Improved Payment Arrangements budget measure

The Australian Government has passed Bill 1 of the Aged Care Legislation Amendment. Bill 2 is expected to be scheduled for debate in Autumn 2021.

Date published:
Subscriber announcement
Health sector

On 10 December 2020, the Government passed Bill 1 Aged Care Legislation Amendment (Improved Home Care Payment Administration No. 1) Bill 2020.

Bill 1 will support the commencement of Phase 1 of the Improved Payment Arrangements measure announced by the Government in the 2019-20 Budget. Instead of receiving a full subsidy payment against each Care Recipient at the beginning of each month, Bill 1 requires Home Care Package providers to be paid monthly in arrears. This measure will reduce the prudential risk in home care over time and improve protections for care recipients’ Home Care Package funds.

Further information about the Improved Payment Arrangements changes is below:

Phase 1 (Bill 1)

  • Providers will receive their January 2021 advance in December 2020 as per normal. There will be no February advance.
  • From 1 February 2021, providers will be funded in arrears rather than in advance.
  • Payments for February 2021 will be claimed in March 2021, for the full subsidy, based on the number of care recipients in care during February 2021.

Phase 2 (Bill 2)

On 9 December 2020, Bill 2 Aged Care Legislation Amendment (Improved Home Care Payment Administration No. 2) Bill 2020 was debated in the House of Representatives. As this was the last sitting day in 2020, Bill 2 is expected to be scheduled for the autumn 2021 sitting.

  • Dependant on Bill 2 passing, Phase 2 will commence from 1 September 2021.
  • Providers will be paid in arrears, based on actual care and services delivered.
  • From 1 September 2021 onwards the Government will collect and hold the Commonwealth portion of unspent funds, in each care recipient’s home care account, until needed.

Further details will be provided about how Phase 2 will operate as soon as they are available.

For further information please visit the department's website.

Transition funding for targeted providers

The Government will provide limited transition funding through a closed and targeted grant round, to open in the coming weeks. The purpose of the grant is to ensure continuation of services for clients in particularly thin markets – it is not intended to replace the February subsidy payment.

Home Care Providers that are eligible for funding will be notified by the department upon the opening of the round.

For further information please contact