A year of major change: Allied health in the new aged care system

2025 marked a pivotal year for allied health peak bodies engaged in aged care policy, and for the professionals delivering essential services to older Australians.

Following the passing of the new Aged Care Act in late 2024, reform activity accelerated throughout 2025 as the government developed the accompanying Aged Care Rules and prepared for the rollout of Support at Home. Although originally slated for July, the legislation commenced on 1 November, with implementation of the reforms moving at a rapid and often challenging pace.

Implementing the changes

The November commencement brought significant challenges across the aged care sector, but the impact on allied health has been particularly acute. Many allied health professionals – often operating as small businesses or sole traders – have been hit particularly hard. AHPA members report being overwhelmed by requests for support from clinicians who are confused, overwhelmed or unable to obtain reliable information. Some professionals have already left the sector, and more may follow without stronger, targeted support.

Key issues still to be addressed

While AHPA secured some positive changes to the legislation and regulatory system, substantial concerns remain regarding how allied health is defined, funded and supported under the new system.

Definition and funding of allied health

The Aged Care Rules still lack an adequate definition of allied health that reflects the full range of allied health services older people require. Professions such as orthoptics and prosthetics/orthotics are excluded from the Support at Home service list unless directly linked to the provision of assistive technology from the approved – and limited – list of products. This means older people needing devices such as knee-ankle-foot orthoses will be worse off under the new system.,

Other professions – including osteopathy, chiropractic and art therapy – are included in the Support at Home service list, but are not recognised as clinical supports. Instead, they are listed under ‘Therapeutic supports for independent living’ rather than ‘Allied health and therapy’. As a result, older people – often living on low incomes – are required to contribute up to 17.5% of costs. This contradicts government claims that clinical care is fully funded.

Funding limits

Support at Home reflects a rationed care model rather than the needs-based approach recommended by the Royal Commission into Aged Care Quality and Safety and successive Inspectors-General of Aged Care. Government funding is capped at the individual’s allocated budget; if a person’s needs exceed that budget, they must wait for reassessment to a higher tier or pay out of pocket. Compounding this, there are still no nationally consistent processes for assessing allied health needs in either home or residential care.

Costs under the Support at Home model are also rising, and budgets include consumer co-contributions – not just government funding.

Residential care presents even greater challenges. Clinical care is funded according to section 8-155 of the new Aged Care Rules, but this appears to leave various questions with respect to allied health. The Royal Commission emphasised that allied health is critical to reablement – a core objective of the new Act – yet allied health provision in residential aged care has now fallen to around half of what the Commission already deemed grossly inadequate in 2021.

AHPA is aware that in practice, residents are frequently unable to access allied health services beyond physiotherapy and basic podiatry.

AHPA is still seeking to ascertain exactly what providers are obligated to provide and pay for using AN-ACC funding and how much consumers pay out of pocket. Establishing transparent reporting on how these Items are being applied would be a fundamental step toward assessing whether the reforms are delivering genuinely affordable allied health services for older people.

Assistive technology and home modifications

AHPA remains deeply concerned about aspects relating to provision of assistive technology and home modifications under the new Support at Home program, particularly the proposed $15,000 lifetime cap and associated funding tiers being proposed for the Home Modifications scheme. Alongside many aged care stakeholders, we regard this lifetime cap as inadequate, failing to reflect the financial position of many older Australians. It is likely to restrict access to major modifications compared with the former Home Care Packages program and risks significant unintended consequences, most notably undermining Government policy to support older people to age in place rather than having to move into residential aged care.

Pricing Support at Home

The new aged care system prices Support at Home services by billable time units. While stakeholders secured recognition that costs beyond face-to-face care – such as travel and indirect time – must be included, these are now bundled into a single hourly rate. Current prices are only ‘indicative’, with the Aged Care Commission adjudicating complaints of unreasonableness, but from 2026 Government will impose price caps based on advice from the Independent Hospital and Aged Care Pricing Authority.‑to‑face care

If essential activities such as report writing are not properly costed, many allied health providers may struggle to remain viable. This risks reducing service availability and driving smaller providers out of the aged care sector, leaving older people with fewer choices and a system dominated by large, profit focused organisations.

Regulatory system

Future streamlining of regulatory processes must apply to both Ahpra-regulated and self-regulating allied health professions. AHPA and its members have consistently worked to strengthen the Aged Care Quality Standards, and are seeking clear application of the reformed Standards to ensure allied health service provision is supported to help achieve the new legislative goals of reablement and wellbeing.

Ongoing engagement

AHPA remains committed to ensuring allied health services for older people are comprehensive, accessible and of high quality, and that they meet each person’s clinically identified needs. AHPA continues to engage with government and sector partners to advocate for a system that recognises the essential role of allied health in achieving the goals of the new Aged Care Act.