Ageing and aged care in Australia

07 Dec 2018

By Shadforth Financial Group

The number of people aged 65 and over in Australia is projected to more than double, to 8.8 million over the next 40 years1. This will undoubtedly increase the need for aged care in the community and put pressure on families and Government funding.

In Australia, the Government subsidises different types of aged care services to cater for older peoples’ needs and to support their carers — usually their family. This is a sensitive and complex area and for more and more Australians is a decision they will need to make for themselves or a family member in the future. It makes sense to understand the process and plan ahead to ensure your family members receive the care they need, when they need it.

Receiving help at home

Initially, for most people, receiving care at home is the most convenient and the least unsettling option. There are two levels of support.

1. Entry-level support: the Commonwealth Home Support Programme  

The Commonwealth Home Support Programme (CHSP) can provide ongoing or short-term care and support services including planned respite care to give your loved one or their carer a break by providing help with housework, personal care, meals and food preparation, transport, shopping, health and social support.

To access the CHSP, the person requiring help needs to have a home support assessment completed by a local assessor from a Regional Assessment Service (RAS)2. The RAS assessor will work to develop a support plan that reflects the individual’s entry-level aged care needs, goals and preferences.


The Government subsidises a range of services to keep fees affordable. An income and assets assessment is not required to access these services. Your loved one will simply need to discuss and agree any fees with the service provider.

2. Complex support: the Home Care Packages Program  

When your loved one’s aged care needs increase, they can be reassessed to receive a Home Care Package to meet their specific care needs within the home.

An Aged Care Assessment Team (ACAT) will assess their Home Care Package needs. In Victoria, this is called Aged Care Assessment Services (ACAS). There are four levels of Home Care Packages to meet an individual’s care needs ranging from basic to high.


The Government provides a different subsidy amount for each level of Home Care Package. The cost of care depends on your loved one’s income level, including any Age Pension that they, and their partner, are receiving. This is called the Income-Tested Care Fee and it is capped at $14.96 per day for part pensioners and $29.92 per day for self-funded retirees.

On top of the Income-Tested Care Fee, there is a basic daily care fee of $10.43 regardless of income level.

There are currently more than 121,000 people in need of aged care who are waiting for suitable care. This includes over 40,000 people assessed as needing a higher level of care than they currently have3. The waiting time for a high-level care package is at least 12 months. It is important that you and your family are aware of these timeframes and plan ahead.

Receiving care in a residential aged care home

If your loved one can no longer live at home, there is the option to move into a residential aged care home. An aged care home provides accommodation and help with everyday tasks, personal care or 24-hour nursing care.

Care and services that are provided include:

  • hotel services such as bedding, cleaning, meals, social activities and help in emergencies
  • personal care such as assistance with eating, dressing, arranging access to health professionals and emotional support
  • complex care and services, such as nursing and therapy services.

The individual’s care needs will be assessed and approved by ACAT (ACAS in Victoria).

Finding a home

Each home is different, so visiting a selection of homes will help your loved one make a decision. They’ll be able to see what the accommodation is like and what types of care, services and activities they offer.

It generally takes a few weeks to receive the assessment results from ACAT and can take one to three months to find a suitable aged care home.


The Government pays for the bulk of aged care costs, however, residents are required to contribute to the cost of their care based on their financial situation. Their (and their partner’s) income and assets will be used to determine the fees that are applicable. The family home will not be included in the assessment if it is occupied by certain protected persons such as a spouse, a carer or close relative under certain circumstances.

Summary of fees

FeesServices coveredFunding/costs
Accommodation fee Covers the cost of accommodation in the home. Low means-tested residents will have their accommodation costs met in full or part by the Government.

High means-tested residents will need to pay the accommodation price agreed with the aged care home.
A basic daily fee Covers living costs such as meals, power and laundry. Currently $50.66 per day.
A means-tested care fee This is an additional contribution towards the cost of care if income and assets exceed certain thresholds. Based on assets and income levels. The means-tested care fee is currently capped at $27,232 per annum and is also subject to a life time cap of $65,358. These amounts are indexed on an annual basis.
Fees for extra  services Extra service fees may apply if a higher standard of accommodation with an extra service status is chosen. The services and fees vary from home to home and must be published.
Additional fees Depending on a resident’s assessed care needs, additional fees may need to be paid for some of the complex care services provided that are critical to the individual’s care needs. The additional fees can only be charged if the resident is receiving a direct benefit from the care or services the aged care home is providing that they are not required to provide by law.

Aged care can be complex and, like other financial decisions, it makes sense to understand the options available so you and your family can make suitable arrangements as well as good financial decisions.

If you or a loved one needs aged care, please contact us and we can help.

1 Australian Institute of Health and Welfare ‘Australia’s welfare 2017: in brief’ 19 October 2017.
2 The RAS does not operate in Victoria and Western Australia. The My Aged Care contact centre can assist you in these states to find assessors in their local area.
3 Australian Department of Health ‘Home care packages program data report’ September 2018.

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