Comprehensive Guide to Affordable Aged Care Services and Fees in Australia 2025

Overview of Affordable Aged Care Services in Australia

The Australian Government supports seniors in living independently and with dignity, whether at home or in residential care. The Support at Home program, commencing on 1 July 2025, replaces previous Home Care Packages and Short-Term Restorative Care programs.

This program offers eight levels of support (up from four), with funding ranging approximately from $11,000 to $78,000 annually based on assessed needs. It is designed to provide more flexible and personalised care to support older Australians living at home longer.

Eligible Australians include:

• Those aged 65 years and over
• Aboriginal and Torres Strait Islander Peoples aged 50 and over
• People aged 50+ who are homeless or at risk of homelessness

Applicants undergo assessment using the Integrated Assessment Tool (IAT), introduced in 2024, which assists in developing a personalised care plan aligned with individual goals.

Changes in Home Care Support

The Support at Home program introduces a cost-sharing model with a lifetime fee cap alongside expanded care levels. Key aspects include:

• A lifetime cap of $130,000 on non-clinical care fees across home and residential aged care to limit cumulative out-of-pocket expenses.
• Income-based fees: Contributions towards care costs are adjusted based on financial capacity, with protections to ensure current home care package recipients do not pay increased fees immediately.
• Quarterly budgets: Care funds are allocated quarterly, with some capacity to carry over unused funds, allowing flexibility in managing care services.
• Additional services include restorative programs and end-of-life support aimed at meeting a range of care needs, including for people with dementia receiving home care.

Explanation of Residential Aged Care Fees in 2025

Residential aged care is an option for individuals with higher care needs. Fees generally cover accommodation, care, and daily living expenses:

• Accommodation costs (Refundable Accommodation Deposit - RAD): These fees vary by facility and location, generally ranging from $400,000 to over $1 million.
  • The RAD is refundable but may include a retention amount of up to 10% over five years (approximately 2% per annum) used by providers for capital improvements.
  • Residents may alternatively choose to pay a daily accommodation payment (similar to rent), which is indexed to inflation.
• Care fees: Income-tested contributions paid by residents towards their daily care.
• Basic daily fees: Cover meals, cleaning, laundry, and utilities paid by all residents.

People with lower assets (commonly under $200,000, excluding the family home) may be eligible for government subsidies to reduce accommodation costs.

While residential care availability varies and bed capacity is limited, reforms seek to encourage provider investment through adjusted financial incentives balancing government funding and resident contributions.

Government Subsidies and Support in 2025

Government funding aims to support affordability, particularly for lower-income seniors. Key points include:

• Means testing applies to fees; however, the primary place of residence is excluded from asset assessments.
• Subsidies are provided based on assessed care needs and financial circumstances.
• From July 2026, government-set price caps will apply to in-home care services to promote fairness and manage costs.
• The Commonwealth Home Support Programme (CHSP) continues assisting those with low-level care needs and will merge into the Support at Home program by 2027.

Seniors are encouraged to register early through My Aged Care (myagedcare.gov.au) to access assessments, subsidies, and care coordination services.

Considering Nursing Homes and Aged Care Facilities

Residential aged care (or nursing homes) offer clinical and personal care when home-based support is insufficient. Important considerations include:

• Capacity constraints: Availability of aged care beds may lead to waiting periods.
• Variation in care quality: Family advocacy can be important in maintaining care standards and coordination.
• Fee structures: Costs include RADs, daily fees, and income-tested care fees, designed to balance government support and resident contributions.
• Dementia care: Some facilities provide specialised dementia care, and home care packages under the Support at Home program also offer tailored services for people with dementia.

Retirement Villages and Alternative Living Arrangements

Retirement villages offer community living options for some seniors, distinct from clinical nursing care:

• Residents commonly own their homes but lease the land, incurring ongoing fees and possible exit costs.
• Assisted living might be available for those needing lower levels of support, though comprehensive nursing care is typically not included.
• It is important to review all contracts and fees carefully, as some charges and exit fees may impact affordability.

These options suit seniors with lower care needs but do not replace formal aged care services when higher support is required.

Dementia Care and Related Services

Dementia-specific supports are part of aged care service delivery. As of 2025, the Support at Home program includes:

• Restorative care services adapted to meet dementia-related needs
• End-of-life support designed to uphold quality of life and dignity
• Personalised care planning through IAT for appropriate care approaches

In cases of complex dementia, a mix of home support and residential care with specialised units may be advised.

Steps to Access Aged Care Services

To access aged care support, you can:

• Register with My Aged Care: The official portal (myagedcare.gov.au) provides access to assessments and service coordination.
• Complete the IAT assessment: This helps create a personalised care plan.
• Understand fee structures: Learn about income-tested fees, accommodation payments, and the lifetime fee cap.
• Explore suitable living arrangements: Options include home care, residential care, and retirement communities.
• Engage family and support networks: Family advocacy can enhance care experiences and coordination.

The aged care system in Australia is evolving to address growing demand and quality expectations, balancing government funding with resident contributions. The Support at Home program expands in-home care options and introduces protections such as a lifetime fee cap. Residential care fees include accommodation, care, and daily living costs, with subsidies in place to support affordability for those with lower assets. Although challenges with facility availability and workforce limitations remain, reforms aim to improve access and quality.

Early planning, understanding fees and subsidies, and exploring various care options can assist older Australians and their families in making informed decisions aligned with their needs and preferences.

Sources

• The 2025 Support at Home Program - Aged Care Made Easy
• Aged Care Changes: What Will You Need to Pay? - Retirement Essentials

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