If you or a loved one is planning for aged care, big changes are on the way.
From 1 November 2025, Australia’s aged care system will look very different with new fees, higher contribution caps, and stronger consumer rights.
The goal is to make aged care fairer and more transparent. But the new system will also affect how families plan, pay and qualify for government support.
Understanding what’s changing now could save you confusion, stress and unnecessary costs later.
Australia’s aged care model hasn’t kept pace with real costs or the growing number of older Australians needing support. The reforms are designed to:
Better align what residents pay with the actual cost of care.
Simplify fee structures and assessments.
Strengthen residents’ rights and provider accountability.
While these are positive steps, the changes will also reset how fees are calculated, how means testing works, and what financial responsibilities families carry.
If you’re entering aged care from 1 November 2025, you’ll automatically be assessed under the new system.
If you’re already in care, you’ll remain on the current rules, meaning you won’t pay higher fees or lose existing entitlements.
This “grandfathering” protects current residents while allowing the new framework to roll out for everyone else.
1. New names for daily fees
Hotelling Contribution – covers everyday living costs like meals, cleaning and laundry.
Non-Clinical Care Contribution – pays for personal and lifestyle support such as social activities or transport.
Separating these fees makes it clearer what you’re paying for and gives families greater transparency.
2. Higher Everyday Living Fee (HELF)
HELF will replace the current additional services fee and Extra Services Fee. HELF is an optional fee for Residents who wish to receive greater level of services with regards to either respite or permanent aged care residents.
3. Higher contribution caps
Under the reforms, the maximum amounts a resident can be asked to contribute each year will increase.
New Non-Clinical Care Contribution (NCCC) caps:
Annual cap: maximum $38,434.50* per year
Lifetime cap: Reached when the earlier of the following is reached:
contributions total $135,318.69 or;
the resident has received 4 years (1,460 days) of care.
New Hotelling Contribution cap:
Annual cap: maximum $8,084.75* per year.
These caps still protect affordability but allow providers to recover more of the true cost of care.
*If the calculated amount is less than $1 per day, it won’t be charged
4. RAD retention introduced
Until now, providers generally had to refund most Refundable Accommodation Deposits (RADs) in full when a resident left care.
From November 2025, facilities will be able to retain 2 percent per year for up to five years (a maximum of 10 percent).
That means families will get back 90–100 percent of the RAD depending on the length of stay.
This change gives providers a steadier income stream and more incentive to maintain quality facilities.
5. Clinical care becomes fully government-funded
Perhaps the most positive shift: residents will no longer pay clinical care fees.
The Government will cover all healthcare costs including nursing, medications and allied health, while residents pay only for accommodation and non-clinical services.
That’s a major saving for anyone who needs ongoing medical support in care.
6. Simpler home-care support
The current Home Care Packages and Short-Term Restorative Care programs will merge into one streamlined Support at Home program.
Means testing will align with Age Pension rules, making assessments faster and more consistent for people receiving care at home.
7. Stronger rights and protections
A new, legally binding Statement of Rights will replace the voluntary Charter of Rights.
It clearly defines what residents can expect — from quality standards and dignity of care to complaint handling and accountability — giving families more confidence in the system.
Earlier this year, Margaret’s family planned for her to move into residential aged care due to declining mobility. However, the challenge of finding a residence that Margaret was happy with and waitlists due to high occupancy levels, delayed the transition.
As a result of this delay, Margaret is now expected to enter permanent care in early 2026 and under the new aged care fee reforms.
Margaret has assessable assets of $750,000. The residential care home she prefers has an advertised price of $500,000 (RAD) for the room.
Her family wants to understand what this delay means financially.
| Fee type | Pre 1 Nov 2025 rules | Post 1 Nov 2025 rules |
|---|---|---|
| Basic daily care fee | $23,926 | $23,926 |
| Means-tested care fee | $7,859 | - |
| Hotelling Contribution | - | $8,085 |
| Non-Clinical Care Contribution | - | $17,046 |
| RAD Retention (Year 1)** | $0 | $9,909 |
| Total Year 1 care costs | $31,785 | $58,966 |
Assumes Margaret is a non-homeowner and does not consider any potential Age Pension entitlements or any other income generated off Assets. Assumes advertised RAD is paid in full and no Daily Accommodation Payment Fee (DAP). Assumes no Additional or Services Fees (pre-1 Nov 2025). Assumes no Higher Everyday Living Fee (post-1 Nov 2025). Assumes no Grandfathering arrangements. **Calculated as 2% of reducing refundable RAD balance each month & MPIR = 7.61% per annum. Does not take into account modelling any potential Age Pension entitlements or other income generated off investments.
As you can see from the table above, this scenario shows a higher level of attributable costs being placed upon future residents to help support the sustainability of the aged care sector. In Margaret’s situation, that means she will be paying $27,181 more in the first year.
The reforms aim to simplify aged care, but they also change the way your finances are assessed.
Here’s what to keep in mind:
Means testing will follow Age Pension rules for pensioners, while non-pensioners must provide detailed financial information or face maximum fees.
Income and assets, including the family home, will continue to influence what you pay, but the formulas and thresholds will shift.
Interest rates on DAPs will lock in at the time you enter care and rise only with inflation, making future costs easier to predict.
If you already have a plan in place, it’s worth reviewing now to see how these updates could affect you.
At Findex, we help Australians make sense of aged care — without the jargon or overwhelm. Our professional aged care advisors can help you:
Review your current plan to make sure it still works under the new system.
Model your options and compare staying at home with residential care.
Understand your entitlements to help avoid missing benefits or paying more than necessary.
Structure your assets so you maintain flexibility and financial control.
Aged care is one of the biggest financial decisions many families will make. Taking time now to understand the coming reforms can protect your finances and your peace of mind for years to come.
Book a complimentary Discovery Meeting with a Findex adviser today and we’ll help you plan with clarity, confidence and care.
The individuals featured in this article are fictional and any resemblance to real persons is purely coincidental.
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