Aged care made simple: what you need to know 

Navigating aged care can be quite a challenge, especially with the new rules that come into effect on November 1, 2025. If you were already in the system before entering care, you might still be eligible for the old rules to continue. 

It sounds complex because it is, but don’t worry, advisers can help you navigate the system. Before seeking any advice, here are some basic considerations you need to cover: 

What are you trying to achieve through the aged care you are seeking? 

• Is the primary aim to give the person entering a facility their best future life? 

• Is it to preserve assets while also securing retirement options? 

• Or is it exploring all options and providing the family with the best financial outcome possible for all? 

Whether it’s a retirement village, apartment or care facility, moving out of an independent living arrangement comes with a cost. 

Retirement village costs 

For a retirement village, which provides accommodation in property where people just need to meet the age requirements (ranging from over 55 to over 70), the costs include the cost of the unit plus maintenance costs. When leaving the unit, a percentage each year or up to around 30 per cent is retained by the management – essentially the cost of the lifestyle provided. This may include a pool, entertainment areas, cafes/restaurants and exercise facilities. 

Aged care facility costs 

For an aged care facility, it may be just part of their pension or a number of daily fees set by the government, the care provider and potentially more if means tested. 

It’s important to realise that while aged care can seem expensive with accommodation fees plus additional fees (depending on Centrelink assessments), the money paid is providing a lifestyle – accommodation, food and care. 

Refundable Accommodation Deposit (RAD) 

For most people entering care, there is a refundable accommodation deposit (RAD) to be paid. This is the cost of the room and most of it is refunded on departure. The cost ranges from around $650,000 upwards. Many people may need to sell the family home to afford this but there are options for how it is paid. For example, you don’t need to pay it all upfront. There are ways to pay part of it and a higher daily cost or pay none of it and have an even higher daily cost. There are sound financial reasons why someone might want to delay these costs. In the new rules from November 1, a small percentage of RAD will be retained after the resident leaves the facility. 

Seeking financial advice 

A financial adviser can help with the complexity of aged care funding, helping people understand their financial obligations and how to manage their funds to ensure there’s income to support their needs and cashflow for the future. This may include selling the family home or keeping it and establishing funding from elsewhere. 

There is an aged care speciality accreditation which many financial advisers now hold.  

Source: Money and Life