New aged care act: what you need to know

Sweeping reforms to aged care are set to begin on 1 November to help improve the quality, transparency and flexibility of care.

With more care levels, more transparent pricing, and greater control over how your funding is used, the new system aims to better match services to individual needs. Providers will be required to offer detailed cost breakdowns, empowering you to make informed decisions about your care.

While the reforms are a step forward in care quality, they also bring changes to how services are funded, which may mean higher out-of-pocket costs for some.

What you pay depends on your financial situation – whether you receive a full or part pension or are self-funded – and the services you access.

As the aged care landscape evolves, staying informed is key to making confident choices. Whether you’re planning for yourself or supporting a loved one, understanding the new system will help you access the proper care at the right time. 

Help at home

From 1 November, the current Home Care Packages will be replaced by a new program called Support at Home.

The key changes include:

• Eight levels of care (up from four) to better match individual needs
• Extra funding for assistive technology, home modifications and palliative care

Services are expected to remain the same, but the way you pay for them may change.

• For example, clinical care (such as nursing or physiotherapy) will be fully funded by the Government.
• You may pay more for everyday living services (such as meal preparation or cleaning) than for independence supports (such as personal care or transport).
• The out-of-pocket costs for everyday living will range from 17.5 per cent for full pensioners to 80 per cent for self-funded retirees.
• Non-clinical support, such as showering, will cost 5 per cent for full pensioners to 50 per cent for self-funded retirees.

If you were approved for a Home Care Package on or before 12 September 2024, you will be eligible for fee concessions to ensure you are not worse off under the new rules.

The package level you are assigned sets the total funding available to pay for care, with 10 per cent allocated to the care provider to cover the cost of care management.

You then work with your provider to decide how you want to allocate the remaining budget. The provider will set their service fees, and you will make a contribution based on your income.

Residential aged care

Room prices in aged care facilities have been steadily rising following an increase in the Refundable Accommodation Deposit (RAD) threshold from $550,000 to $750,000.

Higher RADs mean you may need to use more of your savings or income to cover aged care costs.

From 1 November 2025, anyone who moves into care after that date and pays a RAD will have 2% of that amount deducted each year for up to 5 years.

You can still opt to pay a Daily Accommodation Payment (DAP), but this will increase every six months in line with inflation.

Other fees include:

• the basic daily fee (set at 85 per cent of the single age pension)
• a means-tested fee or non-clinical care contribution
• potentially a higher everyday living fee (previously known as extra or additional services)

Fee caps and planning ahead

The lifetime cap on aged care contributions remains in place. You won’t pay more than $130,000 (indexed) over your lifetime towards home care and residential care combined.

Understanding how the changes affect your financial future is vital. You’ll need to consider:

• whether someone will remain in the family home
• your current income and assets
• potential age pension entitlements
• estate planning strategies

Use the government’s fee estimator at MyAgedCare to get a clearer picture of your potential costs.

Get advice early

Navigating aged care can feel overwhelming, especially when the decisions you make today will shape the comfort and care of tomorrow. That’s why understanding your options early and seeking the right guidance can make all the difference.

“When it comes to aged care, early planning provides more than financial clarity — it offers peace of mind. The sooner we start the conversation, the better equipped we are to align care choices with your lifestyle, values, and family goals.”
— Andrew Wem, Aged Care Specialist Adviser

At Navwealth, we’re here to guide you through every step with care and understanding. From structuring your assets to exploring funding options and future care pathways, our goal is to help you make confident, well-informed decisions for yourself or your loved ones.

If you’re considering aged care options, reach out to our team today. We’ll take the time to understand your situation and provide the guidance you need to plan with confidence. Contact our team today.