Introduction
The Australian Government has introduced the Aged Care Bill 2024 to strengthen and improve Australia’s aged care system. This Bill, introduced to Parliament in September 2024, will come into effect as the new Aged Care Act 2024 from 1 July 2025.
These changes may affect both current and future residents of Mercy Health Homes, including updates to fees, charges and services.
This page provides key information about how the Aged Care Act 2024 may impact you. As the Australian Government releases more details, Mercy Health will keep this page updated.
For the latest official updates, visit the Australian Government’s website.
We also encourage you to seek independent financial advice to help you make informed decisions about your aged care journey.
For existing residents
Will my fees and charges relating to accommodation and care fees change with the introduction of the New Aged Care Act?
If you are living in aged care on 30 June 2025, the Australian Government has confirmed that the “no worse off” principle will apply.
This means that all existing permanent Mercy Place residents as of this date will keep their current payment arrangements for as long as they remain in residential aged care.
Residents will also have the option to opt out of these existing arrangements at any time.
Before making any changes, Mercy Health strongly recommends speaking with an independent financial advisor to determine the best option for your individual circumstances.
For Prospective Residents
What will my fees and charges be if I move into Residential Aged Care after the 1 July 2025?
The Australian Government has announced several changes to fees and charges under the Aged Care Act 2024.
Key changes include:
Basic Daily Fee
The Basic Daily Fee will not change, this cost contributes to cover the day-to-day services a resident receives. The Basic Daily Fee is calculated at 85% of the full basic pension.
Means-Tested Care Fees
The current means-tested care fee will be abolished and will be replaced by two new fees. Residents assessed by Services Australia as having sufficient income or assets to contribute, will be asked to pay these fees or a portion thereof.
Non-Clinical Care Contribution (covering non-medical services such as bathing, mobility assistance and lifestyle activities). This is paid until the resident has contributed $130,000 or been in permanent residential aged care for 4 years, whichever comes first.
Hotelling Contribution: This contribution will be means tested, residents who can afford to pay their full accommodation cost will contribute to daily living costs such as food, cleaning, laundry and utilities.
Accommodation Contributions
Refundable Accommodation Deposits (RAD) and Contributions (RAC)
From 1 July 2025, providers will be required to retain a small proportion of each new RAD and RAC. This amount will be 2% per year deducted monthly and capped at five years.
Daily Accommodation Payment (DAP) Indexation
For new residents entering care from 1 July 2025, DAPs will be indexed twice a year, aligned with the Consumer Price Index (CPI)
Additional Service Fees
Additional Service Fees will be replaced by:
Higher Everyday Living Fees (HELF) (for additional goods and services not otherwise required to be provided under the Aged Care Rules)
The Australian Government continues to release details on these changes. Mercy Health will update this page as more information becomes available. We strongly recommend speaking with an independent financial advisor to understand how these changes may affect your individual circumstances.