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Upcoming Changes to Aged Care Funding

July 23, 2025

From 1 November 2025, the New Aged Care Act will come into effect, placing the rights and wellbeing of older Australians at the heart of every service.

What will this mean for you or your loved ones?

The Act will streamline and enhance the delivery of services in homes, communities, and residential aged care settings. One of the most significant updates is the introduction of a new funding model designed to make costs clearer and better tailored to individual needs.

If you believe these changes may impact your upcoming situation, it’s important to stay informed and begin planning ahead to discover how these reforms could impact you.

What do I need to know?

From 1 November 2025, aged care fees will change. This includes how much you and the government contribute and how these amounts are calculated. These changes ensure that the system is more balanced, sustainable and fair.

The funding arrangement changes vary based on whether you are currently receiving a Home Care Package or are residing in an aged care home.

Changes for Home Care Package recipients

From 1 November 2025, the current Home Care Packages Program will transition to the new Support at Home program. This update aims to provide older Australians with better access to tailored services, equipment, and home modifications—helping people stay healthy, active and connected in their homes.

Key points:

Overall, these changes are designed to be fairer and offer more flexibility, with fee caps and protections to ensure no one is disadvantaged.

If you are in an aged care home

Upcoming changes to residential aged care contributions are designed to create a fairer and more sustainable funding model.

Means testing will continue to apply for residential aged care; however, the types of contributions required will be revised. Individuals residing in or entering permanent aged care before or on 31 October 2025 will retain their existing residential and accommodation payment arrangements for the duration of their stay.

For those entering aged care facilities from 1 November 2025, modifications to the means assessment will result in approximately half of new residents contributing more. The assessment of the family home and refundable accommodation deposits remains unchanged.

Hardship assistance will continue to be accessible for participants of both residential care and Support at Home programs, ensuring equitable access to care.

Contributions Toward Everyday Living Costs

Contributions for Non-Clinical Care

Some providers offer premium services for an additional charge, known as the Higher Everyday Living Fee. Consent to pay this fee cannot be requested until after permanent entry to care. Prospective residents may consider whether they wish to opt for these supplementary services.

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