The cost of care will increase on 1 July 2025 - Act now to lock in current rates

If you or a loved one is likely to need additional support in the form of home care or residential care in the next 12 months we recommend that you take action now.

From 1 July 2025 a new Aged Care Act comes into effect resulting in greater means testing and higher fees for those deemed able to afford it. While the changes won’t affect anyone already on a home care package (HCP) or in residential care, anyone entering the system from 1 July 2025 will be subject to the new fee structure and rules, and the financial impact has the potential to be significant.

By informing yourself now of how these changes are likely to affect you or your loved one’s financial sustainability in the future you may be able to take action to improve your position.

Some key changes to home care (effective 1 July 2025):

Greater means-testing designed to yield greater contributions from those that can afford it.
Home care recipients will no longer be able to accumulate unspent funds in their packages.
A doubling of package levels from 4 to 8 means that recipients will have tighter budgets as the package funding more closely fits their assessed needs.
Care package management fees charged by providers limited to 10% of package budget (currently range from 20-35%) meaning providers will have to recoup costs in excess of this through higher hourly charge out rates for services.

Some key changes to residential care (effective 1 July 2025):

Nursing homes must deduct 2% pa, and up to 10% over 5 years, from deposits paid for accommodation. On a $1 million room a resident would lose $100,000 over 5 years.
Introduction of daily ‘hotelling supplement’ added to ‘basic daily care fee’ (BDCF) that sees a 20% increase in the basic daily care fee paid for most people entering residential aged care.
An extension of the lifetime fee capping from 2.5 to 4 years, meaning that residents will contribute to their care cost for longer.
A higher contribution rate per dollar of asset held for care cost contributions.

Act now and lock in current fees

We have over 15 years’ experience in guiding families through the aged care maze. We have aged care experts and access to the most up-to-date information on the aged care changes to help you make informed decisions at the most emotional of times.

Take action now by contacting our Karaco Wealth advisor Nathan Tiberi – nathant@karaco.com.au, 03 9836 5711, for an obligation free discussion with an aged care expert.

This information is general in nature and is provided by Karaco Wealth . It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. PRPIA Pty Ltd, trading as Karaco Wealth is an Authorised Representative of Partners Wealth Group Financial Advice Pty Ltd. AFSL 558563 | ABN 33 662 748 496

Any advice contained in this website is of a general nature only and does not take into account your circumstances or needs. You must decide if this information is suitable to your personal situation or seek advice.