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!
