Big changes to aged care: what you need to know by 1 July

Credit: The CareSide
In just 109 days, the aged care system will undergo significant changes when the new Aged Care Act comes into effect on 1 July. The Department of Health and Aged Care says these changes will help older Australians have more control over their care, empowering them to live active, self-determined lives.
What does this mean for you?
If you're currently receiving a Home Care Package or waiting for one, don’t worry. You won't be reassessed into one of the new eight classifications when the changes take place. Instead, you'll keep your current level, or the one you're approved for, and get a budget based on that. If your care needs increase, you’ll be reassessed into a higher level.
More control over your budget
The new system will also allow you to carry over some unspent funds – up to $1,000 or 10% of your quarterly budget (whichever is greater). This gives you more flexibility in managing your care.
Contributions to everyday services
You’ll be asked to contribute more towards services you’ve likely paid for throughout your life, such as cleaning or gardening. The contribution for these services will range from 17.5% to 80%. For services like showering and dressing, the contribution will range from 5% to 50%.
Increased funding for aged care
Funding for Home Care Packages will increase, with new packages offering up to $78,000 a year (up from $56,000). You’ll also get additional funding for assistive technology and home modifications (up to $15,000), and end-of-life care (up to $25,000). However, only up to $1,000 or 10% of your annual budget can roll over each year.
Lifetime cap and new fees
The lifetime cap for means-tested fees for home and residential care will increase to $130,000 (from $82,000). The home care annual cap of $13,670 will be removed.
For those in residential care, a new "hotelling supplement" will cover everyday expenses, like meals and activities, with a daily cap of $12.55. Additionally, a non-clinical care contribution (NCCC) will replace the previous means-tested care fee for non-clinical services like personal care, with a daily cap of $101.61. This fee will no longer apply once a resident has been in care for more than four years or has paid $130,000 in total NCCC.
Understanding the numbers
Here’s an example to show how these changes affect aged care fees:
Ron, an 85-year-old single Age Pensioner, is entering residential aged care. He sold his home to pay a $550,000 Refundable Accommodation Deposit (RAD) and has $700,000 in the bank. He also receives a part Age Pension of $19,302 annually.
Pre-1 July 2025:
- Basic Daily Fee: $23,203
- Means-Tested Care Fee: $18,035
- Total First Year: $41,238
Post-1 July 2025:
- Basic Daily Fee: $23,203
- Hotelling Supplement: $4,581
- Non-Clinical Care Contribution: $36,923
- Total First Year: $75,707
The biggest change will be the introduction of the hotelling supplement and higher non-clinical care contributions from 1 July. Plus, the lifetime cap on means-tested care fees will rise to $130,000, giving more protection over time.