Aged care reforms

The reforms create a better aged care system to give older people more choice and control and easier access to a range of aged care services.

About the aged care reforms

The reforms bring important benefits to older Australians, including:

  • more support and care at home
  • better access to residential care
  • increased recognition of carers and those from culturally diverse backgrounds
  • more support for those with dementia
  • better access to information.

The reforms began in 2012, with the first round of changes applied on 1 July 2013.

The second round of changes began on 1 July 2014. These changes included:

  • income testing arrangements for home care packages
  • means testing for residential aged care
  • new accommodation payment arrangements for residential aged care
  • removal of the distinction between high and low care in residential care, and
  • expansion of the Australian Aged Care Quality Agency.

The third round of changes, Increasing Choice in Home Care, starts on 27 February 2017. The changes include:

  • removal of home care places and the Aged Care Approvals Round (ACAR)
  • home care packages assigned directly to the care recipient
  • removal of broadbanded levels of home care, to a specific level of care
  • a new national system for prioritising access to care
  • home care package portability, allowing care recipients to change providers
  • unspent home care amounts move with the care recipient to the new provider, or are paid to the care recipient or their estate and the Commonwealth if they leave home care.

Home Care Packages Programme

Home care helps people live at home for as long as possible. The programme gives more choice and flexibility for people getting care at home.

From 27 February 2017, there are 4 levels of home care packages:

  • Home Care Level 1 - helps people with basic care needs
  • Home Care Level 2 - helps people with low level care needs, similar to the previous Community Aged Care Package
  • Home Care Level 3 - helps people with intermediate care needs
  • Home Care Level 4 - helps people with high care needs, similar to the previous Extended Aged Care at Home package.

Approval for home care packages

From 27 February 2017, Aged Care Assessment Team (ACAT) approvals for home care are determined at a specific level:

  • Home Care Level 1
  • Home Care Level 2 - allows access to both level 1 and 2 packages
  • Home Care Level 3 - allows access to level 1, 2 and 3 packages
  • Home Care Level 4 - allows access to level 1, 2, 3 and 4 packages.

Care recipients with existing approvals before 27 February 2017 will transition to the higher level of care within their broadband:

  • Level 1-2 now Level 2
  • Level 3-4 now Level 4.


Approved providers are paid supplements to help with the extra costs of certain care and service needs.

Dementia and Cognition Supplement

The Dementia and Cognition Supplement adds an extra 10% of funding on top of the basic subsidy for eligible care recipients receiving home care.

Approved providers need to apply for the Dementia and Cognition Supplement for in-home care for the care recipient using the Aged Care Application for the Dementia and Cognition Supplement in Home Care form.

Care recipients with Extended Aged Care at Home Dementia packages before 1 August 2013 automatically transition to the Home Care Level 4 package with the Dementia and Cognition Supplement.

Veterans’ Supplement

The Department of Veterans’ Affairs determines eligibility for the supplement. Payment is automatically made to approved providers. The supplement adds an extra 10% of funding on top of the basic subsidy for eligible care recipients getting a home care package.

Oxygen Supplement

The Oxygen Supplement is paid to an approved provider for a care recipient who has an ongoing medical need for oxygen. 

Enteral Feeding Supplement

This supplement is paid to approved providers for care recipients who need enteral feeding on an ongoing basis. To be eligible, the care recipient must be getting a complete food formula through a nasogastric, gastrostomy or jejunostomy tube. Enteral Feeding Supplements aren’t provided if formula is taken orally.

The supplement is available across all 4 levels of home care.

Viability Supplement

The Viability Supplement is paid to an approved aged care provider to help with the higher costs of delivering aged care services in rural and remote areas. 


For more information about aged care services and the aged care reforms, go to the My Aged Care website, or call My Aged Care on 1800 200 422.

For information sheets about aged care arrangements from 27 February 2017 go to the Department of Health website.

Page last updated: 4 March 2020