Big changes are coming to aged care from 1 November 2025, and they could directly impact your family’s financial planning. Whether you are helping a parent transition into residential care, exploring options for yourself, or preparing for the future, it is important to understand the new fee structure.
What is changing?
Under the current rules, some aged care residents pay an additional contribution called the Means Tested Care Fee (MTCF). This is calculated on a sliding scale based on income and assets, and it helps cover the cost of personal and clinical care.
From 1 November 2025, the MTCF will be abolished and replaced with two new contributions:
- Hotelling Supplement Contribution (HSC): covering everyday living expenses like meals, cleaning and utilities.
- Non-Clinical Care Contribution (NCCC): covering non-clinical services such as lifestyle activities, bathing and mobility assistance.
Both fees will have maximum daily caps, indexed twice a year. As of 20 September 2024, the caps were set at:
- $12.55 per day for the HSC
- $101.16 per day for the NCCC
There will also be a lifetime cap on NCCC payments, set at $130,000 (reached at around 3.5 to 4 years of care) or four years of contributions, whichever comes first.
Will you pay more?
It is expected that around half of new residents will pay more under the new structure. The exact impact will depend on each person’s income and assets, but for some families the changes could significantly increase aged care costs.
“The new fee system is designed to simplify aged care funding, but many families will face higher costs,” explains Heath Visser, Partner at Halpin Wealth.
“That is why planning ahead is so important. With the right structure, you can manage the changes without unnecessary financial stress.”
Who is exempt?
For those already in residential aged care by 31 October 2025, nothing changes. You will continue paying under the existing MTCF rules unless you choose to opt-in to the new system.
The same protection applies to anyone who:
- Was already approved, receiving, or waiting for a Home Care Package as of 12 September 2024, and
- Later enters residential aged care after 1 November 2025.
These residents will remain under the old fee structure unless they opt in.
For families currently considering aged care, this could be a key decision point. Entering the system before November may help lock in existing arrangements and potentially reduce long-term costs.
Changes to home care
The reforms also affect people receiving care at home. From 1 November 2025, the current Home Care Packages Program and Short-Term Restorative Care Programme will be replaced by a new Support at Home program.
Instead of today’s income test, personal contributions will be calculated using the existing Age Pension income and assets tests. For non-pensioners, Services Australia will require income and asset details. Otherwise, the maximum rates will apply.
“For many Australians, home care is the first step before considering residential care,” Heath states.
“The changes to the Support at Home program could result in higher contributions for some households if they do not provide accurate financial information to Services Australia. It is critical to stay on top of this.”
Why professional advice matters?
The complexity of aged care has always been a challenge, and these changes add another layer of decision-making. From the timing of when you enter care to the way you structure your income and assets, the choices you make can have a lasting financial impact.
At Halpin Wealth, we help families navigate these rules with confidence, from explaining how the reforms work to modelling what they could mean for your finances.
“Aged care decisions are not just about numbers,” Heath says.
“They are about making sure loved ones receive the care they need, while also protecting the family’s financial wellbeing. Our role is to guide clients through the details so they can focus on what matters most.”
Source: This article was originally published on Advisely with the title “Aged care costs are changing. Will it affect your family’s plans?” on 15 September 2025 and was informed by MyAgedCare, “Aged care reforms from November 2025. “
Planning ahead for aged care needs
If you or a loved one are considering aged care, now is the time to review your plans. With the new fee structure just months away, the right advice could make a meaningful difference to your family’s financial future.
Book a no-cost, no-obligation conversation today to better understand how the aged care reforms may affect you.
This information provided in this article is general advice only and has been prepared without taking into account your own objectives, financial situation or needs. Before making a financial decision based on this advice, you must consider whether it is appropriate in light of your own needs, objectives, and financial circumstances, and where relevant, obtain personal financial, taxation or legal advice. Where a financial product has been mentioned, you should obtain and read a copy of the Product Disclosure Statement (PDS) prior to making any decisions about whether to acquire a product.