Aged Care Room Price Cap to Rise to $750,000 in 2025: What Families Need to Know

The Australian government has announced an increase in the market price cap for aged care rooms from $550,000 to $750,000, effective January 1, 2025. This adjustment allows aged care providers to charge higher accommodation fees without requiring special approval. The cap will also be indexed annually to reflect changes in the Consumer Price Index (CPI).

This change aims to address rising costs in the aged care sector and improve service sustainability, though it may significantly increase the financial burden on residents and their families.

For instance, individuals moving into aged care homes after the cap increase could face higher costs, both for lump-sum Refundable Accommodation Deposits (RADs) and daily accommodation payments (DAPs).

Additionally, RADs, traditionally fully refundable, will now allow providers to retain up to 10% over five years from mid-2025.

If you or a family member may require aged care soon, it could be beneficial to review options and consider moving before the new cap takes effect to save on costs. Consulting with a financial advisor specialising in aged care might also help navigate these changes effectively.

If you need to find aged care, simply click on your state below to begin your search:

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If you need more help finding aged care, call 1300 197 230.