The government has announced providers will continue to set their own prices for the first year of incoming home care program as they do under the current system.
From 1 July 2026, government set price caps will apply for the Support at Home program – 12 months after it replaces the Home Care Package and other programs on 1 July 2025.
The Independent Health and Aged Care Pricing Authority held a public consultation in October seeking feedback on the service list pricing for Support at Home, and was due to provide its first pricing advice on the program to government in March 2025.
The government said in Thursday’s announcement the pricing cap delay was to support service continuity for providers and participants, and that it would be backed by extra consumer protections.
It has been welcomed by providers, and comes in response to their ongoing advocacy about funding, transition and implementation concerns for the new home and community care programs, said Aged & Community Care Providers Association chief executive officer Tom Symondson.
The previously announced pooled approach to care management, based on 10 per cent of ongoing Support at Home classification funding, will still start from 1 July 2025.
A phased approach gives providers time to adjust, but it comes with administrative and other burdens, said Lorraine Poulos and Associates general manager Marisa Galiazzo.
“The staged introduction of price caps in the Support at Home program provides providers with a transition period to adapt, retaining pricing flexibility while implementing the pooled care management model,” Ms Galiazzo told Community Care Review.
“However, the impending government-set price caps from July 2026 may challenge providers to absorb or reduce administrative costs to remain sustainable, particularly given the additional burden of renegotiating service agreements and aligning with new consumer protections.
“Balancing transparency and affordability with the reality of rising operational and compliance costs will be a critical challenge for many providers.”
Mr Symondson also said the staged approach gave providers flexibility plus the time needed to transition.
“The initial flexibility allows providers to establish realistic prices that account for overheads, administrative costs, and quality care management.
“It also takes away two of the major transition concerns our members have been raising, that prices may be announced so late as to be impossible to implement, and that they may be unrealistic, causing providers to fall over when older people need them most,” he said.
“We remain committed to working closely with all stakeholders to ensure a smooth transition and drive the best outcomes for providers and most importantly older Australians.”
The government will begin a survey of prospective provider prices in the new year.
Also from January 2025, the government will consult with sector, older people and consumer advocates on the development of additional consumer protections to ensure pricing is fair during the transition year.
This will be in addition to existing Consumer Confidence Protections including:
- no entry, exit or other hidden fees
- no worse off principle
- capped co-contributions
- agreed price changes
- a strong financial safety net for people who cannot afford co-contributions.
Welcoming the announcement, the CEO of large aged care provider Bolton Clarke, Stephen Muggleton, called the staged approach a positive step for consumers and providers.
“This is a sensible move that will protect consumers from the risk of service disruption and abrupt changes in pricing,” Mr Muggleton said.
“Consultation in the new year on additional consumer protections during the transition will help guard against any risk of price gouging.
“There are many providers at different price points to choose from in most areas. This choice and competition will continue to be the strongest source of consumer protection.”
The government will share further information on pricing with stakeholders in March.
It said providers should begin discussions with home care recipients around service agreements for Support at Home including pricing from April 2025, with recipients needing to agree to any pricing changes ahead of the program’s 1 July 2025 start.
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