How upcoming aged care fee changes may affect you

From 1 November 2025, the new aged care reforms come into effect. While many new residents will face higher costs under the new rules, what does this mean for the 220,000+ people already living in residential aged care?

Here’s what you and your loved ones need to know.

Existing residents who entered care before 1 November 2025

If you started permanent residential care before 1 November 2025, you’re protected under the current rules as a “post-2014 resident.” These grandfathering provisions mean you won’t be pushed into the new fees that are likely higher. Your existing arrangements will stay in place, even if you move to a new provider, as long as you don’t opt into the new system.

This means:

• Your accommodation payments remain unchanged: lump sum RAD or RAC payments won’t be subject to retention, and daily payments (DAP) won’t be indexed.
• Your means-tested care fee has an annual cap of $35,238 and the lifetime cap is now $84,571.66 (compared to the $130,000 lifetime cap under the new rules).
• You won’t be charged the Hotelling Supplement.

However, there are two key things to keep in mind:

• You can choose to opt into the new rules.
• If you leave care for more than 28 days, you’ll automatically move to the new accommodation payment rules, meaning RAD retention will apply, and DAP will be indexed in March and September each year.

Home care approved before 24/09/2024

If you weren’t in permanent residential aged care by 24 September 2024 but had either a Home Care Package or had been approved for one, you may still benefit from partial grandfathering.

In this case, your care fees will follow the current means-tested rules, giving you access to lower costs, including the capped means-tested care fee and no Hotelling Supplement. However, your accommodation payments will fall under the new rules, meaning RAD retention and DAP indexation will apply.

Entering care from 1 November 2025 – what’s different?

If you or a loved one enters care from 1 November 2025 onwards, the new rules will apply if you aren’t grandfathered. While government support is still available for residents with lower assets, those who don’t qualify for assistance will likely pay more.

Here’s how the fees compare:

When do the maximum fees apply?

• The maximum Hotelling Supplement of $22.15/day applies once your assessed assets exceed $355,366.
• The maximum Non-Clinical Care Fee of $101.16/day applies once assessed assets exceed $1,004,112.

How we help

The upcoming aged care reforms introduce significant changes for both new residents and those already in care who may be considering a move or opting into the new system.

If you have any questions or need guidance on any aspect of the aged care finance journey, please do not hesitate to get in touch. With a specialist division of financial advisers who are accredited in aged care advice, we have a team that can talk you through the various options and explain the various financial considerations. Our team can also connect you with trusted organisations who can help guide you through the care choices that best align to your unique care situation. Learn more about our accredited aged care financial advisers.

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