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, putting 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, with quarterly budgets covering three categories: clinical care such as nursing and physiotherapy, independence support such as help with showering and medication, and everyday living tasks like cleaning and meal preparation. Importantly, the government funds 100% of clinical care services, with individual contributions only applying to independence and everyday living costs.[1]
Residential care
For those who move into residential aged care, the fee structure also changed significantly from 1 November 2025. New contributions introduced 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, and CPI indexation of Daily Accommodation Payments (DAP) for new residents[2].
Accommodation payments remain one of the most consequential decisions. The national median RAD is approximately $400,000 in 2026, with metropolitan facilities often ranging 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[3].
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, its full value is excluded from the aged care means assessment entirely. If the home is vacated and no protected person is present, only a capped value is assessed, currently $201,231.20 as at March 2026[4].
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, the decision to retain or sell is driven by cash flow or other needs rather than the means test alone.
How a financial planner adds value
Aged care financial advice is genuinely specialised. The interaction between accommodation payments, the Age Pension assets and income tests, ongoing care fees, and estate planning is complex, and the decisions made at entry can be difficult or impossible to reverse.
A financial planner with aged care expertise can 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, and help you understand the full cost picture before any agreements are signed.
My Aged Care itself recommends seeking financial advice before making decisions under the new arrangements, noting that once changes are made, they cannot be reversed.
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.
The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
[1] Support at Home program | My Aged Care
[2] Daily accommodation payment (DAP) indexation | Australian Government Department of Health, Disability and Ageing
[3] Understanding aged care home accommodation costs | My Aged Care
[4] Means assessments for residential aged care | My Aged Care
