Aged Care Reforms: What Is The Real Impact?
Big changes are coming to the Australian aged care sector from 1 November 2025. Whether you’re planning for yourself or helping a loved one, it’s important to understand how these reforms may affect your care options and finances.
Navigating aged care is never easy, and with major aged care reforms in Australia coming in November 2025, families must prepare for the financial and emotional impacts. The Accredited Aged Care Professionals at OzPlan Financial Services within MB+M help to break it down.
What is changing?
The upcoming reforms focus on improving aged care affordability and quality. Here’s what you need to know:
1. RADs won’t always be 100% refundable
If someone lives in residential aged care for more than 5 years, 10% of their RAD (Refundable Accommodation Deposit) may be retained. In other words, RAD will be retained at 2% per year (for a max of 5 years). This is a major shift from the current fully refundable system.
2. Room prices will be capped at $750,000
A national limit aims to improve fairness and stop inflated pricing. However, some premium rooms may still come at a higher cost depending on provider + location – for example, metro facilities. Providers can increase room price, they just need government approval.
3. Daily ‘rent’ payments (DAP) will rise over time
If you pay a Daily Accommodation Payment, this will now increase in line with inflation (CPI).
4. A new ‘Support at Home’ system is coming
Replacing current Home Care Packages, this new model offers more funding levels, simpler access, and support like cleaning, gardening, equipment, and home modifications — helping more people stay at home longer.
How might this affect me?
If you’re entering aged care after November 2025, you could face higher long-term accommodation costs if staying over 5 years.
Paying a daily fee instead of a lump sum? That amount may now increase yearly.
Owning a home? The way it’s counted in fee assessments could affect your ability to afford preferred accommodation.
Another key point, if you’re hoping to stay at home longer, the new support system may offer more tailored help — but you’ll need to apply through a new process.
What can I do now?
The best thing you can do is start planning early. The sooner you understand your options, the more control you have! This includes reviewing your finances and assets. Having a clear understanding going into aged care discussions makes everything easier.
Additionally, getting personalised advice is crucial. Your situation is unique and deserving of individual advice that meets your needs. This includes circumstances about your family home, payment strategies, care required, provider choice, and more.
Lastly, carefully choosing the right provider as costs and inclusions can vary significantly. If you are already in care, ask about ‘grandfathering’ and whether the changes will apply to you.
Need help navigating aged care?
The aged care system can be complex, but you don’t have to do it alone. At MB+M, our experienced advisors can help you understand the rules, explore your options, and structure your finances to protect your assets and reduce stress.
If you’re interested in booking an appointment, your first consultation is free, call us on (03) 5831 1233.
Read more of our articles about aged care and retirement here: Are you ready for Aged Care, Australian guide to concession cards, How do I fund the later years of retirement?
You can find out more information about aged care in Australia at My Aged Care.
Published June 2025
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