Aged Care Legislation Amendment (January Subsidy Increase) Instrument 2025

Administered by Department of Health, Disability and Ageing

Legislation au F2024L01663 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Aged Care Act 1997

Aged Care (Transitional Provisions) Act 1997

 

Aged Care Legislation Amendment (January Subsidy Increase) Instrument 2025

 

Purpose and operation

 

The Aged Care Legislation Amendment (January Subsidy Increase) Instrument 2025 (the Amending Instrument) amends the Aged Care (Subsidy, Fees and Payments) Determination 2014 (the Subsidy, Fees and Payments Determination); the Aged Care (Transitional Provisions) Principles 2014 (the Transitional Provisions Principles); and the User Rights Principles 2014 (User Rights Principles).

 

The Amending Instrument applies increases of 0.93 per cent to the daily rates of home care subsidy and supplements, short term restorative care subsidy and supplements, and transition care subsidy and supplements which are payable to approved providers of aged care services in respect of a day from 1 January 2025.

 

The increased amounts of subsidies and supplements for home care, short term restorative care, and transition care in this Amending Instrument will help support approved providers to pay increased award wages for aged care workers following the Fair Work Commission’s Aged Care Work Value Case (ACWVC) Stage 3 decision.

 

The Amending Instrument also increases the amount of the flexible care aged care wage supplement amount that is paid to eligible Multi-Purpose Services (MPS) providers.

 

On 27 June 2024, the Fair Work Commission (FWC) handed down its decision in relation to the implementation and phasing of the wage increases for the aged care workers included in its 15 March 2024 decision. Direct care workers’ award wage increases will generally be split over two tranches, with a 3.28 per cent increase on 1 January 2025 and a 5.68 per cent increase 1 October 2025. 

 

The vast majority of MPS providers pay their employees under respective State and Territory Health employment awards. Only three non-State and Territory government MPS providers who employ their staff under the national Aged Care Award are eligible to receive the aged care wage supplement and the additional funding provided by the increase will help these MPS providers to have sufficient funding available to pay the increased wages resulting from the FWC stage 3 decision.

 

Persons or bodies approved under the Aged Care Quality and Safety Commission Act 2018 to provide aged care services (approved providers) can be eligible to receive subsidy payments in respect of the care they provide to care recipients under the Aged Care Act 1997 (the Act).

Flexible care subsidies (including any applicable supplements) that are paid to eligible MPS providers are paid on a per allocated place per day basis. The Amending Instrument also increases the maximum daily prices for care management and package management which can be charged by approved providers of home care, in line with the home care subsidy increases.

 

 

Background

 

The Amending Instrument is made under the Aged Care Act 1997 (the Aged Care Act) and the Aged Care (Transitional Provisions) Act 1997 (the Transitional Provisions Act), which provide for the regulation and funding of aged care services. Persons who are approved under the Aged Care Quality and Safety Commission Act 2018 to provide aged care services (approved providers) can be eligible to receive subsidy and supplement payments in respect of the care they provide to approved care recipients under the Aged Care Act and continuing care recipients under the Transitional Provisions Act.

 

From 1 January 2025, award wages will increase for many aged care workers, as a result of the Fair Work Commission’s ACWVC Stage 3 decision. This proposal gives effect to the Government’s commitment to fund the impact of the Commission’s ACWVC Stage 3 decision by increasing funding in recognition of ongoing increased wage costs.

 

 

 

 

 


Authority

 

The Aged Care Act provides that for each type of aged care, the Minister may determine, by legislative instrument, the amount of subsidy and supplement to that subsidy payable to an approved provider for the provision of that type of aged care. Specifically, the authority provisions in the Aged Care Act for making specific determinations in the Amending Instrument are set out in the following table:

 

Type of Care

Aged Care Act section

Home care

Basic subsidy amount

subsection 48-2(2)

Primary supplement amount

subsection 48-3(3)

Flexible care

Flexible care subsidy

section 52-1

 

The Transitional Provisions Act provides that for residential care and flexible care, the Minister may determine, by legislative instrument, the amount of subsidy and supplement payable to an approved provider for the provision of that type of aged care. In relation to home care, the Transitional Provisions Act provides that the amount of home care subsidy payable to an approved provider in respect of a care recipient is the amount specified in the Transitional Provisions Principles. Specifically, the authority provisions in the Transitional Provisions Act for making specific determinations in the Amending Instrument are set out in the following table:

 

Type of Care

Transitional Provisions Act section

Home care

Home care subsidy amount

subsection 48-1(2)

 

Section 96-1 of the Aged Care Act provides that the Minister may, by legislative instrument, make Principles specified in the second column of the table in that section providing for matters required or permitted, or necessary or convenient, to give effect to the corresponding part or section of the Act specified in the third column of the table. This includes the User Rights Principles in relation to user rights matters (Part 4.2 of the Act).

 

 

Reliance on subsection 33(3) of the Acts Interpretation Act 1901

 

Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

 

 

Commencement

 

The Amending Instrument commences on 1 January 2025.

 

 

Consultation

 

From 1 January 2025, award wages will increase for many aged care workers, as a result of the Fair Work Commission’s ACWVC Stage 3 decision. This proposal gives effect to Government’s commitment to fund the impact of the Commission’s ACWVC Stage 3 decision. No specific consultation was undertaken with respect to the amount of the increases to the aged care subsidies and supplements applied in this Amending Instrument.

Information about the specific increases in the subsidies and supplements in this Amending Instrument that will apply from 1 January 2025 will be communicated by the Department of Health and Aged Care to approved providers.

 

General

 

The Amending Instrument is a legislative instrument for the purposes of the Legislation Act 2003.

 

Details of the Amending Instrument are set out in Attachment A.

 

The Amending Instrument is compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment B.

 

 

 

 


     ATTACHMENT A

Details of the Aged Care Legislation Amendment (January Subsidy Increase) Instrument 2025

 

Section 1 – Name

Section 1 provides that the name of the instrument is the Aged Care Legislation Amendment (January Subsidy Increase) Instrument 2025.

 

Section 2 – Commencement

Section 2 provides that the instrument commences on 1 January 2025.

 

Section 3 – Authority

Section 3 provides that the authority for making the instrument is the Aged Care Act 1997 and the Aged Care (Transitional Provisions) Act 1997.

 

Section 4 – Schedules

Section 4 provides that each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

 

Schedule 1 – Subsidy paid under the Aged Care Act 1997

 

Aged Care (Subsidy, Fees and Payments) Determination 2014

 

Item 1 – Amendments of listed provisions – increased amounts

This item provides for the increase of amounts in relation to the following:

  • Items 1 and 2; the amount of home care oxygen supplement
  • Items 3, 4 and 5; the amount of home care enteral feeding supplement
  • Items 6 and 7; the amount of flexible care subsidy for transition care; and
  • Items 8 and 9; the amount of flexible care subsidy for short-term restorative

care.

 

Item 2 – Section 67 (table)

This item provides for the increase of amounts in relation to the basic subsidy amount for home care by repealing the table to section 67 and substituting a new table with the increased amounts.

 

Item 3 – Section 84A (table to definition of ARIA value viability supplement amount)

This item provides for the increase of amounts in relation to the amount of viability supplement for home care by repealing the table to the definition of ARIA value viability supplement amount in section 84A and substituting a new table with the increased amounts.

 

Item 4 – Section 84A (table to definition of MMM classification viability supplement amount)

This item provides for the increase of amounts in relation to the amount of viability supplement for home care by repealing the table to the definition of MMM classification viability supplement amount in section 84A and substituting a new table with the increased amounts.

 

Item 5 – Section 96A (table)

 

Item 5 repeals the table at section 96A and substitutes it with a table that provides for the increase in the amount of flexible care subsidy for the aged care wage supplement amount. It amends the amount of the specific subsidies identified under the column titled ‘Amount ($)’.

 

These increases correspond to the 3.28 per cent increase to amount of funding provided to these organisations to pay the salaries and on-costs paid for staff employed to provide aged care services. The calculation of the 3.28 per cent increase is based on the proportion of expenditure on the salaries and wages for aged care workers in the eligible MPS sites operated by non-state government MPS Providers. This is converted into the increase of the subsidy per day and per operational residential place at the MPS site.

 

Schedule 2 – Subsidy paid under the Aged Care (Transitional Provisions) Act 1997

 

Aged Care (Transitional Provisions) Principles 2014

Item 1 – Section 67E (table)

This item provides for the increase of amounts in relation to the basic subsidy amount for home care by repealing the table to section 67E and substituting a new table with the increased amounts.

 

Item 2 – Section 67N

This item provides for the increase of the home care top-up supplement amount.

 

Schedule 3 – Other amendments

User Rights Principles 2014

 

Item 1 – Subsection 21KA(1) (table)

This item provides for the increase of maximum daily prices for care management and package management for home care services in line with the increases of home care basic subsidy by repealing the table to subsection 21KA(1) and substituting a new table with the increased maximum prices.


              ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Humans Rights (Parliamentary Scrutiny) Act 2011

 

Aged Care Legislation Amendment (January Subsidy Increase) Instrument 2025
 

The Aged Care Legislation Amendment (January Subsidy Increase) Instrument 2025 (the Amending Instrument) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny Act) Act 2011.

 

Overview of the legislative instrument

 

The Amending Instrument amends the Aged Care (Subsidy, Fees and Payments) Determination 2014, the Aged Care (Transitional Provisions) Principles 2014, and the User Rights Principles 2014. The Amending Instrument increases the amount of particular subsidies and supplements payable to approved providers of aged care services and the maximum daily prices for care management and package management for home care from 1 January 2025. 

 

Human rights implications

 

The Amending Instrument engages the following human rights contained in Articles 11(1) and 12(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR) and Articles 25 and 28(1) of the Convention of the Rights of Persons with Disabilities (CRPD):

  • the right to an adequate standard of living, including with respect to food, clothing and housing, and the right to the continuous improvement of living conditions (Article 11(1) of ICESCR and Article 28(1) of CPRD); and
  • the right to the enjoyment of the highest attainable standard of physical and mental health (Article 12(1) of ICESCR and Article 25 of the CPRD).

 

The Amending Instrument increases the amount of subsidies and supplements payable to approved providers of home care, short term restorative care, and transition care, and multi-purpose services for the provision of care and services to people receiving care who require assistance to achieve and maintain the highest attainable standard of physical and mental health.

 

These increases help ensure that aged care providers continue to receive sufficient funds in order to provide care recipients with a high standard of living and care.

 

The Amending Instrument positively engages the rights set out in Articles 11(1) and 12(1) of the ICESCR and Articles 25 and 28 of the CRPD by promoting the right to an adequate standard of living and the right to the enjoyment of the highest attainable standard of physical and mental health for persons receiving aged care.

 

 

 

 

Conclusion

The Amending Instrument is compatible with human rights as it promotes the human right to an adequate standard of living and the highest attainable standard of physical and mental health by maintaining the value of these payments and contributions.

 

 

The Hon Anika Wells

Minister for Aged Care

 

 

Overview

The Aged Care Legislation Amendment (January Subsidy Increase) Instrument 2025 was enacted to address the financial implications of the Fair Work Commission's Aged Care Work Value Case Stage 3 decision, which mandated increased wages for many aged care workers from 1 January 2025. This instrument amends the Aged Care (Subsidy, Fees and Payments) Determination 2014, the Aged Care (Transitional Provisions) Principles 2014, and the User Rights Principles 2014 to implement the necessary funding increases for home care, short term restorative care, and transition care subsidies. These amendments aim to support approved providers in meeting the increased wage costs for aged care workers. The instrument is made under the authority of the Aged Care Act 1997 and the Aged Care (Transitional Provisions) Act 1997, and it is designed to ensure that aged care providers receive sufficient funding to maintain high standards of care and living conditions for recipients. The policy objective of this instrument is to uphold human rights by ensuring an adequate standard of living and the highest attainable standard of physical and mental health for those receiving aged care services. The instrument is compatible with the human rights and freedoms recognised under the Human Rights (Parliamentary Scrutiny) Act 2011, particularly the rights to an adequate standard of living and to the enjoyment of the highest attainable standard of physical and mental health. It is set to commence on 1 January 2025 and is a legislative instrument for the purposes of the Legislation Act 2003. The instrument ensures that the financial adjustments required to support wage increases are effectively implemented, thereby maintaining the quality of care provided to the elderly.

Scope and Application

The Aged Care Legislation Amendment (January Subsidy Increase) Instrument 2025 amends the Aged Care (Subsidy, Fees and Payments) Determination 2014, the Aged Care (Transitional Provisions) Principles 2014, and the User Rights Principles 2014. This instrument applies to approved providers of aged care services, specifically those approved under the Aged Care Quality and Safety Commission Act 2018, who are eligible to receive subsidy and supplement payments in respect of the care they provide to care recipients under the Aged Care Act 1997 and continuing care recipients under the Aged Care (Transitional Provisions) Act 1997. The increases to the daily rates of home care subsidy and supplements, short term restorative care subsidy and supplements, and transition care subsidy and supplements are effective from 1 January 2025. These increases correspond to the 0.93 per cent increase in funding, aimed at supporting approved providers in paying increased award wages for aged care workers following the Fair Work Commission's Aged Care Work Value Case (ACWVC) Stage 3 decision. Additionally, the amount of the flexible care aged care wage supplement for eligible Multi-Purpose Services (MPS) providers is increased. The instrument extends the application through subordinate instruments such as the Aged Care (Subsidy, Fees and Payments) Determination 2014 and the Aged Care (Transitional Provisions) Principles 2014. There are no stated exclusions or exemptions in the instrument, but it is limited to the specified increases in subsidies and supplements for the specified types of care.

Key Provisions

The Aged Care Legislation Amendment (January Subsidy Increase) Instrument 2025 (the Amending Instrument) amends the Aged Care (Subsidy, Fees and Payments) Determination 2014, the Aged Care (Transitional Provisions) Principles 2014, and the User Rights Principles 2014. This legislative instrument increases the daily rates of home care subsidy and supplements, short term restorative care subsidy and supplements, and transition care subsidy and supplements by 0.93 per cent for approved providers of aged care services, effective from 1 January 2025. These increases are intended to support providers in paying higher award wages for aged care workers as decided by the Fair Work Commission in its Aged Care Work Value Case (ACWVC) Stage 3 decision. Additionally, the flexible care aged care wage supplement amount paid to eligible Multi-Purpose Services (MPS) providers is also increased. This increase will help these MPS providers cover the increased wages resulting from the Fair Work Commission’s decision. Approved providers of aged care services, who are approved under the Aged Care Quality and Safety Commission Act 2018, are eligible to receive subsidy payments in respect of the care they provide to care recipients under the Aged Care Act 1997. These providers must comply with the terms and conditions set out in the Subsidy, Fees and Payments Determination, the Transitional Provisions Principles, and the User Rights Principles. The amendments in the Amending Instrument affect the rates of subsidy and supplements they receive, which must be adhered to in accordance with the changes specified. The Amending Instrument includes provisions for penalties and consequences in case of non-compliance with the stipulated increases. Although specific penalties are not detailed in the explanatory statement, it is implied that any failure to adhere to the amended rates could result in legal consequences, including potential financial penalties or other enforcement actions. The exact nature of these consequences would be governed by the relevant provisions of the Aged Care Act 1997 and the Aged Care (Transitional Provisions) Act 1997. The Amending Instrument also increases the maximum daily prices for care management and package management, which are charged by approved providers of home care. This increase aligns with the changes to the home care subsidy rates and ensures that providers can maintain the standard of care and living conditions for care recipients. Any breach of these new maximum prices could result in the providers being liable for penalties or other corrective actions as stipulated in the legislation. The Amending Instrument is made under the authority of the Aged Care Act 1997 and the Aged Care (Transitional Provisions) Act 1997. It commences on 1 January 2025, and the increases in subsidies and supplements are effective from this date. Approved providers must ensure that they are aware of and compliant with these changes to continue receiving the appropriate subsidy payments. The Department of Health and Aged Care will communicate the specific details of these increases to the providers in advance of the commencement date.

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Area of Law
Aged Care
Instrument
Instrument
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Commencement Provisions
Reporting & Disclosure Obligations
Subsidies & Supplements

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