5 Biggest Changes Coming to Home Care in 2025

Over the past decade, aged care in Australia has shifted dramatically. Once dominated by nursing homes, the system has evolved to reflect the growing preference of older Australians to age in place. Home care packages now outnumber residential aged care beds — a change that speaks volumes about where aged care is headed.

From 1 July 2025, aged care will take its next big leap forward with the launch of the Support at Home program — part of the government’s once-in-a-generation reforms. The changes will reshape both what the government funds and how much individuals pay for the care and support they need.

Here are the five biggest changes coming to home care you need to know about

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1. No More Basic Daily Fee

At the moment, people receiving a home care package can be asked to pay a Basic Daily Fee of between $11.77 and $13.14 based on the level of package they receive. The Basic Daily Fee is payable every day, on days you receive services and those you don’t..

From July 2025, this Basic Daily Fee will be abolished. Instead, you’ll only pay when you receive services, not just for having a package.

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2. Clinical Care Will Be Government Funded

Another major shift is thatthe clinical care services you receive through your Support at Home package — such as nursing, physiotherapy, and occupational therapy — will be fully funded by the government, with no means testing.

However, for other services — called non-clinical services — you’ll pay a contribution based on your assets and income:

• Everyday Living services (like cleaning, meals, and gardening): contributions range from 17.5% to 80%
• Independence services (like showering, dressing, and medication assistance): contributions range from 5% to 50%

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3. New Means Testing Rules: Assets Will Now Count

Currently, the amount someone pays towards home care is assessed based only on income. Under the Support at Home program both your income and your assets will be taken into account. And whichever creates the greater contribution — that’s the one that will apply.

This new means test will mirror the Age Pension system, with thresholds depending on whether you are single or partnered, and whether you own your home.

Let’s break it down with an example:

A single homeowner:

• With assets under $314,000 and income below $35,266/year will pay:
  • 5% towards their independence services
  • 17.5% towards their everyday living services
• At the top end, if they have assets of $913,442+ or income of $99,025+/year, they will pay:
  • 50% for independence services
  • 80% for everyday living services
• In between? Contributions will be calculated on a pro rata basis.

This new system is designed to make contributions more equitable — but for many, it will mean paying more than they do under the current rules.

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4. More Funding and Flexibility

Support at Home will also bring more money into the system and give people greater access to services when they need them.

The number of home care package levels will expand from four to eight, and the maximum annual funding will rise from $56,000 to $78,000. That means more support — and more tailored packages — for people with varying levels of need.

Two additional initiatives will be rolled into the program:

• Assistive Technology & Home Modifications: Up to $15,000 available immediately so you can get vital home modifications or equipment without delay.
• End of Life Pathway: Up to $25,000 for palliative care in the home in the final three months of life.

Something important to note is that you can only roll over $1,000 or 10% of your annual budget each quarter — whichever is higher. Under the current system people often “save up” funds for future care needs, under the new systme unspent funds over the allowed limit will be lost.

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5. Removing the Annual Cap and having a Higher Lifetime Cap

The current annual cap for means tested home care fees ($13,724) will also be abolished and the lifetime cap on means tested fees across home care and residential aged care will increase from $82,347 to $130,000 meaning that you will be able to pay almost $50,000 more before the lifetime cap kicks in.

Importantly, if you were approved for a home care package or receiving services as of 12 September 2024, you’ll be protected by a “no worse off” principle. The principle applies to your means tested fees in home care and if you later move into residential aged care, however, it does not apply to accommodation payments in residential aged care.

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What It All Means

Perhaps the most exciting part of the Support at Home program is the promise to fix one of the system’s biggest problems: the waitlist. Right now, more than 83,000 people are waiting for home care, and it can take 11 months or more to get the package you need. The goal of these reforms is to bring that wait time down to just three months.

Because no matter how generous the funding is or how fair the contributions are — if people can’t get care when they need it, the system fails them.

About Rachel Lane

Rachel Lane explains the ins and outs of retirement living and aged care like no-one else. Her ability to break down complex arrangements and explain the pros and cons is embraced by millions of readers and she frequently speaks on radio and television. As Principal of Aged Care Gurus she oversees a national network of specialist financial advisers. Rachel holds a Masters in Financial Planning and has written several books including the best seller “Aged Care, Who Cares?”