Aged care residents who move out of their facility during a crisis won't be financially penalised

The emergency leave mechanism will be activated in volatile situations including natural disasters or health epidemics.

Eligibility for emergency leave will be backdated to April 1 this year, so people impacted by the current COVID-19 crisis are not disadvantaged.

Under current legislation, permanent residents are entitled to be away from their aged care residence for up to 52 days a year for non-hospital related reasons - known as social leave.

If a resident takes more than 52 days social leave, the Government does not provide its subsidy to the aged care home for that person for the extra days.

This cost is usually passed on to the resident.

Minister for Aged Care and Senior Australians, Richard Colbeck, said the recent bushfires and the virus pandemic had highlighted the need to protect leave entitlements of aged care residents.

"During the COVID-19 pandemic, some aged care residents have temporarily relocated to live with family, to reduce their risk of exposure to the virus," Mr Colbeck said.

"Most of these residents are likely to exhaust their 52 days before the pandemic passes, leading to extra costs on them or their families.

"The Government recognises that this isn't fair or desirable. We have amended the Aged Care Act to give aged care residents the option of taking additional leave during an emergency."

Mr Colbeck said the Government will continue to provide the residential care subsidy for residents on emergency leave, so neither residents nor providers are financially disadvantaged.

Emergency leave will also be available for a specific region which is in crisis, for example from an isolated outbreak of COVID-19 or major bushfires.

"This initiative will allow permanent aged care residents and their families to make their own decisions about personal safety in emergency situations, without suffering financially as a result," Mr Colbeck said.

"It also means that after an emergency, residents can use their social leave entitlement for normal visiting and special events with their families and friends, which are so important for emotional and mental health."

Read more: Aged Care visitation code strikes balance says Minister

Read more: Bupa fined $6 million for false aged care claims