On ABC’s Drive Program this week, Mark Rattigan spoke about the upcoming changes to Aged Care. Here is a summary of whats changing and what you should be doing to prepare if this could affect you or your loved ones.

From 1 November 2025, new rules will apply for older Australians entering residential aged care or starting a Support at Home package. These changes aim to deliver more equitable, transparent, and sustainable aged care—but what do they really mean for everyday Australians?

Whether you’re helping a parent transition to aged care or planning ahead for yourself, it’s vital to understand how the rules are evolving, what stays the same, and how these shifts could affect the cost of care and your family’s financial future.

Support at Home Replaces Home Care Packages

Under the new Aged Care Act 2024, all Home Care Packages (HCPs) will be replaced by a more flexible system called the Support at Home (SAH) program. These changes were originally due to start on 1 July 2025, but have been deferred to 1 November 2025 for all new care entrants.

Key Differences:

Current System (HCP) From 1 Nov 2025 (SAH)
4 package levels 8 levels of ongoing care + 2 short-term packages
Limited flexibility in providers More control over providers and services
Complex fees Standardised contribution model

The new SAH model promises better tailoring of services—especially for clients needing higher-level support—but will still rely on strong family or informal care networks to remain viable for those living alone.

Important Note:

If a person is already on a Home Care Package before 12 September 2024, they may be grandfathered under existing rules, even after moving into permanent care post-November. Speak to an adviser to explore this.

What About the “No Worse Off” Promise?

The Government has introduced a “no worse off” guarantee for existing Home Care Package recipients when they transition to the new Support at Home program.

This means:

  • No one already receiving home care services will pay more under the new system unless their circumstances change (e.g., income or assets increase).

  • Clients will retain access to equivalent services under their new SAH level.

The intent is to provide continuity of care and cost stability for those already in the system.

For new clients starting after 1 November 2025, standardised income-tested contributions will apply, depending on your Centrelink means test.

Big Shifts in Residential Aged Care from 1 November 2025

Perhaps the most significant changes impact those entering residential care after 1 November 2025.

RAD Retention Introduced

Until now, Refundable Accommodation Deposits (RADs) were fully returned to residents or their estates when they left care. That will change.

From 1 Nov 2025:

  • Providers will retain 2% per year of any RAD paid.

  • This is capped at five years, meaning a maximum retention of 10%.

  • The RAD remains government guaranteed, but the refund will be reduced by the retained portion.

Example:
If you pay a $500,000 RAD and stay for 5+ years, the estate receives $450,000.

This change aligns aged care with broader accommodation models and helps providers improve service quality, but it makes timing and strategy even more important.

Indexed DAPs

Daily Accommodation Payments (DAPs) for market-price payers will now be indexed every March and September, increasing cost predictability (and complexity).

Fee Categories Are Changing Too

From 1 November 2025, care fees will be split more clearly:

Fee Type Purpose Means Tested?
Basic Daily Fee Everyday living expenses No
Hotelling Contribution (HC) Shared living costs like meals, cleaning Yes
Non-Clinical Care Contribution (NCCC) Personal care and support Yes
Higher Everyday Living Fee (HELF) Optional extras (e.g. Foxtel, wine) Voluntary

The Means Test Amount (MTA) will now drive all fee types and update monthly, reinforcing the need for accurate Centrelink records and regular reviews.

Grandfathering and Transitional Rules

  • Anyone in residential aged care before 1 Nov 2025 will remain under the current rules unless they voluntarily opt into the new system.

  • People receiving a Home Care Package as of 12 Sept 2024 may also retain the current fee structures if they later enter care.

This means many families will be navigating a two-tiered system, where spouses and siblings may be on different fee rules. Aged care advice will be more crucial than ever to avoid costly mistakes or missed entitlements.

What Should Families Be Doing Now?

  1. Get Assessed Early

    • Contact My Aged Care to start an Aged Care Needs Assessment. Don’t wait for a health crisis.

  2. Review Centrelink Records

    • Ensure asset and income declarations are up to date.

    • This directly affects your Means Test Amount (MTA) and all future fees.

  3. Seek Financial Advice

    • Work with accredited aged care specialists to model scenarios and optimise strategies like:

      • Partial RAD payments

      • Using DAP-from-RAD strategies

      • Preserving Age Pension entitlements

      • Estate planning with retention in mind

  4. Understand the Home Implications

    • Whether you keep, sell, or rent the family home can drastically change care costs and pension eligibility.

Final Thoughts: Planning Ahead = Better Outcomes

The aged care landscape is shifting, and while the changes aim to improve care quality and access, they will also introduce more complexity—especially around costs and entitlements.

Merideon Wealth’s aged care specialists are here to help you:

  • Navigate transitional rules

  • Maximise Centrelink entitlements

  • Protect your estate and manage accommodation strategies

Need help with aged care financial planning?
Visit www.merideon.com.au or contact our team for personalised advice that aligns with your family’s needs.