From the 1st of November, Australia’s aged care system will undergo its biggest transformation in years. The changes are designed to improve the standard of care for residents and provide greater choice for families. They also aim to help providers manage the growing cost of delivering services.

The reforms aim to create a fairer and more transparent system that better supports older Australians to live with dignity — whether at home or in residential care.

So, what are some of the changes?

New pricing structures

Home care providers will set their own fees for things like gardening and showers. An independent pricing authority will recommend a price cap at some stage next year. Until then, the government says it expects providers to set fees at a reasonable price.

New Support At Home program

Home Care Packages (HCP) will move to Support at Home from November 1. The Commonwealth Home Support Program (CHSP) will move across some time after July 1, 2027.

Those needing home care, who are not already in the system, should apply for an assessment via the My Aged Care website.

The previous home care packages offered four levels of support with a maximum funding per person of $61,440.

The new Support At Home system will feature eight levels. It will also include two short-term pathways, for restorative care and end-of-life. The government hopes these will help keep more people at home, instead of going into residential care or hospital.

Under the new system, the top level package will come in at around $78,000 a year, subject to indexation.

Lifetime cap

Older people will not be expected to pay more than $130,000 over their lifetime for at home and residential care services.

New charge

A new Hotelling Supplement will applicable only to those coming into the system from November 1 – existing residents excluded. It will mean those deemed able to pay more towards these daily living costs will have to contribute more. Early indications are that residents will not be able to be charged more than $22.12 a day. However, the final figure will be determined by indexation.

Services Australia decides the contribution amount for each resident.

Extra fees

Other optional costs may apply for extra services, such as pay TV, alcohol or upgraded meal options. Under the new Aged Care Act, providers must clearly explain what is included in the basic daily fee and what is considered an extra or higher-level everyday living service before a person moves into a facility. No one can be required to agree to or pay for these extras before entering care.

The big change for residential aged care

From 1 November 2025, aged care providers will be able to charge up to $750,000 for a room or bed in residential care without government approval.

Homes can still charge more than that — in some cases up to $2 million — but they must first seek approval from the Department of Health and Aged Care.

While the family home isn’t counted when the government calculates aged care fees, many people still choose to sell their home to fund their accommodation. The proceeds are often used to pay a Refundable Accommodation Deposit (RAD) — a lump-sum payment that secures their place in care and is refunded when they leave.

These reforms represent the most significant overhaul of Australia’s aged care system in decades. They aim to make care more sustainable, transparent and responsive to the needs of older Australians. As the sector evolves, new roles and opportunities are also emerging across residential and home care — from nursing and personal support to management and administration.

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Article References

Cross, J (20 October 2025) ‘Revealed: How much you’ll pay under Australia’s biggest aged care shake-up’, ABC News Australia, accessed 23 October 2025.