A guide to aged care in Australia: Understanding your options in 2025

Navigating aged care can be one of the most significant and emotional financial decisions for Australian families. With the new Aged Care Act 2024 coming into effect in 2025, there are big changes to how care is delivered, what it costs and how families can plan ahead.

At Apt Wealth Partners, we believe informed decisions lead to better outcomes for both quality of care and financial wellbeing. Here’s what you need to know about the changes and financial planning for aged care.

Understanding the new aged care act reform

The Aged Care Act 2024 replaces legislation that’s been in place for nearly three decades. The reform aims to make aged care more person-centred, transparent and sustainable.

New fee arrangements apply from 1 November 2025 for anyone entering aged care. These changes reshape how contributions are calculated, introduce new categories of fees and adjust the balance between government funding and individual payments. As a result, many people now entering care may contribute more than under the previous system.

The changes are designed to:

• strengthen the rights of older Australians
• improve the quality and accountability of care providers
• simplify access through a single Support at Home program, replacing existing home care schemes.

While these updates promise a more flexible system, they also bring added complexity, making early aged care financial planning more important than ever.

Types of aged care available

When it comes to aged care, one size doesn’t fit all. Understanding your options helps you choose care that supports your lifestyle, health and financial goals.

Home care

For many Australians, staying at home is the preferred choice. The Support at Home program, launched in November 2025, will make home-based care more flexible and responsive. Services can include help with daily tasks, transport, meals and allied health support, allowing you to live independently for longer.

Residential aged care

If living at home is no longer practical or safe, residential care offers 24-hour support, meals, accommodation and medical supervision. Under the new rules, payment structures will change, with updated means testing and new contribution types, such as ‘hotelling’ and ‘non-clinical care’ contributions. The refundable accommodation deposit (RAD) may also evolve under the reforms, so understanding how these payments work and what portion is refundable is essential.

Respite care

Respite care provides short-term support for older Australians or temporary relief for family carers. It can be a helpful bridge during recovery or while exploring long-term care options.

Financial considerations: Fees, means testing and funding options

Aged care costs can be complex. They vary depending on your income, assets and the type of care you receive.

Here’s a simplified overview:

• Basic daily fees: Contribute to everyday living costs such as meals, laundry and cleaning. Everyone pays this fee.
• Means-tested fees: Calculated based on your income and assets to determine how much you contribute towards your care. The terminology and calculation of means-tested fees for new residents changed from 1 November 2025, meaning fees may be assessed differently compared with those already in care.
• Accommodation costs: For residential care, you may pay a refundable accommodation deposit (RAD), a daily accommodation payment (DAP) or a mix of both. For new residents from 1 November 2025, portions of these payments may include a retention amount (part of the RAD being used to cover costs, so no longer fully refundable to the estate) and DAPs being indexed now.
• Additional service fees: Optional extras like lifestyle programs or premium rooms. These fees are now known as Higher Everyday Living Fees (HELF). Over the coming year, existing residents will transition to the new, optional HELF framework.

From 1 November 2025, new fee arrangements apply for every new person entering care. Lifetime contribution caps have risen and new categories of costs introduced. Since the new rules are already in force, there is no longer any timing choice or ability to enter under the old arrangements. This makes clear financial modelling and specialist aged care advice essential before making decisions.

Funding care can come from several sources, including superannuation, savings, property or investment income. Deciding which assets to use, and in what order, can significantly affect long-term outcomes both for your comfort and for preserving wealth for loved ones.

Importantly for low income and low asset Australians there is still an excellent safety net of fully funded places, or highly subsidised places.

How a financial adviser can help

Aged care decisions need to balance both emotional and financial considerations.

At Apt Wealth Partners, we help simplify the process by explaining the rules in plain language, modelling the costs of different care options and structuring your assets so your finances support your care needs. We also guide you on timing decisions and work alongside your accountant, lawyer and family to ensure your plan fits seamlessly across all areas of your life.

Ultimately, good aged care financial advice gives you clarity, control and peace of mind — so you can focus on what matters most.

Practical checklist for families

Making aged-care decisions can be emotional, but having a clear plan helps reduce stress. Here’s a quick checklist to guide your next steps:

1. Start the conversation early

Talk with family about preferences for home or residential care and consider who will help manage decisions.

2. Get an aged care assessment

Contact My Aged Care to determine eligibility for government-funded services.

3. Review your finances

Understanding your income, assets and how they’ll be assessed under aged care means testing.

4. Seek professional advice

A financial adviser can model costs and help you choose funding options that align with your long-term goals.

5. Compare providers

If considering residential care, review multiple facilities and their fee structures before committing.

6. Update your estate plan

Check that your will, enduring power of attorney and other documents reflect your current wishes.

7. Revisit regularly

Aged care needs and costs can change over time. Schedule regular reviews with your adviser to stay on track. Keeping your information up to date with Centrelink/DVA ensures the contributions you pay are correct and any entitlements to payments to you like Age Pension are also accurate. If you engage for home help, you can also be reassessed with Myagedcare regularly as your health situation changes to ensure you have the right budget for your needs, and reviews with your service provider to ensure the right services to keep you safe and comfortable at home are in place.

The bottom line

Aged care is about more than cost; it’s about comfort, dignity and peace of mind for you and your loved ones. With new rules in effect, now is the time to understand your options and plan ahead.

At Apt Wealth Partners, we help Australians make confident decisions about aged care by combining financial expertise with empathy and practical guidance. Whether you’re planning for yourself or supporting a loved one, we’re here to help you navigate the path forward. Contact us to speak with an adviser about aged care financial advice.