Exciting changes to aged care are set to commence on 1 November, introducing reforms designed to enhance the quality, transparency, and flexibility of care while giving you greater choice, control, and confidence in planning your care.
With more care levels, clearer pricing, and greater control over how your funding is used, the new system aims to better match services to individual needs. Providers will be required to offer detailed cost breakdowns, empowering you to make informed decisions about your care.
While the reforms are a step forward in improving care quality, they also introduce changes in how services are funded, which may result in higher out-of-pocket costs for individuals.
What you pay depends on your financial situation – whether you receive a full or part pension or are self-funded – and the services you access.
As the aged care landscape evolves, staying informed is key to making informed and confident choices. Whether you’re planning for yourself or supporting a loved one, understanding the new system will help you access the right care at the right time.
Help at home
From 1 November, the current Home Care Packages will be replaced by a new program called Support at Home.
The key changes include:
- Eight levels of care (up from four) to better match individual needs
- Extra funding for assistive technology, home modifications and palliative care.
Services are expected to remain the same, but the way you pay for them may change.
- For example, clinical care (such as nursing or physiotherapy) will be fully funded by the Government.
- You may pay more for everyday living services (such as meal preparation or cleaning) than you do for independence supports (like personal care or transport).
- The out-of-pocket costs for everyday living will range from 17.5% for full pensioners to 80% for self-funded retirees.
- Non-clinical support, like showering, will cost 5% for full pensioners to 50% for self-funded retirees.
If you were approved for a Home Care Package on or before 12 September 2024, you benefit from fee concessions designed to ensure you continue to receive value under the new rules.
The package level you are assigned sets the total funding available to pay for care, with 10% allocated to the care provider to cover the cost of care management.
You then work with your provider to determine how you would like to allocate the remaining budget. The provider will set their fees for services, and you will contribute based on your income.
Residential aged care
Room prices in aged care facilities have been steadily rising following an increase in the Refundable Accommodation Deposit (RAD) threshold from $550,000 to $750,000.
Higher RADs mean you may need to use more of your savings or income to cover aged care costs.
From 1 November 2025, anyone who moves into care after this date and pays a RAD, will have 2% of that amount deducted each year, for up to five years.
You can still opt to pay a Daily Accommodation Payment (DAP), but this will increase every six months in line with inflation.
Other fees include:
- • the basic daily fee (set at 85% of the single age pension)
- a means-tested fee or non-clinical care contribution
- potentially a higher everyday living fee (previously known as extra or additional services)
Fee caps and planning ahead
The lifetime cap on aged care contributions remains in place. You won’t pay more than $130,000 (indexed) over your lifetime towards home care and residential care combined.
Understanding how the changes affect your financial future is vital. You’ll need to consider:
- whether someone will remain in the family home
- your current income and assets
- potential age pension entitlements
- estate planning strategies
Use the government’s fee estimator at MyAgedCare to get a clearer picture of your potential costs.
Next steps
Navigating aged care can be complex, and upcoming changes add new considerations. We help you understand your options, structure your assets, minimise fees and plan for your future care needs.
Speak with your local Nexia Adviser today so you can make informed, confident decisions with expert guidance every step of the way.
