Aged Care Fee Reforms – Your Pre-1 July Checklist

Australia’s aged care landscape is on the brink of further significant change with aged care fee reforms set to take effect from 1 July 2025. Older Australians and their families need to be well informed and proactive – fortune favours the prepared mind. These reforms, introduced through the Aged Care Bill and influenced by recommendations from the Royal Commission into Aged Care and the Aged Care Taskforce, are designed to create a more sustainable system as our population ages. The new fee structure will significantly impact the cost of care, making it crucial to get organised now. Let’s review what the aged care fee reforms entail and get into our pre-1 July checklist to help you prepare for the aged care fee reforms.

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On 6 March 2025, we hosted webinar on this very topic! For a detailed, comprehensive look at the upcoming changes, your options for aged care, and much more, you can view the webinar recording for free right here.

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Recap: Upcoming Aged Care Fee Reforms

The forthcoming aged care fee reforms will overhaul the financial framework for accessing both residential and home care services. Key changes include:

• Residential Care: An increased cap on approved accommodation prices; Changes to Refundable Accommodation Deposits (RADs) with a new retention fee over the first five years; A revised three-part fee model for daily fees that balances everyday living expenses, fully government-funded clinical care, and means-tested non-clinical care contributions.
• Home Care: The introduction of the new Support at Home programme, which categorises services into clinical care, independence support, and everyday living costs; Adjusted contribution rates for different funding groups, with a lifetime cap on fees.

These reforms will affect many Australians, meaning that those entering care after 1 July 2025 could face considerably higher out-of-pocket costs. Understanding these changes is not only about knowing the numbers—it’s about ensuring that your future care needs and financial planning are robust and well-prepared. For a more detailed look at the reforms, check out our previous article on this topic.

Your Pre-1 July Checklist

To help you navigate the Aged Care Fee Reforms, here’s a checklist with all key areas you should consider addressing before 1 July 2025:

1. Organise Key Documentation & Legal Arrangements

Review and update your important documentation to ensure that your wishes are clearly recorded and legally enforceable:

• Wills: Ensure your will is current and reflects your current assets and relationships. Update it to account for any recent changes in your financial or personal circumstances.
• Advanced Care Directives: Confirm that your advanced care directive is up to date, clearly outlining your healthcare preferences and appointing a substitute decision maker. Share copies with your family, healthcare providers, and your designated hospital.
• Enduring Power of Attorney (EPA): Verify that your enduring power of attorney is in place and that your chosen attorney fully understands your values, goals, and preferences. Revise the document if needed to ensure it aligns with the new aged care framework.
• Other Documentation: Gather medical records, insurance policies, and any other pertinent documents into one accessible location for easy reference.

2. Review Your Financial Plan

• Reassess Your Budget: Analyse your current financial situation with a professional adviser to determine how the new fee structures might impact you.
• Investment and Savings: Consider whether your current investments and savings are aligned with the potential increase in aged care costs.
• Funding Options: Explore the pros and cons of various funding methods such as RADs versus daily payments.

3. Update Health Insurance and Care Coverage

• Policy Review: Check that your health insurance and any supplementary care coverages are current and will continue to meet your needs.
• Adjust Coverage if Necessary: Consult with your provider to understand how the reforms might affect your coverage and whether adjustments are needed.

4. Research Aged Care Providers

• Compile a List: Research potential aged care providers and review their service offerings and fee structures.
• Facility Visits: Consider visiting facilities or reading reviews and testimonials to gauge the quality of care provided.

5. Confirm Emergency and Contact Details

• Update Your Contacts: Ensure that your substitute decision maker, family members, and healthcare providers have your most recent contact details.
• Communicate Your Preferences: Make sure everyone involved in your care is aware of your updated documentation and care preferences.

6. Stay Updated on Legislative Changes

• Subscribe for Updates: Follow reputable government and industry sources for the latest updates on the aged care fee reforms. Also keep an eye on our website and socials.
• Regular Reviews: Set reminders to review any changes that may affect your planning as the legislation progresses towards full implementation.

7. Plan Family Discussions

• Hold Family Meetings: Organise discussions with family members to ensure everyone understands your care preferences and the necessary legal and financial preparations.
• Align Expectations: Clarify roles and responsibilities in your future care planning to avoid any misunderstandings later.

8. Identifying Your Care Requirements

• Evaluate Your Options: Decide whether residential care or home care better aligns with your health, lifestyle, and financial situation.
• Understand the Fee Structure: Familiarise yourself with how the new fees will be applied to your chosen care option.
• Plan for Financial Impact: Ensure you understand how these changes will affect your overall cost of care.

9. Lifestyle Preferences

• Determine Your Ideal Setting: Consider where you want to live, whether that’s in a residential facility with community activities or a home care arrangement that allows you to remain in your own home.
• Assess Amenities and Services: List your non-negotiables in terms of facilities, social activities, and care services.
• Plan for Future Needs: Factor in potential changes in your health and mobility, ensuring your care option remains suitable over time.

10. Seeking Professional Advice

• Engage with Specialists: Consult with an aged care financial adviser, such as the team at Priority Advisory Group, to tailor a strategy that meets your needs.
• Analyse Your Options: Get expert guidance on managing RADs, Daily Accommodation Payments, and other fee components under the new framework.
• Plan for the Long Term: Ensure your financial and legal arrangements are robust enough to secure your future care, whether you enter aged care before or after 1 July 2025.

Aged Care Fee Reforms: What Now?

The upcoming aged care fee reforms represent a substantial shift in how care services are funded in Australia. With many Australians likely to face increased costs, it is essential to be proactive and prepared. By organising your legal and key documentation, reassessing your financial plan, updating your insurance, researching care providers, and having open discussions with your family, you can confidently navigate the changing aged care landscape. Most importantly, seeking professional advice from experts like Priority Advisory Group’s Aged Care Financial Advice team can help ensure your plans are robust and tailored to your unique needs. For personalised support or further information, please call Priority Advisory Group on 1300 349 188 or visit our contact page.