Aged care advice

The rules changed on 1 November 2025

This matters more than any other point on this page, because most of the advice circulating — and a good deal of what families are told informally — describes the old system.

From 1 November 2025 there are new fee arrangements for residential care, and the Support at Home program replaced Home Care Packages and Short-Term Restorative Care.

Which set applies to you is decided by a specific test, not by when you move in. Under the no worse off principle, someone who was receiving a Home Care Package — or had been approved for one and was waiting — on or before 12 September 2024 stays on the 1 July 2014 fee arrangements, and keeps that protection even if they enter residential care years later. Everyone else entering from 1 November 2025 is on the new arrangements.

So two residents in the same home, admitted the same week, can genuinely be paying under different rules. A protected resident can choose to move to the 1 November 2025 arrangements, but not back again. Establishing which set applies is the first thing to do, and it is the thing most often assumed rather than checked — the Department's fee and accommodation arrangements guidance sets out the test.

What a residential place costs now

For someone entering under the current arrangements, the costs are:

• The basic daily fee, which everyone pays.
• Accommodation, paid as a refundable deposit, a daily payment, or a combination.
• A hotelling contribution towards everyday living costs — meals, cleaning, laundry — payable by those with means above the thresholds.
• A non-clinical care contribution towards personal care such as bathing and mobility support, also means tested, and subject to both a lifetime cap and a four-year limit, whichever comes first.
• A higher everyday living fee, if you choose a home offering services above the standard and agree to pay for them. This replaced the extra service and additional service fees, which cannot be newly entered into from 1 November 2025 — see the Department's guidance on optional fees.

Clinical care remains government funded. The current thresholds and caps are published by My Aged Care and the Department of Health's means tested fees guidance; they are indexed, so the figure quoted to you should always be checked against the current published rate rather than a number from a brochure.

The lump sum, or the daily payment

Accommodation can be paid as a refundable accommodation deposit, as a daily payment, or as a combination of both. The daily payment is derived from the lump sum using a government-set interest rate, so this is a financial decision rather than a matter of preference.

It is also not neutral, and this is where the most valuable modelling sits. A refundable deposit and the money you would otherwise have kept are treated differently, and the difference can run to a substantial sum over a few years.

Two different means tests, and they are not the same

This is the point most often got wrong, including in otherwise careful advice.

The aged care means assessment decides your hotelling and non-clinical care contributions. The Age Pension income and assets tests decide your pension. They use overlapping but different rules, and a refundable accommodation deposit is treated differently by each — it is not simply "an asset" for both purposes.

The practical consequence is that a change made to reduce a care contribution can cost more in pension than it saves. That interaction is why this is worth modelling rather than reasoning about, and why a rule of thumb is unreliable here.

The family home

The hardest decision, and the one with the largest consequences. Kept, the home is treated one way for a period and differently afterwards. Rented, the rental income is assessed. Sold, the proceeds are assessable and the position changes again — and the sale cannot be undone.

There is no general right answer, and the emotional weight of it is real. What we can do is set out what each path costs over the next few years so a family is choosing with the figures in front of them.

Support at Home, before residential care

Most people would rather stay at home for as long as they can. Support at Home has more funding levels than the packages it replaced and its own contribution rules, which differ by the type of service. Contributions made under it also count towards the same lifetime cap as residential non-clinical care.

Understanding both at once matters, because the choice between them is usually made once and lived with for years.

Doing this under time pressure

Families normally arrive with a placement offer and a deadline. That is workable — the main options can be modelled quickly. The outcome is simply better when the conversation starts while a parent is still managing at home, which is the moment it is easiest to postpone.