From 1 January 2025, the maximum amount aged care providers can charge for accommodation — without needing special approval — will jump from $550,000 to $750,000. It’s the largest increase in more than a decade, and it’s already stirring fresh worries about how older Australians will manage the rising cost of care.
The federal government says the change will help homes fund modern facilities and keep up with growing demand. However, for many older people and their families, it means facing even larger lump-sum deposits at a time when the property market, which many rely on to fund care, remains uncertain.
At the centre of the change is the Refundable Accommodation Deposit (RAD) — often the biggest single payment an aged care resident or their family will ever make. The new cap represents a 36% jump in what providers can charge upfront, and that’s not the only shift.
From July 2025, providers will once again be allowed to keep 2% of the RAD each year for up to five years — a retention fee that hasn’t existed for over a decade. On top of that, Daily Accommodation Payments (DAPs) — for people who choose to pay as they go — will be indexed every six months to keep pace with inflation.
For older people living on a pension, and for families still recovering from cost-of-living pressures, the question is simple: Can we really afford this?
Advocates say the changes make clear, upfront information more important than ever.
“It’s not enough for providers to say, ‘This is the fee,’” one aged care advocate told HelloCare. “Families deserve plain-English explanations, fair comparisons, and enough time to make decisions. Too many people are still shocked by hidden costs or unclear refund rules.”
The government has kept in place a $130,000 lifetime cap on everyday living and independence service fees. But with higher accommodation costs on the table, many families fear the total price of residential care may push beyond what they’ve saved for.
For the sector, these changes are being framed as a chance to invest in quality and safety — but also as a test of trust. With the new Aged Care Act coming into force in July 2025, consumer rights will be front and centre. Providers will need to prove that every dollar charged is delivering comfort, security and dignity.
For older Australians, this means staying informed — and speaking up. “It’s your money, your home, your choice,” says one financial adviser. “Don’t be afraid to ask tough questions or get a second opinion. A good provider should welcome that.”
If you’re planning a move into aged care — or supporting someone who is — now is the time to understand how the new limits could affect you.
Talk to family, ask your provider for clear fee breakdowns, and don’t hesitate to get independent advice. The true cost of aged care goes beyond numbers — it’s about your peace of mind.
For information and free resources, visit My Aged Care.
