Aged care is a sensitive topic that affects many of us as we grow older or look after aging family members. It’s something that becomes more real with time.
The Aged Care Bill 2024 has brought some big changes, and it’s important to know how it could affect you or someone you care about.
Here are six things you should know, explained in a more personal, relatable way:
1. The Costs Might Be Higher for Some People
One of the key changes in this bill is how aged care will be paid for. Basically, the government is introducing a new system that will ask some pensioners to pay more for their care, depending on their financial situation.
For those who don’t have a lot in savings or income, like full pensioners, the costs will stay about the same, though some may be asked to pay up to 17.5% of their everyday care expenses.
For people who are better off financially—those who’ve saved up or are self-funded retirees—they could be paying as much as 80%. It’s all about balancing things out so that those with more contribute more.
2. More Support to Stay at Home
One of the best parts of the new bill is the “Support at Home” program, set to roll out in 2025. For many older Australians, staying in their own homes as long as possible is a top priority. And let’s face it, who wouldn’t prefer that? Moving into aged care can be daunting, and being able to stay in a familiar space brings a sense of comfort.
The government has set aside $4.3 billion to make this happen. This money will help fund things like home modifications, quicker access to home care services, and essential equipment like walkers or wheelchairs. It’s designed to make aging at home easier, safer, and more comfortable.
[ Related Post: More Australian Seniors Choose to ‘Age in Place’ ]
3. Changes to Refundable Deposits in Aged Care
When you or a loved one enters residential aged care, a big upfront payment is often required—this is called the Refundable Accommodation Deposit (RAD). In the past, families got all of that money back once the person left care or passed away.
Under the new rules, aged care providers will now be able to keep up to 10% of that deposit, which could feel like a hit.
Providers say they need this to maintain their facilities, and while this might make financial sense for them, it’s important to be aware that it means you won’t get the full deposit back in the end. This is one of the changes that families will need to consider when making plans for the future.
4. Lifetime Cap on Costs
For those worrying about how much they might end up paying for aged care, the government has set a lifetime cap of $130,000. This cap applies whether you’re receiving care at home or in a residential facility.
This is a helpful safeguard, ensuring that no one pays an overwhelming amount over the course of their life for aged care.
Knowing that there’s a limit to how much you or your family will need to contribute can provide some peace of mind when planning for the future.
5. Why These Changes are Happening
You’ve probably heard people say that Australia has an aging population, and it’s true. With more people living longer, the demand for aged care is growing. In the next few decades, the number of Australians over 65 is expected to double, and those over 85 will triple.
Unfortunately, this increase in demand has put a financial strain on aged care providers. Nearly half of these providers are currently losing money when it comes to accommodation.
The government hopes that by asking those who can afford it to contribute more, and by allowing providers to keep part of the RAD, they can make the system more sustainable.
[ Related Post: Calls for Family Home to Be Included in the Age Pension Asset Test ]
6. What People are Saying
These changes have been a long time coming, and while many people in the aged care sector see them as necessary, there’s also been some pushback. Some are concerned about the fairness of asking certain pensioners to pay more.
Others, like aged care providers, are relieved that the government is finally taking action to address the financial struggles of the sector.
Advocacy groups for older Australians have welcomed the changes, but they’ve also said they’ll be keeping a close eye on how things play out. There’s always a concern that even well-intentioned reforms could have unexpected consequences, so there’s a need to watch carefully as the bill moves forward.
How a Reverse Mortgage Can Help Seniors Affected by the Aged Care Bill 2024
With the changes in the Aged Care Bill 2024, some seniors may find themselves needing to contribute more toward their care. For those on a fixed income or with limited savings, this could present a challenge. This is where a Reverse Mortgage can offer a helpful solution.
A Reverse Mortgage allows seniors to unlock the value of their home without needing to sell or move out. The funds can be used to cover the increased costs of aged care, whether that’s for residential care or the new home care program, Support at Home.
Unlike traditional loans, there are no ongoing repayments—the loan is repaid when the home is sold, usually after the homeowner passes away or moves into full-time care.
For seniors affected by the higher costs under the new means-testing system, a Reverse Mortgage can provide the financial flexibility needed to ensure they get the care they deserve, without the immediate financial pressure.
Want to learn more about Reverse Mortgage? Download your FREE Reverse Mortgage GUIDE.
Ready to Apply? You can now check your eligibility online or call Seniors First on 1300 745 745.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial advisor before you make any decision.