The New Aged Care Act
Introduction
The New Aged Care Act defines the next wave in aged care transformation. This wave of reform brings significant changes to home care funding, governance and regulation, and some progressive developments in residential care too.
With uncertainties on key details and the shrinking implementation window, even the best-prepared service providers acknowledge that there will still be work to do post 1 July 2025 to adapt to the new landscape.
A lot has been achieved but providers and their supporting IT vendors and advisors are inevitably having to implement some temporary measures to meet the time frames.
Furthermore, there is one big unknown that is difficult to predict – how will care recipients and their families respond to the funding changes – and what will be the knock-on impacts?
We look ahead to what comes next and how providers can adapt and thrive in the new environment. To navigate this, we’ve framed the transition using Maslow’s hierarchy of needs, a model that maps human development from basic survival to self-actualization. For providers, this translates to meeting essential operational needs before aspiring to excellence and innovation. We focus on home care, and how Rohling’s IT advisory and Financial Planning and Analysis services can help providers reach higher levels of maturity.
About Rohling
Rohling is an independent team of business, finance & IT advisors and implementors with deep experience in the aged care, disability and other care economy sectors.
With 13 years’ experience working in the care sector, we have helped 10 out of the top 25 aged care providers define and deliver holistic transformations in their business processes and IT systems. We are proud of the multi-year, multi-engagement collaborations we have with many of these providers.
We work in the spirit of service to our clients and the sector, where ethics, innovation, honesty, integrity and an equitable exchange of value are at our core.
Rohling’s Roadmap for Providers Post-1 July 2025
Level 1: Basic Needs – Operational Readiness by 1 July 2025
What Must Be Done?
At the base of Maslow’s hierarchy are physiological needs – survival essentials. For home care providers, this means having operational processes ready by 1 July 2025 to comply with the Support at Home program. Key requirements include:
| Funding Model Implementation | Managing quarterly budgets, government invoicing, and means-tested co-contributions under a new 10-level classification system (8 ongoing levels, 2 short-term). Providers must price services across clinical care, independence, and everyday living categories. |
| Single Assessment System | Integrating with the Integrated Assessment Tool for client assessments, replacing Regional Assessment Services (RAS) and Aged Care Assessment Teams (ACATs). |
| Quality Standards | Meeting Standards 1–5 of the Strengthened Aged Care Quality Standards, covering governance, safety, and person-centered care. |
| Financial Systems | Adjusting for a 15% wage increase (effective 1 January 2025) and new funding structures, ensuring accurate budgeting and reporting. |
RAC Context: RAC providers must comply with all eight quality standards and integrate with the Single Assessment System but continue using AN-ACC funding, requiring less drastic operational changes.
Challenges
Providers are struggling with gaps in government guidance, particularly around pricing and billing. The management fee cap of 10% (down from 20%) could have a material impact on provider margins and the complexity of managing 14 fee arrangements (10 new, 4 grandfathered HCP) for decades adds further strain.
Rohling’s Role
Rohling is already helping providers meet these critical needs with:
| Process Design | Streamlining pricing and billing workflows to ensure compliance and efficiency. |
| IT Advisory | Guiding the upgrade of systems to handle Support at Home funding and integrate with the Single Assessment System. |
| Financial Planning | Modeling budgets and co-contributions to maintain cash flow despite fee cuts. |
Timeframe: These must be in place by 1 July 2025. Providers should finalize interim solutions by June 2025 to avoid disruptions.
Level 2: Safety – Securing Compliance, Data Integrity and Financial Stability
What’s Needed?
Once basics are covered, providers must ensure operational and financial stability—Maslow’s “safety” level. This involves robust systems to meet regulatory demands and maintain data integrity and a sharp focus on financial drivers. Key tasks include:
| Compliance | Demonstrating adherence to quality standards through audits and reporting. Navigating increased oversight from the Aged Care Quality and Safety Commission, with new penalties for non-compliance. Complying with new prudential standards. |
| Transparency | Submitting accurate data for Star Ratings and the Find a Provider tool, now including financial details. |
| Cultural Safety | Implementing processes to deliver culturally safe care, especially for diverse populations. |
| Ensuring Profitability | Ensuring that revenues and costs align in the new operating model. |
RAC Context: RAC providers face similar compliance and transparency requirements but must meet all eight standards, with an additional focus on care minutes and nurse availability. The new prudential standards will have a more significant impact on residential providers due to the need to for greater coverage of refundable deposits.
Challenges
The additional complexity of varying co-contributions and service classifications makes compliance more challenging. So providers will need to keep a careful eye on compliance metrics.
This is where the greatest unknown will play out. Because clients will need to contribute more for some services, their usage patterns are likely to change. This could cause step changes in service take-up, impacting revenues and challenging operational models as providers have to reallocate resources to match the new patterns of service take up.
“We believe that providers will need to reassess how key financial drivers are tracking during the first quarter of operations and be prepared to let go of their current budget assumptions.”
Re-budgeting after the first quarter will allow all levels of management to focus on tracking against more meaningful targets and on performance optimization rather than re-explaining a one-off step change. The changes to funding will challenge profitability for at least some services. Providers must balance cost and quality to stand out.
Rohling’s Support
Rohling can bolster safety with:
| Data | Enhancing reporting for real-time, accurate reporting to satisfy transparency requirements. |
| Financial Diagnostics and Rebudgeting | A rapid, forensic assessment of revenue and cost drivers to reset the financial model. Reviewing cost allocation methodologies to increase margin transparency. |
| Operational and Financial Compliance Audits | Identifying gaps in compliance processes and defining fixes to meet standards. |
| Change Management | Equipping staff to handle cultural safety and regulatory demands. Preparing staff to handle the questions they will get asked. Preparing to deal with an increase in collection activities due to changes in client contributions. |
Timeframe: Basic compliance is required by 1 July 2025, but refining systems for full accuracy can take 1–3 months post-launch (July–September 2025). Budgets will likely need a reset at the end of the first quarter of operations.
Level 3: Social Needs – Enhancing Client Relationships
Why It Matters
With operations stable, providers can devote more effort to social needs – enhancing connections with clients. The Support at Home program empowers clients with greater choice, making engagement critical. Key tasks include:
| Client Choice | Supporting clients in selecting services within their budgets, aligned with the Statement of Rights. |
| Feedback Mechanisms | Implementing accessible complaint pathways to address concerns. |
| Stakeholder Collaboration | Partnering with other providers and My Aged Care for seamless service delivery. |
RAC Context: RAC providers also need feedback systems but focus on facility-based engagement, with less emphasis on client-driven service selection.
Opportunities and Hurdles
Strong client relationships can differentiate providers in a competitive market. However, complex fee structures could confuse clients, risking dissatisfaction if not communicated clearly.
Rohling’s Expertise
Rohling can help with:
| Engagement Tools | Developing and enhancing systems to simplify care planning and budgeting for clients. |
| Staff Skilling | Teaching teams to communicate the new system effectively [helping customers navigate through the changes]. |
| Collaboration Platforms | Facilitating integration with My Aged Care and other stakeholders. Defining and delivering systems to help clients who want to participate more closely in their care planning. |
Timeframe: Basic engagement tools are needed by 1 July 2025, but refining client-centric processes could be a medium-term goal (3–6 months post-launch, October 2025–January 2026).
Level 4: Esteem – Achieving High Performance
The Goal
At the “esteem” level, providers seek recognition through high performance. This involves:
| Star Ratings | Achieving top ratings with updated calculations from 1 July 2025. |
| Service Differentiation | Offering innovative care options, like assistive technology. |
RAC Context: RAC providers also aim for high Star Ratings but focus on clinical care and facility standards, with less flexibility in service offerings.
Challenges
Changes in the funding model and client take up of different services will likely impact some elements of the star rating calculation.
Rohling’s Role
Rohling can support with:
| Best Practices | Advising on service delivery to boost quality and customer satisfaction. |
| Deep Transformation | Building the roadmaps and cross-functional initiatives that help you leverage the best skills from across your organisation to create new levels of customer experience and operational efficiency. |
Timeframe: Performance optimization can begin 3–6 months post-launch (October 2025–January 2026).
Level 5: Self-Actualization – Innovating for the Future
Looking Ahead
At Maslow’s peak, providers innovate and prepare for future reforms, including:
| Price Caps (1 July 2026) | Adjusting systems for government-set pricing. |
| CHSP Transition (Mid-2027) | Integrating Commonwealth Home Support Programme clients. |
| Pooled Funding Trials | Exploring shared budgets for group settings. |
RAC Context: RAC providers face fewer future funding changes but must innovate within AN-ACC constraints.
Rohling’s Vision
Rohling can guide providers with:
| Strategic Planning | Preparing for price caps and CHSP integration. |
| Technology Adoption | Implementing digital tools for efficiency and care quality. |
| Grant Support | Accessing funding for IT upgrades and innovation. |
Timeframe: Innovation is a long-term goal (6–12 months post-launch, January–July 2026), but planning should start by late 2025.
Conclusion
The New Aged Care Act is a transformative opportunity, but its complexity demands a strategic approach. By framing the transition through Maslow’s hierarchy, home care providers can prioritize immediate needs while aspiring to excellence.
Rohling has helped NDIS providers navigate through a similar shift to the current home care funding transition and has helped home care and residential providers implement many stages in their reform journey.
With our team of IT and financial specialists, we can help you to navigate this journey with confidence.
To discuss how we can help you optimize your processes and adapt your financial management approach please contact us for a confidential discussion.