The Government introduced new Aged Care Legislation to Parliament last month which includes major changes to both Home Care and Residential Aged Care, including changes to fees and charges from 1 July 2025.
New reforms include funding from both the Government and aged care residents. Aged care recipients who have the ability to pay a higher contribution toward their care will be asked to do so. Part of these new reforms is that the Government will pay for clinical care, and the aged care resident will pay a greater contribution for everyday living and accommodation expenses.
Changes are proposed to both accommodation payments and ongoing care fees for residential care, commencing 1 July 2025. Grandfathering will apply to those already in residential aged care when the new rules commence.
The reforms to residential aged care include:
- Accommodation payments
- Accommodation price cap – increased from $550,000 to $750,000.
- Introduction of a retention amount: 2%p.a. of lump sum accommodation payments for a maximum of 5 years
- Indexation of Daily Accommodation Payments (DAP)
- Phasing out of Refundable Accommodation Deposits (RAD) by 2035
- Ongoing fees
- Introduction of a new means tested “Hotelling Contribution” of up to $4,580p.a.
- Means tested care fee replaced by a new “Non-Clinical Care Contribution” of up to $36,923p.a.
- Additional/extra service fees replaced by a new “Everyday Living Fee.”
If the proposed legislation becomes law, many people who enter residential aged care on or after 1 July 2025 will pay higher fees and charges for residential aged care.
If you or a loved one are entering Aged Care and you need assistance to determine the fees and other financial implications, please contact our office on 8378 4000 to arrange an appointment with Matthew Kelly.
