Understanding your aged care options before you need them

Aged care is one of those conversations most families avoid until they can’t. A parent has a fall, a diagnosis changes everything, and suddenly, you’re left having to make significant financial decisions during a very emotional time.

The families who navigate this best are the ones who planned before they needed to. Here’s what that can look like in practice.

Home care

For older Australians who want to remain at home, the landscape changed considerably in late 2025. From 1 November 2025, the new Support at Home program replaced the Home Care Packages Program under the new Aged Care Act. This change put the rights of older people at the centre of how care is delivered.

Support at Home expanded from four funding levels to eight classifications, ranging from $11,000 to $78,000 per year. Quarterly budgets now cover three categories:

• Clinical care, such as nursing and physiotherapy
• Independence support, such as help with showering and medication
• Everyday living tasks, like cleaning and meal preparation

Importantly, the government funds 100% of clinical care services. Individual contributions only apply to independence and everyday living costs.

Residential care

For those who move into residential aged care, the fee structure also changed significantly from 1 November 2025. New contributions now include:

• A Non-Clinical Care Contribution with a lifetime cap of $135,319
• A 2% annual retention on Refundable Accommodation Deposits (RAD) for up to five years
• CPI indexation of Daily Accommodation Payments (DAP) for new residents

Accommodation payments remain one of the most consequential decisions. The national median RAD is approximately $400,000 in 2026. Metropolitan facilities often range from $350,000 to $550,000. Residents can pay via a lump sum RAD, a daily DAP, or a combination of both, and the right choice depends entirely on individual circumstances.

Protecting the family home

This is the question I hear often, and the answer is reassuring: there is no requirement to sell your home. If a protected person, such as a spouse or an eligible dependent, remains living there, the aged care means assessment excludes its full value entirely. If the home is vacated and no protected person is present, the assessment only counts a capped value, currently $201,231.20 as at March 2026.

For many aged care clients, the family home is the most significant asset, and it continues to play a central role in funding discussions. Often, cash flow or other needs drive the decision to retain or sell, rather than the means test alone.

How a financial planner adds value

Aged care financial advice is genuinely specialised. Accommodation payments, the Age Pension assets and income tests, ongoing care fees, and estate planning all interact in complex ways, and the decisions you make at entry can be difficult or impossible to reverse.

A financial planner with aged care expertise can help you:

• Model the RAD versus DAP trade-off for your specific assets and income
• Assess the impact on your Age Pension entitlements
• Advise on whether retaining or selling the family home is the right strategy
• Understand the full cost picture before you sign any agreements

My Aged Care itself recommends seeking financial advice before making decisions under the new arrangements. Once you make changes, you cannot reverse them.

Planning before a crisis means you get to make thoughtful decisions rather than urgent ones. Ask us today how we can help you start planning.