How long could you contribute 20% of your income to pay for support at home? Complex health conditions prevent most home support recipients from working or managing tasks they once could.
The average household income is $120,660, but pensioners and young people often survive on less than $30,000 annually. Many self-funded retirees are now living near or below the poverty line due to shrinking dividends and dwindling savings.
The single aged pension, with supplements, is $29,874; for couples, it’s $39,639.60. Neither Labor nor the LNP views the 4.2 million people over 65 as electorally significant. Cost-of-living is the top vote-swinger, while aged care ranks low at 14th or 15th.
Younger voters, grappling with housing costs, are shocked to learn their parents’ savings are being drained. Inheritance, pensions, and taxpayer billions prop up the $36.2 billion 2025–26 budget for privatised aged care.
As one hopeful homeowner said, “It’s disgusting that we’re waiting for our parents to die.”
New entrants to the Support at Home program will pay contributions upwards of 20% of their deemed income. Pensioners with complex needs may be forced into residential care, where Residential Accommodation Deposits often exceed $750,000.
Professor Eager notes self-funded retirees typically pay $127,000 annually for residential care, with half covering daily accommodation.
There are about 190,000 residential beds. My analysis of KPMG’s 2024 Aged Care Market Analysis and Gen Data suggests over 70,000 people die annually in aged care facilities – a high renewal rate for investors, with a 16% growth in for-profit operational places in 2022–2023.
Around 200,000 people live in retirement villages, and over 100,000 older Australians pay $300–$350 weekly for caravans or cabins marketed as aged care community living. There are 270,000 home care packages and 816,000 registrations for the Commonwealth Home Support Program.
The government has committed $1.8 billion extra for public hospitals and health services in 2025–26, benefiting all ages with better GP access. However, older people with frailty or severe conditions face high risks from procedures requiring anaesthesia and extensive post-operative physio.
The new Support at Home program emphasises reablement. For those with disabilities or complex health, maintaining independence should be its core principle. Home care packages worked until restrictive exclusions led to unspent funds.
The 2021 Aged Care Royal Commission reported $2 billion in management fees and $2 billion in unspent funds. Stewart Brown’s 2024 Financial Performance Survey found $4.1 billion in unutilised funds across the sector.
The new Support at Home program offers eight funding classifications, from $11,000 to $78,000. Unlike current packages, these are capped, not targeted amounts. I expect this will save over $3 million for the public purse.
THE BOOMERS ARE COMING – BOOM, BOOM, SCATTER GUN ALL BOOMERS SHOT
The June 2023 Taskforce, chaired by Minister Wells, rejected the 2021 Aged Care Royal Commission’s recommendation against taxing frailty. In February 2023, Kantar Public began researching consumer contributions to aged care (Aus Tender CN3947286, $396,000).
Kantar, an international market research firm, has secured 67 government contracts worth $29,608,407.55 since 2015.
Kantar’s homepage boasts:
“Shape your brand future. From brand strategy to sales performance, we blend expertise, advanced analytics, products, and platforms to understand how people think and act.”
Why is a marketing firm involved in aged care? Likely to sell an ideology.
Kantar surveyed 1,084 people over 40 via telephone and scripted interviews (e.g., 232 in Sydney, 218 in Melbourne, 11 in Hobart, 5 in NT). Key insights raise doubts about respondents’ understanding and support for a user-pays system:
Only 9% felt confident in understanding proposed changes.
A user-pays system was preferred by nearly three-quarters of cohorts, except part-pensioners in government housing.
Respondents were willing to pay $58.08 daily ($21,119.20 yearly) for a shared-facility room or $77.15 daily ($28,159.75 yearly) for an ensuite room with a living area.
The 2024 Aged Care Taskforce report mentions “co-contribution” 59 times, reframing this tax on frailty. Expecting pensioners and low-income individuals to pay is incomprehensible given their complex health and poverty. The taskforce noted only 12% of care recipients pay an income-tested fee, meaning 88% lack the financial capacity.
Those receiving home care packages on 12 September 2024 will be “grandfathered” under existing financial arrangements. New entrants post-12 September will face individual contributions.
The failure of outsourced policy and the taskforce is evident in the 3 April 2025 webinar, which used case studies to illustrate contributions. Support at Home, starting 1 July 2025, includes three service types:
Clinical care – zero contribution.
Independence – contributions for services to maintain independence.
Everyday living – contributions for services typically paid lifelong.
Contributions are based on the age pension means-test. I applied a $100 hourly rate from indicative Support at Home prices for case studies, assuming 12 hours of independence and everyday living services for someone with disability and complex needs. Services include three weekly showers, cleaning, laundry, meal prep, Meals on Wheels, shopping, social support, gardening, and medical transport.
Case Study 1: Muhammed, Single Part-Pensioner (Grandfathered)
Muhammed’s income is $40,000, including $25,260 pension. He owns his home and has $100,000 in non-financial assets. Approved for a home care package by 12 September 2024, his contribution rates from 1 July 2025 are:
0% for clinical services.
2.5% for independence services.
2.5% for everyday living services.
12hrs x $100 = $1,200 @ 2.5% = $30 weekly ($1,560 p.a., 3.9% of $40,000). Muhammed pays $30 weekly. Grandfathered arrangements may work, but grandfathers pass on.
Case Study 2: Sue, Single Part-Pensioner (New Entrant)
Sue’s income is $40,000, including $25,260 pension. She owns her home and has $100,000 in assets. Approved for home care in March 2025, her contribution rates from 1 July 2025 are:
0% for clinical services.
9.4% for independence services.
23.7% for everyday living services.
Independence: 6hrs x $100 = $600 @ 9.4% = $56.40 weekly ($2,932.80 p.a.).
Everyday living: 6hrs x $100 = $600 @ 23.7% = $142.20 weekly ($7,394.40 p.a.).
Sue pays $198.60 weekly ($10,327.20 p.a., 25.8% of $40,000).
Muhammed might cope with $30 weekly, but Sue cannot afford $198.60. To stay home, she’d need to cut meal delivery, cleaning, gardening, showers, transport, and social support.
The contribution system fails the taskforce’s objectives:
A robust safety net recognising financial capacity.
Simple, efficient, and understandable arrangements.
Support at Home must live up to its name. Both Labor and the LNP are accountable for outsourcing policy to spin doctors, sidelining public servants and ministers. This disaster must be stopped to avoid destituting the most vulnerable.
Recommendations:
The incoming government must not approve the new Aged Care rules as they stand.
Delay Support at Home from 1 July 2025 to 1 July 2026, as systems, providers, and the department are unprepared.
Listen to care recipients and providers, not just paid advocates.
Like NSW, limit individual contractors replacing public servants.
Clear waiting lists by expanding care under the current system.
Retain the existing income-tested fee methodology.
Clarify funding for the Commonwealth Support Program for lower needs.
Apologise!
I think I’ll have to hang myself.
I would like to see the figures for people with low assets i think u are scaremongering i believe people with a basic pension and no assets other than their home are not paying
I totally agree with Peter’s recommendations. The Department of Health and Aged Care is not up to speed and that was so obvious to see at a recent conference held by the Aged Care Quality and Safety Commission where they used the excuse that they were in ‘caretaker mode’ because of the upcoming election, and therefore could not give answers to the many questions that were put forward by those attending.
If only someone could get the message out to the Baby Boomer Generation that they will not be able to access the care that they will need going forward, and that both Labor and Liberal governments over decades have allowed the aged care system to get to this point. The system is broken now – not enough residential aged beds in the system now, demand for beds is outstripping the available supply – the wait for funding of a Home Care Package is now more than 12 months – hardly any new residential beds are being built because the cost of construction has doubled over the past 5 years, and banks are not loaning because the return on investment is practically zero. This year around 21,000 Australians turn 85, in just over 6 years this figure becomes 62,000 per year, yes, the first of the Baby Boomers. It takes at least 5 years to build a Residential Aged Care Facility……demand outstrips supply of beds now so this situation is just going to get worse not better. Home care will be the only solution and the government is still pushing forward with this disaster called Support at Home. They should apologise and get back to the drawing board.
This article hits most of the important points, but it has not included the rediculousnesss of how we can spend any of our HCP to buy equipment. All larger pieces have to be approved by an O.T who charge approx, $200 an hour to assess and write a report to recommend a piece of equipment, which works out at about $1000 total to buy something that is needed. Only O.T. are allowed to approve items, even if a Physio has said we need it. Or we have had to stop being independent because of getting older, and needing the equipment. An example is my battery/walker wheelchair which I have had for 2 years 9 self purchased)and have been lifting and sliding into my hatchback car, It weighs 23 kgms. My shoulders and balance no longer allow me to do this so I am going to have to put a lifter into my car. Total cost $6,000. I cannot get an OT in my area who will do the assessment. So instead of spending some of my package on it. I am drawing out of the principle of my pension and bank account. THen centerlink will say I have less monies and give me some more pension, and, the amount I contribute to my package will also be lowered. So I will eventually get the money for the lifter. But what a long convoluted way round and the government will also take back unspent package moneys as well. Unspent because I could not spend the money on the lifter.
This roundabout system will also only work because I can get the advance on my pension to buy the lifter in the first place. No-one wins except an OT if you can afford them and all the white collar workers that it will take to go this convoluted way round the system.
If this system commences in July, I believe we will all be disadvantaged. Also we are told Service Australia is going to be notifying us and our providers the amount of the contributions to be paid. Since Service Australia does not seem to be copying with its’ presnt load. How is it going to cope after July 1st.
Thanks for your great article, and allowing me to comment.
Well, what can one say after such a well rounded and clear expose of what our govt. thinks of its elder and vulnerable citizens except to say that we are all beyond disgusted at such contempt. As each govt official will retire with a huge golden handshake plus benefits, paid from our taxpayers money, they will never be concerned about what they can afford in their old age so why should they care. They don’t care because they are career politicians, some worse than others. The good ones don’t last long or are rolled over by their ruthless colleagues.
When our current prime minister can, with a straight face, make a grandiose statement about how much more he has given pensioners (an extra $3), then that says it all doesn’t it.
It beggars belief that consultants are constantly paid such a huge amount of money when evidence, lived experiences and first hand understanding of what aged care needs can be obtained and very easily provided by its own citizens.
However, appointing consultants allows the govt. to control the narrative and the desired outcome, it absolves the govt.ministers from doing anything themselves and provides them with a ready excuse to absolve themselves from any blame for their incompetence and inaction.
Why is it that Peter Willcocks, who is not a govt. boffin, is capable of making a clear and accurate analysis of the aged care costing and provision of services when the fools who have created it are incapable of seeing the flaws(or choose to ignore them).
Are there no people on a huge salary, employed in the Aged Care Govt. Departments, who have the capabilities to analyse the information and formulate a workable and fair model of care? Guess not because that means they would actually have to work rather than just flap around visiting the odd care home, having extended lunches with other govt. officials etc.to “discuss” the situation or having photo shoots to pretend they are actually doing something ! We, in fairness, that is probably that is all they ARE capable of doing.
There have been so many Inquiries, reports, statements, Royal Commission investigations ALL informing the govt. of what needs to be done and yet, here we are, with no improvement to the aged care sector at all. What does that ALSO tell you…… pay more or get nothing; can’t afford or receive suitable care then just do without or die; want to be treated as a valued human being then read a fairy tale; ensure that care givers and providers are accountable for their actions , just dream on!
There was a time when Australia was a reasonably fair country to its elder citizens but that has long gone and it is now a country on par with those who treat their elderly and vulnerable citizens with contempt, indifference and no humanity. There are so many organisations, individuals, groups who have continually fought to change the status quo and are true warriors for the work they do. These are the ones who should have a louder voice and come from a position of power in addressing problems and formulating models of care – not the bureaucrats or providers where profit is paramount. What a shameful country we have become.
The elderly do not count in our society now.
Thank you again Peter for another very insightful and thoroughly researched
article.
I’m one of those people on the single Aged Pension Level 4 HCP, now looking
for a suitable, and affordable Independent Living facility….entry costs
start at around $500 – $700K. The sale of my home won’t fetch anywhere near
that amount.
Options? Charity rental…..and the waiting list is many years.
Kind wishes
Helen Walne
Alarming news that seems to have dodged the headlines. Am I cynical in believing that it’s been kept under wraps during the pre-election policy revelations? This is not news that any government can be proud to spruik.
But wait for the outrage that will be expressed politically when the general public does wake up. Another savage cost of living blow to the most vulnerable people in the community.
I will soon require support to remain in my home. After reading this excellent article I’ve accepted that I’ll be forced to live in filth and probably will be quite malodorous as I’ll have only one shower a week.
Brilliantly said Peter Willcocks! This is the truth, the whole truth, nothing but the truth. What will it take for the Government to listen and do the right thing for all Older Persons in Australia ?
t appears that the decisions on cost have been calculated on the belief that the average household income of $120,000 per year (or two people earning the median income of roughly $60,000 each. But the reality for pensioners and those under retirement age are often surviving on under $30,000 per year. Thorough examination of these details must be undertaken
I found this article to be very interesting and very concerning. Our elders deserve to live life to its fullest and not have to worry about how their declining health will be funded and if they can afford it. Yes, some are fortunate to be very well off and have no worries paying what is required but they are not the majority. You work all your life and this is what faces you at the end? It is a scary thought for someone like me in their late 50’s already contemplating my future retirement. Trying to ensure that I am never a burden on the system or on my family. I have been a RN almost four decades caring for others, if I count the age that I first became a carer for someone at home, it is actually a total of 45 years. The state of healthcare today saddens me and makes me worry for the future. I am glad I am not starting my career today and I am concerned for my children and grandchildren, what does the future hold for them. We should not have to worry like this, when is the Government going to listen, when it is too late?