Planning for aged care is deeply personal — and without the right information, it can easily become overwhelming. With Australia’s aged care system set for major reform from 1 July 2025, now’s the time to understand what’s changing, how it may affect you or your family, and what support is available.

At IAS, we recently attended an Aged Care Masterclass by the Financial Advice Association Australia (FAAA) to stay across the latest updates. While we don’t currently offer aged care advice, we’re here to help you feel informed — and connected to trusted professionals when more specialised guidance is needed.

🏠Home Care: A Whole New Structure

The Support at Home program will replace the existing Home Care Packages, offering a more streamlined, transparent system.

Key features include:

  • Eight levels of care, replacing the current four-tier system
  • Quarterly “use-it-or-lose-it” budgets – unspent funds will expire each quarter
  • Admin fees capped at 10%
  • Means-tested client contributions
  • Price regulation to begin from July 2026

These changes are designed to create more flexibility and accountability but also place more responsibility on individuals to manage their care plans and funding closely.

👉 For many families, this will mean engaging earlier, budgeting more actively, and considering how care needs may evolve over time.

🛏️Residential Care: New Fees & Flexibility

Residential aged care is also undergoing significant structural change:

  • No more “28-day rule” to decide between RAD (Refundable Accommodation Deposit) or DAP (Daily Accommodation Payment)
  • Means-tested fees will be replaced with:
    • Hotel-style Contribution
    • Non-Clinical Care Contribution
  • Lifetime contribution caps will apply only for the first 4 years
  • Extra services moved to Higher Everyday Living Agreements

While this simplifies the system, residential care remains a major financial decision—particularly if property or superannuation comes into play.

For High Net Wealth Families: More Complexity

For clients with family trusts, investment properties, large super balances or companies, the aged care funding conversation becomes much more nuanced.

Here’s what we learned:

  • Those above means thresholds will face higher fees
  • Cashflow planning becomes critical
  • The removal of the annual cap simplifies paperwork, but makes long-term planning more important
  • Strong structuring and timing still matter when deciding between RAD and DAP

We recommend that clients in this position work with a team of advisers—including accountants and aged care specialists—to find the right balance between care and financial security.

💬Why It’s Time to Talk

One of the strongest themes from the Masterclass was the need to start aged care conversations early. These decisions are emotional, complex, and often delayed until a health crisis forces action.

At IAS, we believe in making space for open, informed discussions that respect your family’s values and plans. We’re here to support you with clarity, care and the right connections.

📘Helpful Resources

Even if you’re not ready to make decisions yet, it helps to have a starting point. If you or your family are beginning to think about care options, get in touch. We’re here when you’re ready.

Talk to us today about how IAS can help you navigate the future with confidence. Call us anytime on (02) 8268 2900 for an obligation-free chat.

Disclaimer: The information contained in this article is general in nature and does not consider your personal objectives, financial situation or needs. Please consider whether the information is appropriate to your circumstance before acting on it and, where appropriate, seek professional advice.