Australia’s aged care reforms take effect in November. Here’s what you need to know

Changes to Australia’s aged care system will begin from November, in a move the federal government says will provide a more financially sustainable industry for the decades to come – but that advocates have warned will increase the cost of basic care. The overhaul will affect how new aged care residents are funded and how much they will have to pay for care in their later years. Here’s what’s changing. Support at Home replaces home care packages One of the biggest changes beginning in November is the way in which elderly people can receive care at home. The Support at Home program will replace the home care system and is designed to make it easier for people to receive care without going to an aged care facility. The main change is that people will only pay for services they receive. They will also no longer have to pay the basic daily fee, which is $65.55, or 85% of the single basic age pension, but other services which are now included will cost extra. For the highest care and support package, a person will receive a quarterly budget of $15,860. Service fees can then be deducted from this amount. Providers are capped at charging 10% of the budget for administration and management costs. For the lowest tier of home care support, a person can receive a quarterly budget of about $2,750. Sign up: AU Breaking News email Clinical support services, such as nursing and physiotherapy, will be fully covered for everyone with a home care package. Other services, however, will be means tested. Contributions – or co-payments – will need to be paid for personal care, assistive technology and home modifications. Pensioners, part-pensioners and self-funded retirees will need to pay between 5% and 50% of a service provider’s fee for “personal care”, which could include showering. It’s expected everyday living services, such as domestic assistance and gardening, will attract a higher fee. The home packages are capped for the moment, leading to a long waiting list. The government offered 20,000 places in October with an additional 63,000 places expected to be available by mid-2026. Nearly 122,000 people were on the waiting list at the end of September with modelling suggesting more than 300,000 could be waiting for access by June 2030. Changes to refundable accommodation deposits Aged care accommodation providers will now be able to keep a portion of refundable deposits from 1 November 2025. Providers will now be entitled to 2% of a refundable accommodation deposit for each year up to five years, totalling 10%. Providers can also continue to draw daily care fees from the lump sum. For example, if a person wishes to pay the lump sum deposit for a room at the cost of $400,000, the provider will be entitled to 2% ($8,000) retention payment for each year they remain in accommodation for five years. The remaining deposit, minus any other fees, is refunded when the person leaves care or dies. The deposit cap – which is now annually indexed to inflation – increased from $550,000 to $750,000 at the beginning of 2025, meaning the maximum an aged care provider can pocket at this time from a refundable deposit now stands at about $75,000. Aged care residents can continue to choose between lump sum deposits, a daily payment or a combination of both to pay for aged care accommodation. New means-tested fee structure While means testing isn’t new for aged care residents, more fees will be means tested from November. A daily hotelling supplement, previously paid for by the government, will now be checked against a resident’s financial means. The fee is in addition to the daily care fee, and will cover everyday living services, including catering, cleaning and laundry. The hotelling fee is set at a maximum of $22.15 a day from 1 November. Residents may also be required to pay for non-clinical care, depending on the outcome of their income and assets assessment. Nonclinical care includes services and items such as, bathing, mobility assistance and lifestyle activities. The maximum fee is set at $105.30 a day. Payment of non-clinical care for aged residents stops after four years, after which point the government covers the contribution. Optional higher service fees From November, aged care residents will be able to opt in to “higher services” for a fee. The higher everyday living fee will give residents the option to pay more for higher standards of everyday living services at a cost proposed by providers. The options could include, for example, newspaper subscriptions, access to streaming services or weekly deliveries of wine. The higher services option can be provided to residents as a bundle, however, residents cannot be worse off if they separately paid for each service. The fee will replace the existing additional and extra service fee options.