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Understanding the true cost of aged care in Australia can feel overwhelming. With recent reforms coming into effect from November 2025 and varying fee structures depending on your circumstances, it’s natural to have questions about what you’ll actually pay.
This comprehensive guide breaks down all the Fees and Charges Aged Care in 2025, including both residential aged care fees and the new Support at Home program that replaced Home Care Packages in November 2025.
Major Changes to Aged Care in 2025
The Australian aged care system underwent a significant transformation in 2025. From November 1, 2025, two major changes took effect:
- The Support at Home Program replaced the Home Care Package Program and Short-Term Restorative Care Programme
- The New Aged Care Act introduced substantial reforms to residential aged care delivery and management
These changes were designed following the Royal Commission into Aged Care Quality and Safety, aiming to create a more sustainable, equitable, and person-centred system.
Understanding the Support at Home Program (Formerly Home Care Packages)
What is the Support at Home Program?
The Support at Home program helps older Australians remain living independently at home for longer by providing coordinated care and services. This new system offers more flexibility and better access to equipment, assistive technology, and aged care home modifications than the previous Home Care Package system.
Aged Care Package Eligibility
To be eligible for Support at Home services, you must:
- Be 65 years or older (or 50 years or older if you’re Aboriginal or Torres Strait Islander)
- Need support to live independently and safely at home
- Complete an aged care assessment through My Aged Care
The assessment is conducted by a qualified professional who visits your home to evaluate your daily living needs. This typically takes between one to three hours and determines which level of support you require.
Eight Classifications of Support
Unlike the previous four-level Home Care Package system, Support at Home offers eight distinct classifications of ongoing support, providing more tailored funding based on individual needs. Additionally, there are four transitioned Home Care Package classifications for those moving from the old system.
The classifications range from lower-level support for those needing minimal assistance to comprehensive care for individuals with complex or intensive needs.
What Can I Spend My Aged Care Package On?
Under Support at Home, you have access to a defined list of services across three categories:
Clinical Care Services (100% government funded)
- Nursing care
- Allied health services (physiotherapy, occupational therapy)
- Medication management
- Wound care
- Clinical monitoring
Independence Support Services
- Personal care (showering, dressing, grooming)
- Continence management
- Transportation and mobility support
- Social support and community participation
- Allied health and therapy
Everyday Living Services
- Domestic assistance (cleaning, laundry)
- Meal preparation and senior meal delivery
- Home maintenance and gardening
- Shopping assistance
Additionally, the program includes three short-term pathways:
- Assistive Technology and Home Modifications Scheme – Separate funding for equipment and home modifications
- Restorative Care Pathway – Multidisciplinary services to maintain independence
- End-of-Life Pathway – Dedicated funding of up to $25,000 for up to 12 weeks
Aged Care Fees and Charges 2025: Support at Home Costs
Understanding Your Contributions
The amount you pay toward Support at Home services depends on your financial circumstances, determined through an income and assets assessment by Services Australia. The new system divides costs into three categories, each with different contribution requirements:
Clinical Care
- Fully funded by the government for all participants
- No out-of-pocket costs regardless of income or assets
Independence Support
- Full pensioners: 5% contribution
- Part-pensioners/CSHC holders: Between 5% and 50%
- Self-funded retirees: 50% contribution
Everyday Living
- Full pensioners: 17.5% contribution
- Part-pensioners/CSHC holders: Between 17.5% and 80%
- Self-funded retirees: 80% contribution
Important Protection: The “No Worse Off” Principle
If you were receiving or approved for a Home Care Package on or before September 12, 2024, you’re protected by the “no worse off” principle. This means:
- You won’t pay more under Support at Home than you currently pay
- If you weren’t paying income-tested fees before, you won’t pay contributions under the new system
- Your existing lifetime cap of $82,018 (indexed) continues to apply
Lifetime Cap
There’s a $130,000 lifetime cap on non-clinical contributions across both home care and residential aged care. Once you reach this cap, you won’t pay any further non-clinical contributions, ensuring long-term affordability for those requiring extended care.
Budget Management
Your Support at Home budget is divided into four equal quarterly amounts. You can carry forward unspent funds of up to $1,000 or 10% of your quarterly budget (whichever is greater) between quarters, giving you flexibility to manage unplanned needs.
Residential Aged Care Fees and Charges 2025
Moving into residential aged care involves several different types of fees. Understanding each component helps you plan financially and make the best choice for your situation.
1. Basic Daily Fee
Every resident pays this standard fee, which covers daily living expenses such as:
- Meals and refreshments
- Laundry and cleaning services
- Utilities and heating/cooling
- General maintenance
Current rate: $65.55 per day (as of September 20, 2025)
This fee is set at 85% of the full single Age Pension and increases twice yearly (in March and September) in line with pension adjustments. The fee can be automatically deducted from your pension.
Note: Residents in designated remote areas may be charged an additional $1.06 per day.
2. Two Different Fee Arrangements
From November 1, 2025, there are two different fee structures depending on when you entered care:
1 July 2014 Fee Arrangements – Apply if you:
- Entered permanent care between July 1, 2014, and October 31, 2025
- Were receiving or approved for a Home Care Package on or before September 12, 2024
1 November 2025 Fee Arrangements – Apply if you:
- Enter permanent care on or after November 1, 2025
- Were not covered by the “no worse off” protection
3. Means-Tested Contributions (1 July 2014 Arrangements)
Means-Tested Care Fee:
For those under the 1 July 2014 arrangements, the means-tested care fee covers the cost of personal and clinical care. This fee is calculated based on:
- Annual income
- Total assets (including property, superannuation, investments)
- Marital status
- Home ownership status
- Who lives in your home (partner, carer, close relative)
The fee ranges from $0 to $403.80 per day, with protective caps:
Income and Asset Thresholds:
- Asset-free threshold: $63,000
- First asset threshold: $210,555.20
- Second asset threshold: $505,665.60
- Home exemption cap: $210,555.20
Protective Caps:
- Annual cap: $35,238.11
- Lifetime cap: $84,571.66
Once you reach either cap, you stop paying the means-tested care fee until the next anniversary (for annual cap) or permanently (for lifetime cap).
4. New Contributions (1 November 2025 Arrangements)
Under the new arrangements, clinical care is fully government funded home care package, but two new contributions apply:
Hotelling Contribution:
- Covers accommodation-related costs
- Means-tested based on income and assets
- No annual or lifetime cap
- Capped daily at the maximum hotelling supplement amount
Non-Clinical Care Contribution:
- Covers personal care and daily support services
- Ranges from $0 to $101.16 per day
- Subject to a 4-year time limit OR lifetime cap of $130,000 (whichever comes first)
- Combined with Support at Home contributions toward the lifetime cap
These new fees ensure that clinical care—the most expensive component—is always fully funded by the government, while residents with greater financial means contribute more toward non-clinical services.
5. Accommodation Costs
Accommodation fees are a significant component of residential aged care fees and can be paid in three ways:
Refundable Accommodation Deposit (RAD):
- A lump sum payment for your room
- Average RAD in Australia: approximately $470,000 (varies significantly by location and facility)
- Fully refundable when you leave care (subject to any agreed deductions)
- Important 2025 Change: From July 1, 2025, facilities may retain 2% per year for up to five years (maximum 10% total)
- You may not need to pay a RAD if your income is below $34,762 and your assets are below $63,000
Daily Accommodation Payment (DAP):
- A non-refundable daily rental-style payment
- Paid instead of (or in addition to) a RAD
- Calculated as: RAD × Maximum Permissible Interest Rate ÷ 365 days
- Current MPIR: 7.61% (as of October 1, 2025)
Example calculation: For a room with a $500,000 RAD: $500,000 × 7.61% ÷ 365 = $104.25 per day
Important: Your DAP is locked in at the MPIR rate on the day you agree to your room price. It doesn’t increase if the MPIR rises unless you move facilities or enter a new accommodation agreement.
From July 1, 2025: The DAP is indexed twice yearly in line with the Consumer Price Index, so it will increase with inflation.
Combination Payment: You can choose to pay part of the accommodation cost as a RAD and part as a DAP, giving you flexibility to manage your finances while preserving some assets.
6. Who Pays Accommodation Costs?
Your requirement to pay accommodation fees depends on your means assessment:
Full RAD/DAP required if you have:
- Annual income over $84,571.66 AND
- Assets exceeding $210,555.20
Government assistance if you have:
- Annual income below $34,762 AND
- Assets below $63,000
The government pays your accommodation costs entirely if you meet low-means criteria, ensuring everyone can access residential care regardless of financial situation.
7. Income-Free Areas
The following annual income amounts are excluded from income testing:
| Category | Amount (2025) |
| Single person | $34,762.00 |
| Couple, illness separated | $34,034.00 |
| Couple, living together | $26,871.00 |
If your income falls below these thresholds, you only pay the basic daily fee and any applicable accommodation fees—no means-tested contributions apply.
8. Higher Everyday Living Fee (Optional)
From November 1, 2025, aged care homes can offer an optional higher everyday living fee for residents who want enhanced services beyond the standard offering. This replaces the previous extra service fee arrangement.
Key points:
- Must be agreed in writing with detailed service standards
- Cannot be required as a condition of entry
- Must specify costs, standards, and frequency of additional services
- You should not pay for services you cannot or will not use
Aged Care Fees and Charges 2024 vs 2025: Key Differences
Several significant changes distinguish Aged Care Fees and Charges 2024 from the 2025 structure:
Home Care:
- 2024: Four Home Care Package levels
- 2025: Eight Support at Home classifications plus three short-term pathways
Funding for Equipment:
- 2024: Equipment purchased from the package budget
- 2025: Separate funding through AT-HM Scheme
RAD Retention:
- 2024: Full refund (minus agreed deductions)
- 2025: Facilities may retain 2% annually for five years (up to 10% total)
DAP Indexation:
- 2024: Fixed DAP based on entry date
- 2025: DAP indexed twice yearly with CPI
Residential Care Fees:
- 2024: Means-tested care fee covered both clinical and non-clinical care
- 2025: Clinical care fully government funded; separate hotelling and non-clinical contributions
Lifetime Cap:
- 2024: $82,018 for Home Care; $84,571.66 for residential
- 2025: Combined $130,000 cap across all non-clinical aged care
Financial Hardship Assistance
If you’re unable to pay your aged care costs, financial hardship assistance is available. The Australian Government may pay some or all of your fees if you qualify.
To apply:
- Contact Services Australia on 1800 227 475
- Provide documentation of your financial circumstances
- Existing recipients don’t need to reapply until their current determination expires
This safety net ensures that financial challenges don’t prevent anyone from accessing necessary aged care services.
Take the Next Step with BurDel
Understanding Fees and Charges Aged Care doesn’t have to be overwhelming. At BurDel, we’re committed to supporting older Australians and their families through every stage of the aged care journey.
Remember that professional guidance makes a real difference. Whether you need help understanding what you can spend your aged care package on or you’re planning aged care home modifications, the right support ensures you make informed decisions that protect both your wellbeing and your financial security.
Contact us today to take the next step with BurDel and receive the clear, supportive advice you need to navigate these critical choices.
