Many in retirement are travelling comfortably, with three key factors contributing to their happiness – good physical and mental health and enough money to enjoy life.
Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
Private in-home care might be a ‘smart choice’
For many Australians, aged care planning is a conversation that happens too late – often amid a crisis. When an ageing parent or loved one suddenly needs additional support, the default assumption is that residential aged care is the only viable option.
But with major reforms to government-funded home care set to take effect on July 1, families should consider a different approach — one that prioritises independence, quality of life and financial flexibility.
Australia’s aged care system is shifting toward a consumer-driven model that places greater financial responsibility on individuals. Under the upcoming reforms, wealthier Australians receiving government-funded home care will contribute between 50 per cent and 80 per cent of service expenses, with the lifetime cap on contributions increased, meaning higher-income Australians will continue paying more.
While the government aims to make aged care more equitable, these changes raise an important question: Is the government home-care package still the best option for those who can afford private care? Increasingly, the answer appears to be no.
Aged care has traditionally been viewed as a choice: either accept a government home care package or move into a residential aged care facility. However, private in-home care offers a third alternative – one with more flexibility, higher quality and often with better value for money.
So, let’s dissect the options.
Residential aged care: Many families assume that moving a loved one into a residential aged care facility means the government covers all costs. The reality is quite different. A lump sum refundable accommodation deposit (RAD) ranging from $450,000 to well over $1 million (it depends on the facility) is required upfront. This capital is tied up and only refunded when the resident leaves or dies. Alternatively, if the deposit is paid as a daily accommodation payment (DAP), there is no refund on this amount that is charged at 8.42 per cent interest (at January 2025).
In addition, there are daily care fees (a standard $63.57 a day to cover basic services), means-tested fees (additional charges based on assets and income) and extra service fees for premium meals, private rooms and lifestyle activities. For individuals requiring higher levels of care, residential aged care costs can exceed $100,000 a year.
Government-funded home care: There are four packages, with funding to a maximum of just under $62,000 a year for the highest level. Add in administration and case management fees eroding up to 35 per cent of the funding, government-funded services provide less value. Further, there is a reduction in government contributions when income testing is applied, so many wealthier Australians are questioning the value.
From July 1, 2025, via the new Support at Home program, there will be four additional levels of home care packages. However, this increase is predominantly about a more nuanced allocation of funds. There is one level above the current maximum, bringing the maximum level eight up to more than $78,000 a year.
While administration fees will be capped at 10 per cent (proposed), there is much industry talk of significant price hikes for basic services, and even greater co-contributions from wealthier Australians – up to 80 per cent of the cost of some services.
Private in-home care: For many families, private home care offers a smarter and more effective alternative – allowing older Australians to receive high-quality, tailored care in the comfort of their own homes.
Some families opt for 24/7 private care for high-needs clients, but even part-time home care can provide substantial support at a fraction of the cost of residential care. Some clients have been able to live at home with as little as three hours of daily assistance.
Instead of paying an upfront RAD or a daily equivalent, families pay for services as needed, which means assets remain accessible for other investments. And, unlike residential facilities where staff are often stretched thin, private care provides one-on-one attention, ensuring greater consistency, a higher standard of service and better quality of life. Finally, there are no waiting lists.
As Australia’s aged care system evolves, it’s clear that government-funded services will continue to come with financial and bureaucratic challenges.
Government home care will always be an essential safety net, but for those who can afford choice, it may no longer be the most effective option.
The upcoming reforms reinforce a reality that affluent Australians will pay more for aged care regardless – so a service that offers greater flexibility, quality and peace of mind will be an increasingly appealing option.
