Changes to residential aged care costs starting July 1: what you need to know

If you're considering residential care for yourself or a loved one, there are some important changes to be aware of, effective from July 1.
What's changing with fees?
The means-tested care fee that you currently pay for residential aged care will be replaced with a contribution towards non-clinical care. This will help cover things like personal care and everyday living expenses.
Residents with enough assets or income will contribute either:
- 7.8% of assets over $502,981, or
- 50% of income over $131,279
You may pay a combination of both, with a daily cap of $101.16. This cap will be adjusted twice a year.
A new lifetime cap of $130,000 will also apply to these contributions, and you will stop paying this fee once you hit the cap or after four years.
Introducing the 'Hotelling Supplement'
In addition to the care fees, there’s a new fee called the Hotelling Supplement, which is essentially a "rent" for the home. This supplement helps cover non-care-related services like catering, cleaning, and gardening.
This supplement will be means-tested starting in July. Residents with sufficient income or assets will pay some or all of the supplement. Here's how it will work:
- 7.8% of assets over $238,000, or
- 50% of income over $95,400
The daily contribution will be capped at $12.55 (as of September 2024) and will also be updated twice a year.
Accommodation costs
Aged care homes must now display their maximum room prices, and residents can negotiate the room price before moving in. The amount you pay will depend on your financial assessment.
If you’re eligible for government assistance, they may help pay part or all of your accommodation costs.
You’ll also have flexibility in how you pay:
- Lump sum: You can pay a one-time amount, which will be refunded when you leave, minus any agreed fees.
- Daily payment: You can opt to pay a daily amount that isn’t refunded when you leave.
- Or you can choose a combination of both options.
These changes are designed to make the process more transparent and flexible for residents. If you have questions, it’s always a good idea to reach out to your aged care provider for personalised advice based on your situation.