5 Key Things to Know About the New Aged Care Fees
Big changes are coming to aged care from 1 November 2025.
These reforms aim to create a fairer and more sustainable system, but they also add complexity—particularly around understanding fees and making the right financial decisions.
Here are the five key things you should know:
1. Aged Care Will Cost More – But Remains Subsidised
If you or a loved one moves into residential aged care from 1 November 2025, the personal contribution required will be higher.
The government will still fund a large share of care costs—around 73% on average—but it’s essential to plan for the increased out-of-pocket expenses and assess your cash flow.
2. New Terminology and Fee Calculations
The familiar “means-tested care fee” is being replaced with terms like Hotelling Contribution and Non-Clinical Care Contribution.
While fees will still be based on your income and assets, the new formulas may result in higher contributions than under the current rules.
3. Lifetime Caps Continue—at a Higher Level
A lifetime cap will still limit the total non-clinical care contributions you can be asked to pay.
This cap will rise to $130,000, but you will only pay this fee for a maximum of four years, ensuring fairness between residents with different levels of wealth.
4. Retention Amounts Reintroduced
If you choose to pay a lump sum for your room—known as a Refundable Accommodation Deposit (RAD)—aged care providers can deduct a “retention amount” of up to 2% per year, capped at 10% over five years.
While this slightly increases the cost, it may still represent better value than a daily accommodation payment.
5. Professional Advice Is More Important Than Ever
Navigating these new rules can be confusing, particularly when making significant decisions about the family home, investments, or pension entitlements.
The cost of obtaining expert guidance is often far less than the cost of mistakes. Working with a qualified financial advisor can help you protect your wealth and make informed choices.
Start Planning Now
If you’re considering aged care for yourself or a family member, the best time to prepare is now.
Strategem Financial Services specialises in aged care advice and can help you:
✔ Understand the new fee structure
✔ Plan funding strategies
✔ Protect assets and entitlements
Contact Strategem Financial Services today to book an appointment with one of our experienced advisors.
📞 Phone: (03) 5445 4777
📧 Email: info@strategem.com.au
🌐 Website: strategem.com.au
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If you need further advice, please do not hesitate to contact our office on (03) 5445 4777 and one of our Accountants & Advisors are available to support you.
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