Support, guidance & advice for todays primary carers
Biggest changes to Aged Care in almost 30 years – what you need to know
Article by
Rachel Lane
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The changes to aged care that you need to know about
Next year will see huge changes to aged care, our resident finance expert Rachel Lane tells us what we need to know.
At the heart of the reforms is that the government will pay for clinical care while those receiving aged care will pay more towards “non-care services” such as help with showering, dressing, preparing meals, shopping and gardening.
Home Care Changes
The new Support at Home Programme will combine the current Home Care Package and Short Term Restorative Care programmes and introduce an Assistive Technology and Home Modifications Scheme to give you access to home modifications and assistive technologies (up to $15,000) and an End of Life Pathway to provide up to $25,000 of funding for palliative care.
The current 4 levels of Home Care Package will be increased to 8 with the maximum funding increasing from $61,400 per year to $78,000 per year.
The services within your Support at Home package will be designated as either clinical care, independence or everyday living. The government will pay for all of your clinical care and you will pay towards your independence and everyday living services based on your assets and income.
| The Cost of your Support at Home Package | |||
| Cinical Care | Independence | Everyday Living | |
| Nursing and therapists | Showering, getting dressed, medications | Cleaning, gardening, meal preparation, shopping | |
| Full Pensioner | 0 | 5% | 17.5% |
| Part Pensioner and CSHCC Holder | 0 | 5%-50% based on assets and income | 17.5%-80% based on assets and income |
| Self Funded | 0 | 50% | 80% |
Changes to Aged Care Homes
The changes to aged care home costs include accommodation and ongoing services.
From 1 January 2025 the market price cap on Refundable Accommodation Deposits (RAD’s) will increase from $550,000 to $750,000. The cap sets the price beyond which an aged care home needs government approval. While there are plenty of examples of prices above and below this price the effect of the cap is that we see a clustering of prices around the cap. The reforms don’t change who is classified as a Market Price payer, if you have assets above $206,039 you need to pay the market price. Meaning many people with $300,000 or $400,000 will need to pay much more than they can afford.
From 1 July aged care homes will be able to charge an exit fee of 2% per year for a maximum of 5 years (10%). So if you pay a RAD of $750,000 and stay for 5 years $75,000 will be deducted.
When it comes to the ongoing cost you will pay the Basic Daily Fee, set at 85% of the Age Pension and beyond this a hotelling supplement and a Non-Clinical Care Contribution based on your assets and income and a higher everday living fee if you choose to get “extras”.
| What an Aged Care Home will cost you | |||||
| Accommodation | Basic Daily Fee | Hotelling Supplement | Clinical Care | Non-Clinical Care Contribution | Higher Everyday Living Fee |
| Market price cap $750,000 2% per year up to 10% cap deducted from RAD | Paid by everyone regardless of means | 7.8% of assets above $238,000 50c per dollar of income above $95,400p.a | Paid by Government | 7.8% of assets above $502,981 50c per dollar of income above $131,279 | User pays services such as Hairdressing, Beer/Wine with meals |
| $64 per day | Up to $13 per day | $0 per day | Up to $101 per day | ||
| $23,200p.a | $4,600p.a | $0 | $36,923p.a | ||
| Capped at 4 years and $130,000 | |||||
There will be no changes to the means testing of the former home, it will be included in your aged care assets up to a capped value of $206,039 unless a protected person live there (in which case it is exempt).
A “No worse off principle” will apply to people already receiving aged care (or waiting for a Home Care Package). It will ensure that you don’t pay more when the reforms start. The exception here is people moving from Support at Home to an aged care home who will be subject to the new accommodation payments.
While the message has been that “wealthy Australian’s will pay more” the changes to aged care will see most people pay more for aged care, some will pay a lot more.
About Rachel Lane
Rachel Lane explains the ins and outs of retirement living and aged care like no-one else. . 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?”
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Karen Brown, the Culinary Virtuoso
of Garden City Aged Care Services
I have sent the following letter to the 4 ministers responsible foe age care:
john readman
Tue, 17 Sept, 09:48 (8 days ago)
to senator.ruston
Senator The Hon Anne Ruston
Shadow Minister for Age Care
Dear Minister Ruston
I am writing to express my concerns and seek clarification regarding the proposed changes to the aged care requirements. As an 82-year-old who has worked continuously throughout my life, I have diligently prepared for my retirement and end-of-life care. However, the varying requirements from government agencies such as Centrelink, My Aged Care, and the Taxation Office create significant confusion and anxiety for the elderly.
The overwhelming amount of disparate information is unsettling, and the proposed increase in nursing home bed fees to boost profits is particularly unnerving. There is an entire industry that seems to complicate matters further rather than simplify them for the elderly. Many services, including those with calculators, estimators, and retirement advisers, appear to be more focused on profit than providing clear guidance. This complexity may be why older individuals resist change.
Specific items in the proposed legislation that are likely to affect me include:
Replacement of home care packages
Short-term restorative care program
Support at Home program
Advance care and health directives
Guardianship and administration
Providers of home care charging care recipients
Ongoing assessment and planning
Personal care and clinical care
Services and supports for daily living
Home care and residential aged care services
Sustainability, residential aged care quality and safety, workforce, and governance
I am particularly confused by the statement: “A no worse off principle will provide certainty to people already in aged care and they won’t make a greater contribution to their care.” This is perplexing, especially in light of the increased costs of nursing home beds and the rising
maximum accommodation charge, along with the 2% charge over five years. For example:
“The maximum accommodation charge will increase from $550,000 a room to $750,000 a room. As now, providers can seek government approval to charge more. This can still be paid as a lump sum deposit, but providers will now be able to hold onto a portion of the deposit – 2 percent of it each year for five years. The treatment of the family home will be unchanged, with only the first $206,039 assessable for means-testing.”
Given this complexity and the uncertainties that these changes bring, I am hesitant and confused about my future and that of others in my age bracket. I kindly request your assistance in clarifying these changes and their implications for elderly Australians like myself.
Thank you for your attention to this matter. I look forward to your response.
Yours sincerely,
John Readman
Ph: 0403551175
Email: lohn.readman@gmail.com
Yyour statement about “non care services” leaves me bewildered. How can you not challenge this notion with Government.
It seems that once we are “older” we no longer need to be clean thus leaving us open to sskin diseases, we no longer need to be dressed PJ days and nights follow us being unable to get clothes on and off, laundry once a week what abour people with inconttinence no dry bedding, clothing, skin disorders so have to sit and sleep in filth, oh but that wont matter aas they wont haave meals prepared or food in the house.
The hours offered will not cover these items and will cost pensioners a significant part of their pension.
Wht do you accept the ridiculous notion that these are non care issues?
They are discrimanatory on thee basis of disability although the assessment process should mean that those who need assistance with these activities of daily living are prioritised over those who can manage self care.
I wonder how many people providing comment on the proposed changes actually have grandparents or parents needing assistance!
I have been disabled for 70 years after Polio in 1954. I have worked through my life, raised 3 sons and no we am my husband’s carer.
So I speak with personal knowledge of the issues confronting myself as I lose more function with age.
I would appreciate your response to my question, how will people like me keep living with so little support? Or should we just drop of our collective perches?
Kind regards
Margaret.
Thank you John Readman.
What a well thought out letter.’
I wonder if u have had an answer.?
From any minister?
It’s nearly a year on from your correspondence.
Has any clarity been proposed or change for betterment been legislated ?
Is anyone the wiser?
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