2025 Australian Nursing Home Costs and Care Options: A Comprehensive Guide

Understanding the Latest Aged Care Reforms Starting in 2025

The Australian Government has introduced a new Aged Care Act, with major reforms now scheduled to begin on 1 November 2025 (delayed from the original date of 1 July 2025). These changes are designed to streamline services, improve access, and strengthen person-centred care.

Key Changes Include:

• Grandfathering of current Home Care Package (HCP) recipients as of 12 September 2024 to ensure no disadvantage during transition.
• Consolidation of existing programs (CHSP, HCP, STRC) into a new Support at Home program.
• Introduction of a Single Assessment System to simplify eligibility processes for aged care services.

These reforms aim to offer greater clarity, flexibility, and support tailored to each individual’s needs.

Nursing Home Care and Home Support Options in 2025

Australia’s aged care system offers two primary streams:

Residential Aged Care (Nursing Homes)

Designed for older Australians who require 24/7 care, including clinical services, daily living assistance, and access to allied health professionals.

Support at Home Program

Offers coordinated care for those who wish to stay at home. Services are grouped into three categories:

• Clinical Care (fully funded): Includes nursing, physiotherapy, occupational therapy, and care coordination.
• Independence Services (moderate co-contributions): Personal care, respite, transport, mobility aids, social support.
• Everyday Living Needs (higher contributions): Housekeeping, gardening, home maintenance, meal prep, and shopping.

The program expands funding levels from 4 to 8 tiers, with annual budgets ranging from approx. AUD 11,000 to AUD 78,000, depending on assessed needs.

Breaking Down Nursing Home Costs in 2025

Costs vary based on multiple factors, including the level of care, income and assets, accommodation choices, and geographic location.

Core Fee Structure

• Basic Daily Fee: AUD 61.96 (payable by all residents).
• Accommodation Payments:
  • Refundable Accommodation Deposit (RAD): A lump sum, refunded upon departure (less any allowable deductions).
  • Daily Accommodation Payment (DAP): A daily rental-style payment if RAD isn’t paid.

Means-Tested Care Fees

Additional care fees are income- and asset-tested:

• Income-based fees: up to AUD 129.92/day
• Asset-based fees: up to AUD 300.81/day
• Capped at AUD 300.81/day in total

Estimated Cost Ranges

• Low-income residents: Daily costs can be as low as AUD 62
• High-income residents in premium facilities: Costs may exceed AUD 700/day
• Annual expenses range between AUD 22,615 to AUD 284,423

Accommodation Payments: RADs and DAPs

Starting 1 July 2025, important updates include:

• Providers may deduct up to 2% per year for 5 years (max 10%) from RADs for admin costs.
• DAPs will be indexed for inflation every six months.
• RADs are government-guaranteed, offering security for lump sum payments.
• Choosing between RAD vs. DAP affects financial planning, asset protection, and pension entitlements.

Support at Home Program: Funding and Eligibility

Eligibility is determined via the new Single Assessment System, replacing existing multiple assessments.

Key Details:

• Care management accounts for up to 10% of each home care budget.
• Services are tiered into 8 levels aligned with care complexity.
• Fees are means-tested and vary by service type (clinical, independence, everyday living).

Support services include clinical care, social engagement, personal assistance, and home modifications.

Planning and Managing Aged Care Costs

Effective financial planning is crucial. Consider beginning preparations 2–5 years in advance of aged care entry.

Financial Strategies:

• Evaluate RAD vs. DAP options based on liquidity and estate planning.
• Understand exemptions for the family home and granny flat arrangements.
• Be mindful of Centrelink gifting rules to avoid asset deprivation penalties.
• Engage accredited aged care financial advisers to navigate complex policies, taxation, and pension implications.

Insights on Choosing a Nursing Home Provider

While national review platforms are limited, families can still make informed choices:

• Research providers with strong reputations for care quality and compliance.
• Use government tools like the Aged Care Quality and Safety Commission to review reports and ratings.
• Catholic Healthcare, for example, is often cited for high satisfaction but should be considered alongside other providers.
• Seek firsthand feedback from residents and families whenever possible.

Summary: What Australian Families Should Know in 2025

• The new Aged Care Act and Support at Home Program launch on 1 November 2025, streamlining care access.
• Residential aged care costs depend on means testing, accommodation choices, and care needs.
• RADs and DAPs come with new rules—families must plan accordingly.
• Home care support is expanding, with 8 funding tiers and clearer cost structures.
• Early financial planning and expert advice are essential for optimizing funding and entitlements.
• Choosing a reputable provider with proven care standards ensures peace of mind.

Sources

• Catholic Healthcare - Support at Home Program
• Hudson Financial Planning - Aged Care Costs Australia 2025
• Retirement Essentials - Aged Care Fee Changes in 2025

This article reflects the most current aged care information for Australian families as at 2025 and should be paired with professional advice tailored to individual circumstances to ensure optimal care and financial outcomes.Disclaimer: All content, including text, graphics, images and information, contained on or available through this web site is for general information purposes only. The information and materials contained in these pages and the terms, conditions and descriptions that appear, are subject to change without notice.