Background
The Support at Home program commenced on 1 November 2025, replacing the Home Care Packages program. Until recently, the message to the sector has been that all providers must have new service agreements (or variations) in place by 1 November.
However, new Transitional Rules released in the last few weeks have significantly changed this position, introducing a more flexible approach to finalising service agreements. While this has come as a huge relief to the sector, who now have more time to ensure agreements are in place, the Transitional Rules raise a number of concerns for providers around Pricing.
Key Changes Under the Transitional Rules
Under the Aged Care (Consequential and Transitional Provisions) Rules 2025, providers must now follow these revised timeframes:
- Existing Home Care Agreements remain valid during the transition period.
- Once a participant’s contribution rate is determined (and they receive a letter from Services Australia):
- Providers have 30 days to initiate finalisation or variation of the service agreement.
- Participants have 90 days to enter into the agreement.
- Providers are encouraged to finalise agreements early, especially where contribution rates are already known (e.g. full pensioners). Consumers are also able to enter into the agreement prior to receiving a letter from Services Australia. If the consumer later determines they are unhappy with the agreement, they are able to terminate.
- For clients awaiting confirmation of their contribution rate, alternative pricing arrangements may be negotiated.
- If a participant does not enter into a new agreement (or agree to a variation) within 90 days, providers may cease services in accordance with Security of Tenure provisions. An option to terminate services for a clients refusal to agree to changes is something we have never seen in this sector and is a welcomed change in this context.
Outstanding Issues and Practical Implications
Although the changes assist providers and clients to transition to the new Support at Home program, several key issues remain unresolved:
1. Can providers charge new prices before agreement is reached?
- Providers have no doubt amended their pricing schedules to remain viable in the new landscape. However the new requirement that they must not require the client to enter into the agreement until 90 days after a Services Australia letter may result in provider being unable to charge their new prices for months.
- Providers are able to attempt to gain consent to charge the new prices and should do so if they can.
2. Can providers charge participant contributions before agreement?
- This is a grey area. The Government’s messaging has created scope for participants to refuse payment. While a new security of tenure ground allows termination after 90 days of non-agreement, this may result in months of unpaid contributions.
- Further, allowing clients 90 days to enter into agreements may result in providers being unable to claim for that client within the first quarter (depending on when the client receives their Services Australia letter).
3. Can providers terminate earlier if agreement isn’t reached?
- Possibly, but high risk. Terminating on the basis that care cannot be delivered within available resources may conflict with Government messaging and could be challenged by the Commission. The introduction of a specific 90-day termination ground arguably makes early termination more difficult than before.
Next Steps for Providers
- Continue service delivery under existing agreements.
- Seek consent to new pricing and contributions where possible.
- Monitor contribution rate notifications and initiate agreement finalisation promptly.
- Document all communications with participants regarding pricing and contributions.
- Watch for further updates – advocacy groups such as Ageing Australia are actively engaging with Government on these issues.
How can we help?
Please reach out if you need any assistance to Anita Courtney (acourtney@rk.com.au), Solomon Miller (smiller@rk.com.au), Johanna Heaven (jheaven@rk.com.au) or a member from Russell Kennedy's Aged Care Team.
If you would like to keep up to date with Alerts, News and Insights you can subscribe to our aged care mailing list here.
Disclaimer
The information contained in this Alert is intended as general commentary only and should not be regarded as legal advice. Should you require specific advice on the topics discussed, please contact the firm directly.