New rules under the Aged Care Act will now require some care recipients to pay more for support services in a bid to put the industry on a more even keel and improve the quality of care on offer.
While clinical support such as nursing and physiotherapy will still be fully subsidised, services including showering will now have a fee associated with them.
The overhaul will be grandfathered, meaning older Australians already in care will not be worse off.
The changes also include updated rights for older Australians around independence, privacy, safety and quality.
Home care provider Dovida, which supports more than 14,000 seniors, welcomed the long-awaited reforms but expressed concern the sector might not be ready for the proposed changes.
Chief Operating Officer Greg Bartley is particularly worried about the federal government's commitment to reduce wait times to just three months by July 2027, a promise made during the introduction of the bill to parliament in 2024.
"We have to be realistic about what it will take to get there. Right now, the system is already stretched thin, and we think the government has not made the systemic changes needed to meet their own target," he said.
"Without urgent focus on infrastructure, workforce, and assessment capacity, the three-month target could quickly become another missed milestone for older Australians waiting to stay safely in their homes."
Mr Bartley said the government's ambition was supported, although it needed to be matched with action.
"The sector stands ready to help achieve the target, but we need the systems, people, and support to make it possible."
The laws cover residential aged care and home care, and stem from the final report of the Royal Commission into Aged Care Quality and Safety, which was handed down in 2021.
More tiers of home care will be introduced to ensure people's packages are better matched to the support they need.
Older Persons Advocacy Network chief executive Craig Gear told AAP he would be watching providers.
He warned companies were changing their pricing for home care in response to the reforms, which could leave some people trying to enter care worse off.
"People coming in on a current package may have less purchasing power," he said.
Mr Gear said while some people were pleased their rights were enshrined in legislation, there was also a period of uncertainty ahead.
"Some people are feeling confused about what this means," he said.
The Greens voted against the bill when it passed through parliament in 2024, voicing concern over the financialisation of care.
"Our parents and grandparents deserve to be looked after in their old age, not forced to choose between a shower each day and a meal," Senator Penny Allman-Payne says.
"Aged care should not be for profit."
Council on the Ageing chief executive Patricia Sparrow said some of the details would become clearer in coming days as the changes worked their way through the system.
"The changes are large, and people are trying to take them in," she told AAP.
Aged Care Minister Sam Rae said the changes marked a shift for older Australians.
"With these reforms, we are no longer just patching a broken system," he said in a statement.
"We are fulfilling a promise to deliver dignity, choice and respect to every person who has spent their life contributing to their community and our country."
The aged care sector will come under increasing pressure in coming years as large numbers of baby boomers begin requiring more support, and questions remain about the capacity of the industry's workforce to deliver the required care.
