The Commonwealth Department of Health (the Department) recently issued a discussion paper  and survey seeking input from the aged care industry relating to the pending end of the Aged Care Approvals Round (ACAR) system for residential care from 1 July 2024.

The change is a significant shift in how residential aged care will be delivered in Australia and operators are encouraged to engage in the consultation process.

Department consultation on the end of ACAR

The ACAR system is to be slowly dismantled with no new allocation rounds and from 1 July 2024 residential aged care places will be allocated directly to assessed recipients.

This is reflective of the allocation that occurs in home care.  It is being redesigned to make the allocation of residential care places and the provision of residential care services more consumer driven and focused and to drive innovation and competition between providers.

The discussion paper reflects a fundamental transformational shift in the provision of aged care under ACAR from providers to consumers.  It recognises that the change will impact providers and refers to a number of programs that have been created by Government to assist providers through the transition, including programs to assist providers who decide they may wish to or may need to exit the industry.

The paper includes a number of questions for providers to discuss in their survey responses. Providers and other interested parties are encouraged to respond to the survey.

The discussion paper is open for input from providers until 14 November 2021.

If you would like assistance in responding to the survey please contact a member of the  Health, Aged Care and Retirement Villages team.

ASIC information on the accounting of aged care bed licences

Along with the discussion paper about the end of the ACAR system, the Department update also provided a link to an ASIC FAQ document. This is an FAQ on the accounting and balance sheet impact of a change in the value of allocated places held by providers in light of the pending change.  It details how providers can account for the end of the bed licences under ACAR as a result of the fact that bed licences will have no current or future value.

This guidance and the end of ACAR should be of interest to all providers who either carry a value for allocated places on their balance sheets, are looking to acquire such places or who are looking to acquire residential care services generally.

It is recognised that the zeroing of the asset value of allocated places may cause providers with large Refundable Accommodation Deposits on their balance sheet financial difficulty through impairment of those assets but recognise this may not impact the going concern aspects of the business which is related to cash flows.

If you would like further assistance to understand the end of ACAR, please contact a member of our  Health, Aged Care and Retirement Villages team.


Arthur Koumoukelis | Partner | +61 2 8248 3437 | [email protected]

Christopher Allen | Law Graduate