Aged Care Costs Are Changing

Significant changes are coming to aged care fees from 1 November 2025.  Whether you are considering residential aged care yourself, or you are helping a loved one navigate the system, these are some of the important changes you need to be aware of.

About The Aged Care Changes

Under the current rules, aged care residents may be required to make an additional contribution towards their costs of care, known as the Means Tested Care Fee (MTCF).  This fee is charged to residents based on their income and assets, as a contribution towards costs of both personal and clinical care.

The changes from 1 November 2025, however, will abolish the Means Tested Care Fee and two new fees will be introduced in its place:

• The Hotelling Supplement Contribution (HSC): this fee is to represent a contribution towards everyday living costs, such as food, cleaning and utilities.
• The Non-Clinical Care Contribution (NCCC): this fee is to represent payment for non-clinical services, such as lifestyle activities, bathing and mobility assistance.

Will You Be Paying More?

It is expected that around half of residents new to care from 1 November 2025 will be required to pay more, under the new fee structure than the existing fee structure.

The amount a new resident can expect to pay will still be charged based on their income and assets but will be assessed at different (generally, higher) rates.

Both fees will have maximum daily caps (indexed twice yearly), expected to commence at $12.55 per day for the HSC and $101.16 per day for the NCCC.

There will also be a lifetime cap applied to total NCCC payments of either $130,000 – an amount most residents will be projected to reach within the first four years of residential care – or the fee will cease after a period of four years of NCCC payments, whichever comes first.

Exemptions For Those Already In Aged Care

Residents who enter aged care by 31 October 2025 will be able to maintain their existing fee arrangements under grandfathering of the current rules.

Existing residents may continue to pay the MTCF, subject to the current lifetime and annual caps, unless they choose to opt-in to the new system. 

Changes To The Home Care Packages Program

From on 1 November 2025, the current Home Care Packages Program and the Short-Term Restorative Care Programme will also be replaced by a new Support at Home program.

Instead of the current ‘income test’ used to calculate home care fees, a personal financial contribution towards the cost of services received will be required.  Contributions will be calculated based on an income and assets test, and the rate will vary between 5% and 80% of cost for the service, depending on the type of service and the recipient’s financial position.

If you or a loved one are considering an aged care service, please contact your adviser direct to discuss your circumstances, or call the office to arrange a time to meet and discuss.