations - an expert summary

It’s been three years since the Royal Commission into Aged Care Quality and Safety report revealed substantial deficiencies in the Australian Aged Care system. In June 2023 the Albanese government appointed the Aged Care task force comprised of aged care providers, ex-public servants, economic experts and advocates to examine the sector more closely and recommend funding options. On March 11 2024 the task force released its final report, recommending a complex series of means-tested extra payments and fees. 

In summary, the Aged Care task force report has made the following recommendations: 

  • Greater means-testing of home care services.
    Currently people are means-tested based upon income with generous thresholds resulting in most people not contributing to the cost of their home care package. Moving forward it is proposed that home care providers will have to develop more transparent service pricing lists, and home care recipients will only be charged for what they use, and personally contribute to those charges at different rates depending upon the category of service, and the recipient’s means. 

  • The Federal Government to fully fund nursing care in residential aged care. 
    Currently the nursing care component is partially funded by a resident co-contribution based upon income and assets (called the “means-tested care fee”). The taskforce concluded that nursing care costs in aged care can be “unexpected and significant, making it difficult for people to accurately plan for what their specific care needs and costs may be in old age and therefore the Government should fully cover these costs to remove anxiety and uncertainty about a person’s ability to cover these costs.”  
    Importantly the report notes that if the Government decides to continue means-testing the cost of nursing care, they should consider removing the annual cap and reviewing the lifetime cap that currently limit a resident’s co-contribution to these costs.
  • Resident co-contribution towards the non-nursing care costs such as food, laundry, and cleaning.  
    One of the findings of the Royal Commission was that the daily care fee paid by all residents did not sufficiently cover the costs of everyday living as paid by the aged care provider. In reflection of this, from 1 July 2023 the Government began paying all providers a “hotelling supplement” of $11.04 per day per resident to bridge this gap. The taskforce report recommends increasing this supplement and having residents make a co-contribution payment towards it based upon their means. The taskforce considers that these costs are what people paid before entering care therefore it is not unreasonable to expect them to contribute to these costs, based upon their means, after entering care. 
  • Means-testing to be simplified with thresholds being set at Full Pensioner, Part Pensioner or No Pension, and residents/home care recipients being means-tested accordingly. Importantly the cap on the value of the family home used for means-tested calculations is not changing. 
  • More flexible daily fee setting arrangements.
    Some aged care facilities charge a fixed additional service fee for better everyday living offerings such as Foxtel, a daily newspaper, wine with meals etc. Moving forward the taskforce recommends more transparent pricing of these services and allowing residents to negotiate which services they will receive for the payment of a higher daily care fee. This would provide a greater nexus between what the resident is paying for and receiving and remove restrictions upon the facility in what they can charge, subject to the relevant consumer protections being in place. 
  • Providers to retain a portion of accommodation deposit.
    Prior to 1 July 2014, aged care facilities were allowed to retain a portion of a resident’s capital used to pay an accommodation deposit when they left care albeit at a fixed rate. The taskforce has proposed the reinstitution of this “retention” payment to providers but recommended that it be levied at a variable amount based upon 3% of the deposit paid by the resident, over a maximum of five years, and be deducted periodically throughout the resident’s time in care.  
  • The phasing out of accommodation deposits by 2035 in lieu of daily payments to cover the accommodation cost of residential aged care. Accommodation costs to no longer be fixed at date of entry but indexed biannually. 
  • Continued support for low-means residents. 
    The taskforce has pledged to continue to support people of low means entering care or accessing home care services. 

Where to from here? 

The new thresholds for means-testing and the timing and implementation of these reforms is up to Government now, however the taskforce has recommended that they be grandfathered so as to not affect people already accessing home care or residential care. In terms of timing, there is a new Aged Care Act beginning on 1 July 2024 and it is anticipated that the Government will finalise these recommendations in the Federal Budget in May. 

If you or a loved one are impacted by these recommendations, or you would like to discuss your financial situation in relation to aged care, please contact our Aged Care expert Luke Andrews on   



This information is general in nature and is provided by Partners Wealth Group. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.