New Aged Care Fees Explained: What Changed in November 2025

The Aged Care Act 2025 came into effect on 1 November 2025 and brought the biggest overhaul of aged care fees in a decade. If you're entering care now, you're under the new system. If you were already in care before November 2025, different rules apply to you. Here's what changed and why it matters.

The big picture

The old system bundled fees in ways that made it hard to understand what you were actually paying for. The new system:

1. Separates accommodation, daily living, and care into distinct charges
2. Introduces a lifetime cap so fees can't grow forever
3. Fully funds clinical care for people staying at home
4. Expands the means test sophistication with more gradations

If you're entering care for the first time after 1 November 2025, these new rules apply automatically.

What changed in residential aged care

Old system (before November 2025)

• Basic Daily Fee (85% of pension)
• Means-Tested Care Fee (complex calculation, annual cap $35,910, lifetime cap $86,185)
• Accommodation payment (RAD/DAP)
• Extra/additional services fee

New system (from November 2025)

• Basic Daily Fee (unchanged: ≈$66.80/day)
• Hotelling Contribution (new: up to $22.15/day, no cap)
• Non-Clinical Care Contribution (new: up to $105.30/day, lifetime cap $135,318.69 or 4 years)
• Accommodation (RAD/DAP, similar to before)
• Higher Everyday Living Fee (replaces "extra services", optional premium services)

What this means for you

For most new residents, total fees are similar to before but structured differently. The big winners are:

• People who spend many years in care. The lifetime cap protects you from unbounded fees.
• Low-means residents. Accommodation is now more consistently covered by government supplement.
• Self-funded retirees with complex needs. Separated fees mean clearer cost tracking.

The losers:

• People with moderate assets. The hotelling contribution has no cap, so long stays can cost more.
• People previously on the old caps. They lose the $86k lifetime protection (unless grandfathered).

What changed in home care

The biggest structural change was in home care.

Old: Home Care Packages

• 4 levels (Level 1-4)
• Annual budgets from ≈$10,931 to ≈$63,758
• Bundled funding, with the provider choosing how to allocate
• You paid an income-tested care fee

New: Support at Home

• 8 classification levels (finer-grained needs matching)
• Annual budgets up to $78,106
• Three service categories with different contribution rules:
  • Clinical care, 100% government funded
  • Independence support, 5-18% your contribution
  • Everyday living, 17.5-80% your contribution
• Quarterly budget reviews

What this means for you

For most Support at Home users, this is a better deal than the old system:

• Clinical care is now free, a significant saving if you need nursing or physiotherapy
• More classification levels mean better matching to your actual needs
• Quarterly budget reviews let funding adjust as your needs change

The new lifetime cap

This is probably the most important new protection. Under the old system, there was an $86,185 lifetime cap on the old Means-Tested Care Fee. The new cap is:

$135,318.69 OR 4 years of contributions, whichever comes first.

Once you hit the cap, your non-clinical care contribution (the big means-tested fee) drops to zero. You still pay the basic daily fee and any accommodation, but the most expensive means-tested component stops.

Importantly, the cap is shared across residential care and Support at Home. So if you use Support at Home for 3 years then move into residential care, your cumulative contributions from both count toward the single cap.

What if you were already in care before November 2025?

If you entered care before 1 November 2025, you're grandfathered under the old rules for as long as you stay in that care. You keep the old fee structure and caps.

If you move to a new facility after November 2025, you may transition to the new system. Check with your provider and Services Australia before making any moves.

Accommodation supplement: the hidden safety net

Under the new system, the government's accommodation supplement is more visible and better targeted. If your:

• Annual assessable income is below $34,762, AND
• Assessable assets are below $63,000

...then the government covers your accommodation costs entirely. You don't pay a RAD or DAP. This is a massive protection for low-means residents that many people don't realise exists.

Frequently asked questions

I'm in care under the old system. Will anything change for me?

Generally no. You keep the old rules for as long as you stay where you are. But the old caps apply, and the grandfathered Basic Daily Fee rules (for very long-term residents) continue.

What if I was getting a Home Care Package?

Your package was transitioned to Support at Home on 1 November 2025. Your budget and services should have continued without a break.

Is the lifetime cap indexed?

Yes, it's indexed twice a year (March and September) in line with the CPI.

Can I still pay for extras?

Yes. The new "Higher Everyday Living Fee" replaces the old "extra services" fees. It's optional and covers things like premium meals, better amenities, and enhanced activities. Facilities can't require you to pay it as a condition of entry.

The bottom line

The new system is fairer and more transparent than the old one, with better protections for long-term residents and full clinical care coverage for home care users. The biggest things to take away:

1. The lifetime cap is your friend. $135k or 4 years, then non-clinical contributions stop.
2. Home care got a big upgrade. Clinical care is now free, and there are 8 levels instead of 4.
3. Residential care is structured differently but total costs are similar for most people.
4. Low-means residents are better protected via the accommodation supplement.

Want to see what you'd actually pay under the new rules? Run your situation through our calculator. It's already configured for the 2025 system.