The Age Pension is Changing

It’s That Time of Year Again

It feels like March was only the other week, but here we are again – September is here, which means it’s time for the next Age Pension indexation.

Twice a year, in March and September, the Australian Government reviews and updates the Age Pension to help keep pace with changes in the cost of living. While most people are pleased to see a little extra in their pension payments, it’s worth knowing that these increases can also have a flow-on effect when it comes to aged care fees.

So, what can this mean?

A Little More in Your Pocket

For many older Australians, the Age Pension is a significant source of income. The September increase is designed to help pensioners keep up with rising living costs and assist with everyday expenses such as groceries, utilities, fuel and healthcare.

While the increase may not seem substantial, every little bit helps.

It Can Also Mean Changes to Residential Aged Care Fees

If you or a loved one is receiving, or considering, residential aged care, it’s important to understand that some aged care fees are linked to the Age Pension.

The Basic Daily Fee

The Basic Daily Fee (BDF) is payable by everyone living in residential aged care, whether they are receiving respite or permanent care.

Because this fee is calculated at 85% of the single Age Pension, it generally increases each time the pension is indexed.

It’s a relatively small adjustment, but one that’s worth being aware of when planning your ongoing care costs.

What About Permanent Residential Aged Care?

If you’re a permanent resident, an increase to your Age Pension may also increase your assessable income. Depending on your personal financial circumstances, this could affect some of the income-tested contributions you pay towards your care.

For people who entered residential aged care on or after 1 November 2025, these may include:

  • Hotelling Contribution
  • Non-Clinical Care Contribution

Not everyone pays these contributions, but it’s something to keep in mind whenever pension rates change.

And What About Support at Home?

The September indexation doesn’t just affect residential aged care.

If you’re receiving services through the Support at Home program, some of your co-contributions may also change.

Contributions towards independence services and everyday living services can increase in line with the Age Pension. The lifetime contribution cap is also indexed every March and September.

If you’re currently receiving Support at Home, it’s worth keeping an eye out for any updates from your provider about how these changes may affect your individual contributions.

The Takeaway

While it’s always nice to receive an increase to your pension, it’s equally important to understand the bigger picture.

Changes to the Age Pension can influence:

  • Your residential aged care fees
  • Your Support at Home contributions
  • Your overall aged care budget

If you’re planning ahead or helping a loved one navigate the aged care system, understanding these changes can help you avoid surprises and make more informed decisions.

If you’re unsure how these updates might affect your situation, we’re always happy to explain how the aged care system works and what fees may apply.

Book your free Discovery Session today – Click Here to Book. 

A Quick Disclaimer

Retirement Care Solutions provides general information to help individuals and families better understand the aged care system. We are not licensed financial advisers, and the information in this article should not be considered personal financial advice. We recommend speaking with a qualified aged care financial adviser for advice specific to your circumstances.

What Are The Types Of Care Available?

Help at Home

As you get older, living independently in your own home can become more difficult.  If you or your loved ones are finding it harder to do things you used to, help is available and you can ask for some assistance.

As you get older, living independently in your own home can become more difficult. If you’re finding it harder to do the things you used to, you can ask for some help at home.

Asking for help doesn’t mean losing your independence; it’s quite the opposite. Getting a little help with daily activities means you can stay independent in your own home for longer. In fact, a little support can lead to a much better life.

Help at home looks different for different people. It may mean getting help with shopping and cooking. Or it could be receiving personal care to bath, dress, and get in and out of bed. It may even mean getting modifications to improve your safety and movement around the house.

Family and friends may not also be around to assist so getting some help at home can enable you or your loved one to continue to live independently in the home for as long as possible.

Short-term care

Maybe you or your loved one needs some help after a hospital stay, or support if regular family care is taking a break or holiday.  Short-term can help with coping with life’s interruptions.

Short-term care provides care and support services for a set period of time. There are different types of short-term care depending on your needs, but all aim to help you with day-to-day tasks and either restore or maintain your independence.

Depending on the type of short-term care you access, help can be provided for a few days to a few months at a time.

Aged Care Homes

You or your loved one might be at a stage where living independently, even with carer support or home care services to help you, is no longer possible or considered safe.  If that’s the case, it may be time to consider moving into an aged care home.

An aged care home (sometimes known as a nursing home or residential aged care facility) is for older people who can no longer live at home and need ongoing help with everyday tasks or health care.

Leaving your own home and entering an aged care home isn’t an easy decision. But it doesn’t have to be a daunting experience. An aged care home can give you the care and services you need to maintain your quality of life.

The government funds a range of aged care homes across Australia so that they can provide care and support services to those who need it. Each aged care home is different, so it’s important to choose the right one for you.

How Does My Aged Care Assess My Needs?

The first stage is to find out if you or your loved one are eligible for subsidised aged care. This involves a two-part assessment process that understands the needs and what services could help. It starts with a simple eligibility check which can done online or over the phone followed by an in-person assessment.

The first step to access government-funded aged care services is to check eligibility for a face-to-face assessment.

Yours or your loved ones Medicare card is all that is needed. The application takes at least 10 minutes, so make sure there is a little time to spare.

The first step is an eligibility check. Our priority is getting the help that is needed. To do this, My Aged Care will ask about:

  • your or your loved one’s health
  • how you’re/they’re managing at home
  • any support currently receiving
  • the answers will help My Aged Care understand your needs and whether there is eligibility for a face-to-face assessment. 

If you are eligible, they will ask you for a few details to complete the application.

My Aged Care will keep a record of the application, so they won’t need to ask for the same information again at your assessment.

If your application is successful, an assessor will be in contact to arrange a face-to-face assessment. A face-to-face assessment can determine exactly what you or your loved one needs and can even give advice about services you may not have thought about. 

If you or your loved one have immediate needs, My Aged Care may refer you directly to services before your assessment takes place.

What To Consider When Looking For Residential Care?

Each organisation will provide services differently and charge different costs. So it’s important to look around, think about your or your loved ones priorities, needs, budget, and location, and compare providers before deciding.

When looking for aged care services, there are four general areas you should consider:

Service – Does the provider offer the services that you or loved one are eligible for and is the provider going to meet those needs?

Costs – What fees and costs might be needed to pay?

Availability – Does the provider have availability now, or is there a waiting list, and for how long?

Quality – Will the provider deliver good, quality service?

What Kind of Assessment Will My Aged Care Give Me?

There are two types of assessments that work out care needs and what types of care you or loved one may be eligible for.

A home support assessment with a Regional Assessment Service (RAS)

If, from the information provided during the call, it sounds like low-level support is needed to stay independent in the home, the contact centre may recommend a home support assessment with a RAS assessor. This type of support is provided through the Commonwealth Home Support Programme.

A comprehensive assessment with an Aged Care Assessment Team (ACAT)

If it sounds like care needs are greater than what the Commonwealth Home Support Programme can support, a comprehensive assessment with an ACAT assessor may be recommended

How To Prepare For An Assessment?

It has now been assessed from the call, that an ACAT assessor is recommended and needs to conduct a face-to-face assessment, here are some tips:

For any face-to-face assessment:

  • have your Medicare card and one other form of ID proof – such as DVA card, driver’s license, healthcare card, or passport;
  • have a copy of any referrals from your doctor;
  • consider if you would like a support person present;
  • have any information you already have about aged care services that you may want to discuss
  • have contact details for your GP or other health professionals;
  • consider if you need special assistance to communicate, such as a translator or Auslan interpreter;
  • have information on any support you receive.

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