Aged Care at a Crossroads: Evaluating the July 2025 Reforms and Their Strategic Implications
Australia’s aged care sector stands on the brink of a legislative transformation. The incoming Aged Care Act, due to come into effect on 1 July 2025, is more than just a structural policy change—it’s a shift in how we define dignity, autonomy, and accountability in later life. While the vision for a more person-centred, transparent and equitable care system is welcome, the path to realising that vision presents both significant opportunities and very real risks.
This article explores the strategic and operational implications of the new legislation for care providers, older Australians, and the broader health and community ecosystem.
What Is Changing? An Overview of the July 2025 Reforms
The 2025 reforms reflect the Australian Government’s response to the Royal Commission into Aged Care Quality and Safety. At the heart of the reforms is a commitment to embedding the rights of older Australians in law and delivering a system built on transparency, accountability and responsiveness.
Key policy changes include:
– Support at Home Program: A major structural shift that will consolidate the Home Care Packages (HCP) and Commonwealth Home Support Programme (CHSP) into a unified, tiered system designed to simplify access and support independence.
– Means-Tested Contributions: Financial contributions from care recipients will be more closely aligned to individual financial capacity, with implications for middle-income households navigating rising living costs.
– A Strengthened Regulatory Framework: The reforms introduce higher standards of compliance, real-time quality monitoring, mandatory reporting, and a stronger role for the Aged Care Quality and Safety Commission.
The Federal Budget: Financial Support, But Not the Full Picture
The 2025–26 Federal Budget outlined an investment of $2.9 billion to support aged care—primarily through:
– $2.6 billion for wage increases for aged care nurses and personal care workers
– $291 million over five years to implement the Aged Care Act, including support for the Single Assessment System and upgrades to the regulatory framework
While these measures are essential, the funding does not fully account for the technology, infrastructure, and transition costs that providers—particularly smaller and regional ones—will face in implementing new care models.
Wins: A System Centred on Rights and Outcomes
There is broad consensus that the principles underpinning the reforms represent a shift in the right direction:
– Consumer Empowerment: Older Australians will have greater autonomy in directing their own care, with care plans tailored to their needs and preferences.
– Consistency and Simplicity: A streamlined Support at Home system reduces duplication and removes many of the structural inefficiencies that have hampered care coordination.
– Improved Workforce Conditions: The budget-backed wage rises, alongside workforce standards enshrined in the Act, aim to elevate the profile and stability of aged care employment.
Concerns: Systemic Stress and Readiness
However, optimism is tempered by the scale and speed of implementation. Industry leaders have raised critical concerns:
– System Readiness: Many providers have not yet received the operational guidance or digital tools required to make the transition effectively.
– Affordability for Consumers: The means-testing model may inadvertently create affordability issues for those with modest assets but limited cash flow.
– Change Fatigue and Workforce Gaps: Continuous reform cycles, regulatory pressure, and workforce shortages are compounding frontline fatigue at a time when stability is most needed.
Strategic Implications: What This Means for Providers
For providers, the reforms necessitate a paradigm shift in operational strategy:
– Digital Transformation: Compliance under the new Act will require robust data systems, digital care platforms, and reporting capabilities. Many small and mid-tier providers are under-resourced in this area.
– Governance and Risk Readiness: Organisations must move beyond basic accreditation to embed proactive quality systems, risk frameworks, and governance models that can withstand ongoing scrutiny.
– Redesigning Service Models: Flexibility and cultural responsiveness will be key. Care plans must be co-designed, localised, and able to adapt in real-time to changing consumer needs.
A Note on Small Providers
For small and community-based providers, these reforms present a double-edged sword. On one hand, the emphasis on personalised, community-based care aligns with their strengths. On the other, limited access to capital, digital infrastructure, and compliance capacity may jeopardise their sustainability. Without targeted support, grants, or phased rollouts, the sector risks losing providers that deliver some of the most trusted and culturally attuned services—particularly in rural and multicultural communities.
The OSAN Perspective: Leading Through Preparedness
At OSAN Ability, we are proactively aligning our systems, workforce, and care philosophy with the reforms. We’ve invested in integrated digital platforms, multilingual care teams, and governance frameworks that anticipate what’s next. For us, these reforms aren’t a challenge—they’re an opportunity to reaffirm our values and lead with clarity, capability, and compassion.
Conclusion: Policy is the Start—Execution is Everything
The 2025 reforms lay the groundwork for a stronger, more responsive aged care system—but their success depends on how effectively the sector delivers on the promise. Providers must move from compliance to commitment; from transactional models to human-centred ones.
As we approach July 2025, we must remember that true reform is not about policy—it’s about practice. The future of aged care lies not just in systems and standards, but in the everyday decisions we make to honour the lives of those we serve.
