The ‘No Worse Off’ Principle in Aged Care Explained
On 12 September 2024, the Australian Government introduced the new Aged Care Act, the primary law governing how the aged care system operates. While this law is important, it has also created a lot of uncertainty, especially for people already receiving care.
Concerns about rising costs, reduced funding for providers and the potential impact on service hours are all valid, particularly during periods of reform. However, the aged care ‘no worse off’ principle protects certain people already in the system from being financially disadvantaged by upcoming reforms.
In simple terms, if you were receiving a Home Care Package, on a waiting list or assessed as eligible on or before 12 September 2024, the changes should not leave you paying more or receiving less support than you would have under the previous system.
It acts as a safeguard during the transition to new aged care funding arrangements, helping ensure continuity of care and cost stability for those already on a package. The following article explains the ‘no worse off’ principle in more detail. We’ve also put together clear, easy-to-follow information to help you understand aged care here.
Who the Principle Applies To:
While the ‘no worse off’ principle for aged care offers reassurance, it only applies to a specific group. There are three broad groups to understand:
- The first is the grandfathered group, who are fully protected under the principle. This includes people who were already receiving a Home Care Package (HCP) or had been assessed as eligible for care on or before 12 September 2024. If you fall into this category, the existing rules continue to apply.
2. The second group is post-cutoff applicants, meaning those assessed between 13 September 2024 and 31 October 2025.
3. The third group is new entrants, assessed from 1 November 2025 onwards.
The second and third groups are not covered by the ‘no worse off’ protections and will pay standard rates under the new system.
If you’re not sure which category you fall into, it’s worth confirming early, as it directly affects how the new rules apply to you, what you’ll pay and what support you’ll receive. Learn more about the new priority system and funding allocation here.
What the Principle Actually Protects
For people who are grandfathered into the system, the aged care ‘no worse off’ principle is about maintaining continuity across a few key areas. While changes may occur, it does not mean you should not be financially disadvantaged compared to your current HCP arrangements.
One of the main protections relates to contribution fees. If you’re currently paying $0 in income-tested care fees under your HCP, you will not suddenly be required to start paying contributions under the new Support at Home program. If you are already contributing, your costs should remain the same or decrease following the transition.
There is also protection around your funding level. Your existing HCP level (1–4) will be converted into a ‘transitioned HCP’ budget when you move into the new system. While there may be a reassessment over time to reflect your current needs, the transition itself is designed so that you are not moved to a lower level of support without appropriate review. This helps ensure continuity in the services you rely on day to day.
Your unspent HCP funds will also carry over into the new program. These funds can continue to be used for approved care and services, giving you flexibility to access support when you need it. However, it’s important to understand that Support at Home introduces quarterly budgets, which work differently from the current system. This may change how funds are allocated and used over time, even though your existing balance is preserved.
Finally, while funding structures are changing, grandfathered participants generally retain the more favourable aspects of their current HCP arrangements. This is because the principle is designed to protect your existing position, not replace it with a less beneficial one.
What the Principle Does not Protect
This is where things can feel confusing. While you may be protected in some areas, other parts of the system can still change.
Understand how pricing may change over time
The ‘no worse off’ principle for aged care does not protect participants from all changes under Support at Home. In particular, it does not freeze the prices charged by aged care providers. Providers currently set their own prices for services, and while prices must be reasonable, transparent and agreed upon with participants, government price caps do not begin until 1 July 2026. After that date, providers can still set their prices, but they cannot charge above the government cap.
Plan for how far your budget will go
This means a grandfathered participant may keep the same or lower contribution arrangements, but the number of service hours you receive could still change, even if your contributions stay the same. For example, if the cost of cleaning, personal care or nursing rises, the same quarterly budget may not stretch as far. This can also affect rostering and staffing, as providers may need to adjust visit lengths, worker availability or service schedules to stay within a participant’s budget.
Know which services are included (and which are not)
The principle also does not guarantee access to every service someone may want. Support at Home has a defined service list, so some supports may be excluded or limited. This may include certain home modifications, services that are not directly related to assessed aged care needs or therapies considered outside the program’s scope, such as some natural or alternative therapies.
Make the most of your quarterly funding
Another key change is the move to quarterly funding. Under Support at Home, budgets are allocated every three months, and participants can generally carry over unspent funds up to $1,000 or 10% of their quarterly budget, whichever is greater. This is different from unspent HCP funds, which transitioned participants can keep and use for approved services, assistive technology and home modifications.
Be clear on what the ‘no worse off’ principle applies to
The ‘no worse off’ principle also does not apply to Commonwealth Home Support Programme (CHSP) recipients. CHSP continues to operate separately and is expected to transition to Support at Home no earlier than 1 July 2027.
For assistance in understanding how these changes may affect your budget, it may be useful to read more about financing aged care from TriCare.
Make the Transition to Residential Aged Care Less Complex. Talk to TriCare Today
TriCare offers Residential Aged Care. And moving into residential aged care often comes with a lot of uncertainty, especially when it comes to understanding costs, care options and what daily life will look like. Our TriCare team can help you make sense of it all, from explaining fees in plain language to outlining what level of care is most appropriate for your situation.
If you’re planning or making a more immediate decision, speaking with an experienced team member can give you clarity and confidence in your next steps. Get in touch to discuss your options and receive guidance tailored to you or your family member’s needs.
