BY WEALTH ADVISER
If you ask most Australians where they want to spend their later years, the answer is almost always the same: at home. In their own kitchen, their own garden, their own neighbourhood. The familiarity of a place that holds decades of memory is not a luxury — for many people, it is central to their sense of identity and wellbeing.
The practical reality of ageing at home, though, requires planning. As care needs increase — gradually for some, more suddenly for others — the costs of staying at home can be significant, and the system that funds and delivers home care has recently undergone its biggest structural change in a generation. Understanding how that system works, what it costs, and how to factor it into a broader financial plan is one of the more valuable conversations you can have before the need becomes urgent.
A New System: Support at Home
On 1 November 2025, the Australian Government replaced the Home Care Packages program with a new framework called Support at Home. The change was recommended by the Royal Commission into Aged Care Quality and Safety, and it is designed to be more flexible, more transparent, and more closely matched to individual needs.
Under the old system, there were four package levels, each with a fixed annual budget. Support at Home introduces eight funding classifications, ranging from Classification 1 (for people who are mostly independent but need occasional help with light tasks) through to Classification 8 (for people with complex, high-level care needs requiring daily clinical and personal support). Annual government funding ranges from approximately $11,000 at Classification 1 to approximately $78,000 at Classification 8, with budgets allocated quarterly.
The shift from four levels to eight means the funding can be more precisely matched to what someone actually needs, rather than forcing people into broad categories that may overfund or underfund their care. It also means that as needs change — which they almost inevitably do — a reassessment can move someone to a higher classification with a larger budget, though wait times for ongoing funding can still apply depending on priority and demand.
Three additional short-term pathways sit alongside the ongoing classifications: the Assistive Technology and Home Modifications scheme (funded separately through tiered budgets, with high-tier funding up to $15,000 and, for assistive technology, potentially more where justified), the Restorative Care Pathway (approximately $6,000 for intensive allied health over up to 16 weeks), and the Endof-Life Pathway (approximately $25,000 for comprehensive in-home support over 12 weeks for people expected to live less than three months).
The Commonwealth Home Support Programme, which provides more basic support for people with lower-level needs, continues to operate separately and is not scheduled to transition into Support at Home before 1 July 2027.
What It Costs: Government Funding and Your Contribution
One of the most common misconceptions about home care is that the government covers all of it. It does not. Support at Home is a shared-cost model: the government provides the majority of funding, but participants are expected to contribute toward some services depending on their financial circumstances.
The contribution structure works differently depending on the type of service. Services are grouped into three categories. Clinical care — including nursing, physiotherapy, and occupational therapy — is fully funded by the government with no participant contribution. Independence services — such as personal care, transport assistance, and social support — carry a moderate contribution. And everyday living services — domestic assistance, meal preparation, gardening — carry a higher contribution, reflecting the view that these services are less clinically driven.
How much you pay depends on your pension status and your assessed income and assets. Services Australia conducts an assessment, similar to the Age Pension means test, to determine your contribution rate. Based on government-endorsed provider materials, indicative rates are as follows: a full Age Pension recipient would pay around 5 per cent of the service cost for independence services and 17.5 per cent for everyday living services. A part pensioner or Commonwealth Seniors Health Card holder would pay somewhere between those base rates and the maximum, depending on their means. A self-funded retiree without a Seniors Health Card pays the highest rates — up to 50 per cent for independence services and 80 per cent for everyday living services. Individual rates are determined by Services Australia based on your specific circumstances.
To put some rough numbers around this: if a full pensioner on Classification 2 (approximately $16,000 per year in government funding) receives a mix of personal care, domestic help, and nursing, their out-of-pocket contributions might total a few hundred dollars per quarter — meaningful, but modest. A self-funded retiree on a higher classification receiving regular personal care, domestic assistance, and allied health could face several thousand dollars per year in contributions, depending on the service mix and provider pricing.
Two important safeguards limit how much you can pay over time. A lifetime cap of $135,318.69 (as at 1 November 2025, indexed twice yearly) applies to your total contributions across both home care and residential care. Once you reach this cap, you pay no further contributions. For people who were receiving a Home Care Package before 12 September 2024, a lower lifetime cap of $84,572 applies under the “no worse off” principle.
It is worth noting that providers set their own prices for services until government price caps take effect from 1 July 2026. This means the same service can cost different amounts depending on which provider you use — and comparing providers on price is both possible and encouraged. My Aged Care’s “Find a provider” tool allows you to compare published price lists.
How to Access the System
The entry point for Support at Home is My Aged Care, the government’s gateway to aged care services. You can contact them by phone (1800 200 422) or online. From there, the process follows a set sequence: a registration and initial screening, followed by a comprehensive assessment using the new Integrated Assessment Tool, which looks at your health, mobility, daily living, cognitive function, and personal goals.
Based on the assessment, you receive a Support Plan that outlines the services you are approved for and the classification level that determines your funding. You then choose a registered provider, enter into a service agreement, and begin receiving services within your quarterly budget.
To be eligible for Support at Home, you must generally be 65 or older (50 or older for Aboriginal and Torres Strait Islander people), meet residency requirements, and have assessed care needs. Some additional exceptions apply. If your needs change over time, you can request a reassessment to adjust your classification.
One practical point: do not wait until a crisis to contact My Aged Care. The assessment process takes time, and having an approved plan in place before care becomes urgent gives you more control over the providers and services you receive. Many people begin the process while they are still managing well, treating it as a form of preparedness rather than an admission of decline.
The Planning Considerations
Understanding how the system works is the first step. The second is thinking about how home care costs fit into your broader financial plan — particularly if you are retired or approaching retirement. Several considerations deserve attention.
Home care costs are not fixed — they grow. A common pattern is that someone begins with a low classification and modest services, then gradually moves to higher classifications as needs increase over several years. What starts as a few hours of domestic help each week can evolve into daily personal care and regular nursing visits. The financial commitment tends to grow with the level of care, and planning for the trajectory rather than just the starting point is important.
The interaction with the Age Pension matters. Your home care contributions are determined using an income and assets assessment similar to the Age Pension means test. This means the strategies that optimise your pension entitlement — discussed in Article 1 of this issue — may also affect what you pay for home care. Drawing down assets in a way that keeps you within favourable means-test thresholds can reduce your home care contributions as well as increase your pension. This is one of the areas where the retirement income plan and the aged care plan intersect, and where coordinated advice adds genuine value.
The question of funding source. When home care costs arrive, the money has to come from somewhere. For most retirees, the main options are super (via pension drawdowns), non-super investments, cash savings, or a combination. Each has different tax and means-test implications. Withdrawals from a tax-free super pension, for example, do not count as assessable income for the means test (though the underlying asset is still counted under the assets test). Non-super investment income, by contrast, is assessed under the income test. The choice of which pot to draw from is not straightforward, and it interacts with the retirement income considerations covered earlier in this issue.
Home care as a bridge to residential care. For some people, home care is a permanent solution — they remain at home, with increasing support, for the rest of their lives. For others, it is a bridge to residential care when home-based support is no longer sufficient. If residential care is a possibility down the line, it is worth understanding that the lifetime contribution cap applies across both settings. Contributions you make under Support at Home count toward the same cap that applies in residential care. The financial planning for residential aged care — including refundable accommodation deposits (RADs) and daily accommodation payments — was covered in detail in a previous issue of this series.
Having the conversation early. Perhaps the most important planning consideration is timing. The families who find aged care least stressful are usually those who discussed it before the need became acute. That does not mean making binding decisions years in advance — circumstances change, and the system itself is still evolving. It means having a general understanding of how the system works, what the likely costs are, and where the funding would come from. It means knowing that My Aged Care exists and roughly how the assessment process works. And it means having the conversation with your family, so that everyone understands the plan — or at least understands that there is one.
Worth Thinking About
A few questions are worth reflecting on as you consider whether aged care planning should be on your agenda.
• If you or your partner needed home care services in the next few years, do you have a rough sense of what that might cost — and where the money would come from?
• Have you or a family member registered with My Aged Care, even if services are not yet needed? Understanding the process before it becomes urgent makes everything easier.
• How do your current retirement income arrangements interact with aged care means testing? Would a change in how you draw down your assets affect both your pension entitlement and your home care contributions?
• If home care eventually proved insufficient, do you have a sense of what the next step would involve — and how it would be funded? The earlier issues in this series on residential aged care costs and RADs may be worth revisiting.
• Have you discussed aged care preferences with your family? Not the details of funding, necessarily, but the broader question of what matters to you — independence, location, the kind of support you would and would not accept.
The goal of planning for aged care at home is not to predict the future — it is to reduce the number of decisions that have to be made under pressure. The Support at Home program, for all its complexity, exists to help Australians stay in their own homes for as long as possible. Understanding how it works, and how it fits into your financial plan, is one of the most practical things you can do to protect both your independence and your peace of mind.
References
1. Department of Health and Aged Care. “About the Support at Home program.” Program commenced 1 November 2025, replacing Home Care Packages and Short-Term Restorative Care. CHSP transition no earlier than 1 July 2027. health.gov.au.
2. Department of Health and Aged Care. “Funding classifications for Support at Home.” Eight ongoing classifications with annual funding from approximately $11,000 (Classification 1) to $78,000 (Classification 8). Quarterly budget allocation and carryover rules. health.gov.au.
3. Department of Health and Aged Care. “Support at Home participant contributions.” Contribution rates by pension status and service category. Lifetime cap of $135,318.69 (as at 1 November 2025, indexed). “No worse off” lifetime cap of $84,572 for pre-12 September 2024 HCP recipients. health.gov.au.
4. My Aged Care. “Support at Home costs and contributions.” Contribution categories (clinical, independence, everyday living), means testing process, fee estimator, and provider comparison tools. myagedcare.gov.au.
5. Department of Health and Aged Care. “New Support at Home pricing guidance.” Providers set own prices until government price caps apply from 1 July 2026. health.gov.au. 6. My Aged Care. “How to access aged care services.” Registration, assessment, and eligibility requirements. Age eligibility: 65+ (50+ for Aboriginal and Torres Strait Islander people). myagedcare.gov.au.
