Aged Care Reform: An Overview of Change
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By Nikki Stefanoff
At the end of 2024, Australia’s aged care system stood on the brink of long-overdue reform.
The Senate had approved the federal government’s Aged Care Bill, and with smooth passage through Parliament, the new Aged Care Act was confirmed to take effect on 1 July 2025.
Australia’s aged care system had remained largely unchanged since 1997 – despite the evolving needs of older Australians.
Calls for reform reached a turning point in 2021 when the Royal Commission into Aged Care Quality and Safety released its final report, Care, Dignity and Respect, exposing widespread neglect, substandard care, and systemic failure.
The urgency for change became undeniable.
What’s changing?
The new Aged Care Act is set to introduce a rights-based approach, shifting from a provider-driven system to one centred on the individual.
Major changes are aimed at improving the quality of care, increased provider accountability and a fairer system of funding.
These reforms are said to include:
1. Introduction of the ‘support at home’ program. This is a $4.3 billion initiative to help older Australians stay independent and remain in their homes. It’s set to replace fragmented home care services with a single, needs-based system.
2. Increased consumer contributions. It’s thought that many older Australians will be expected to pay more for their care, with wealthier people being asked to contribute more money than those on lower incomes. Those exact figures are yet to be released.
3. Aged care providers will be allowed to keep 2% per year (for a maximum of 5 years) of a resident’s ‘refundable accommodation deposit (RAD), the fee someone pays when they enter residential care. At the moment, that deposit is fully refundable.
4. Introduction of new civil penalties for aged care providers, as well as stricter oversight to hold them accountable for breaches in care standards.
5. Regulators will get greater investigative powers to ensure compliance and protect vulnerable residents. A move that aims to ensure higher standards within the aged care system.
It’s worth noting that people already in the aged care system won’t need to pay more. However, Australians entering the system from mid-2025 onwards will be assessed under the new means-testing formula.
The main themes of change
For those working in human-centred design, the overarching themes of the new act will seem familiar.
- Person-centred care – Support tailored to individual needs, preferences, and cultural backgrounds.
- Access and inclusion – Ensuring care is equitable and available to all.
- Stronger frameworks – Simplified systems, clearer regulations, and improved quality standards.
In short, it’s a shift away from the provider-centric approach we’re used to seeing from governments and a move towards putting individual needs at its core.
The Scandinavian model of aged care is an example of this in action.
Renowned for its emphasis on dignity, independence, community and high-quality care, the model consistently puts a strong focus on ageing in place – something the majority of older Australians say they want to do.
Ageing in Place: The Preferred Choice
Most older Australians want to age in place – remaining in their own homes and communities for as long as possible. It’s an approach that fosters familiarity, social connection, and autonomy.
“We’ve heard the message from older Australians: they want support to stay in the homes and communities they love,” said the aged care minister, Anika Wells at the time the reforms were announced.
The hope is that the introduction of this $4.3 billion ‘support at home’ program can make this a reality for more Australians.
However, its success depends on accessible housing, home care services, and financial security, all of which remain challenges in Australia, particularly for non-homeowners.
Designing a Better Aged Care System
The new Act presents a unique opportunity to embed human-centred design (HCD) principles into aged care services. This means:
- Addressing physical, cognitive, emotional, and social needs before making care decisions.
- Designing accessible environments that promote independence and reduce reliance on assistance.
- Supporting telemedicine and remote monitoring to enhance in-home care.
- Developing training programs that immerse caregivers in real-world scenarios, improving problem-solving and empathy.
By prioritising people over providers, Australia now has the chance to create an aged care system that is intuitive, inclusive, and effective.
If human-centred design has shown us anything, it’s that when we focus on real needs, we create solutions with real impact.
