Major changes to Aged Care in 2025
Late last year, new legislation passed Parliament which incorporated major changes to both Home Care and Residential Care, including fees and charges.
Most proposed reforms commence 1 July 2025. Grandfathering applies to existing Residential Aged Care residents and Home Care participants.
Key Reforms
Residential Aged care – Accommodation Reform
- RAD retention amount – aged care providers will retain 2% p.a. (up to a maximum 5 years) of a resident’s lump sum accommodation payment (RAD or RAC) where they enter care on or after 1 July 2025
- Indexation of Daily Accommodation Payments (DAPs) – DAPs will be indexed twice per year for residents entering care on or after 1 July 2025
- Maximum accommodation price increases – amount that can be charged without Government approval increases from $550,000 to $750,000 from 1 January 2025 (note, this change has already been enacted by separate legislation)
Residential Aged Care – Ongoing Fees |
· Hotelling Contribution – new means tested fee of up to $12.55 per day will be payable by residents where they enter care on or after 1 July 2025 · Non-Clinical Care Contribution (NCCC) – the current means tested care fee will be replaced by a new means-tested NCCC of up to $101.16 per day where they enter care on or after 1 July 2025. A lifetime cap of $130,000 (or maximum of 4 years) applies |
Home Care · New classification system – 8 ongoing classifications for ongoing care replace the current 4 levels of Home Care packages – 2 short-term classifications for restorative care and end-of-life care. · New fee structure – clients will pay a set percentage of the cost of each service they receive. The set percentage is determined by the type of service (clinical, independence or everyday living) and the person’s age pension status (means testing) |
Matthew Kelly CFP®
Representative (No 314983)
