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The Aged Care Bill 2024, introduced to Parliament on 12 September 2024, marks a significant step in reshaping Australia’s aged care system. Expected to be enacted on 1 July 2025, this legislation aims to create a unified, client-focused framework. By simplifying access and ensuring comprehensive oversight, this new Act promises a stronger commitment to the rights and well-being of older Australians and their families, as outlined by the Royal Commission into Aged Care Quality and Safety.
The landscape of aged care fees is set to change, affecting both home care and residential care services. While the government will continue to subsidize aged care to ensure affordability, some individuals may experience fee increases. Here’s what you need to know:
1. Government Subsidies - The government will maintain its coverage of 73% of residential care costs and 89% of home care costs, helping to keep aged care affordable.
2. Adjustments to Residential Care Fees
3. Increased Living Expenses - Contributions to daily expenses, such as food and utilities, may rise by up to $12.55 per day. Depending on financial circumstances, clients may also be asked to contribute more toward care costs.
4. Changes to Care Costs and Lifetime Cap - Depending on financial circumstances, care costs may increase by around $10 per day. Additionally, the lifetime cap for care expenses is rising from approximately $80,000 to$130,000, which clients will need to account for in their financial planning
Impact on Home Care Services:
New Support at Home Program
The upcoming Support at Home Program will consolidate existing options into ten levels of care packages, better aligning support with individual needs.
5. Higher Contribution Fees
While clinical care will still be covered within the package, clients may be responsible for more out-of-pocket expenses for services like cleaning and gardening.
6. Means-Testing of Home Care Contributions
Home care contributions will now be based on both assets and income under Centrelink rules, which could impact self-funded retirees and part-pensioners in particular
The new Aged Care Act will require a closer look at aged care planning, particularly in light of these upcoming cost adjustments. Here’s how RJS Wealth Management can help:
1. Understanding Fee Structures
We provide clarity on these changes, breaking down government subsidies, room price caps, and out-of-pocket contributions to help clients plan effectively for aged care.
2. Evaluating Home Care Options
With the Support at Home Program, we can help clients assess which care package best meets their needs and budget, ensuring all services are accounted for.
3. Exploring Cost-Saving Strategies: If you or a loved one may require care soon, our advisors can help determine if moving before 1 July 2025 could offer cost savings, maximising financial benefits within the existing framework.
4. Reviewing Service Agreements: With enhanced provider accountability and transparency, our team can guide clients in reviewing service agreements, ensuring you know what to expect financially and can make well-informed decisions.
The new Act builds upon previous amendments, setting the ground work for its introduction. Notable legislative changes include:
Financial Planning Considerations
Planning for aged care expenses can be complex, especially with the evolving requirements of the new Act. RJS Wealth Management can assist clients by providing:
Guiding You Through Change
Navigating aged care decisions under new regulations can feel overwhelming. At RJS Wealth Management, our goal is to simplify this process for you, providing expert guidance to help you plan effectively for aged care needs. Our team is here to support you in making well-informed choices, ensuring your financial plan aligns with these important changes.
Contact RJS Wealth Management Today
Ready to discuss how the new Aged Care Act may impact your financial plans? Contact us today for a consultation tailored to your needs.
This blog has been prepared by RJS Wealth Management Pty. Ltd. ABN 24 156 207 126. RJS Wealth Management Pty. Ltd. is a Corporate Authorised Representative (No. 438158) of Modoras Pty. Ltd. ABN 86 068 034 908 an Australian Financial Services and Credit Licensee (Number 233209). The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individual's personal circumstances have been taken into consideration for the preparation of this material. Any individual making a decision to buy, sell or hold any particular financial product should make their own assessment taking into account their own particular circumstances. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Pty Ltd recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication.