What the New Aged Care Act Means for Older Australians (and Their Families)
Australia’s aged care system has been under pressure for years, and the Royal Commission made it clear: things had to change. The new Aged Care Act 2024, which officially started on 1 November 2025, is a major reset. It puts older people’s rights at the centre, focuses on safer and better-quality care, and introduces a fairer way to fund the system.
If you or a loved one is thinking about entering residential aged care (a nursing home), here’s what you need to know.
Big Picture: What’s Changed?
- Older Australians Now Have Stronger Rights – The Act includes a legal Statement of Rights, covering dignity, safety, respect, and choice. Providers must meet stricter quality standards and report more openly on safety and care.
- My Aged Care Is Easier to Use – Assessments are faster, more personalised, and better supported—especially for people with dementia, Indigenous Australians, or culturally diverse backgrounds.
- More Support to Stay at Home – A new Support at Home Program replaces Home Care Packages, with eight levels of support to help people stay independent for longer. Existing users are protected under a “no worse off” rule.
- Stronger Oversight – There are tougher penalties for poor care, faster complaint handling, and better protection from neglect or financial abuse.
The Funding Overhaul: Fairer + More Transparent
The old system was confusing and didn’t always match funding with people’s real needs. The new model uses the Australian National Aged Care Classification (AN-ACC), which means:
- Government covers ALL clinical care
Nursing, therapy and medical needs are fully funded. No more unexpected medical bills. - You still pay based on income and assets
Fees are means-tested, but the system is fairer for people with low or modest means. - Existing residents stay on their current arrangements
If you entered care before 31 October 2025, nothing changes for you.
Entering Residential Care After 1 November 2025
The steps remain the same:
- Call My Aged Care
- Get an assessment
- Choose a provider
- Sign an entry agreement
But the payment rules for new residents have changed.
Accommodation Payments: What’s New?
- RAD/DAP (Refundable Deposit or Daily Payment)
– You can still pay a lump sum (RAD) or a daily rate (DAP).
– Providers now keep 2% per year for up to 5 years (max 10%) to help fund upgrades and maintenance.
– The rest is refunded when you leave. - Rental-Style Payments
– Indexed twice a year
– No retention amounts
– If you have low means, the government still helps cover these costs.
Everyday Living Costs
- Basic Daily Fee
– Stays the same for everyone (~$65/day). - Means-Tested Care Fee
– Helps cover personal care and activities.
– Lifetime cap increased to $130,000. - New Hotelling Supplement
– Applies only to higher-means residents
– Pays for improved amenities
– Capped at ~$12.55/day - Optional Extras
– Things like upgraded meals or premium experiences
– Completely optional — can’t be forced
Why These Changes Matter
The new system is designed to:
- Give older Australians more choice
- Deliver safer, higher-quality care
- Reduce unexpected costs
- Support low-income seniors
- Make funding fair and sustainable
- Reduce pressure on aged care homes
- Help people stay at home longer if they want to
For more information contact My Aged Care (1800 200 422) myagedcare.gov.au or visit the official Australian Government Health website.