Navigating the New Aged Care Landscape

As we prepare for the implementation of the new Aged Care Act and following the recent pay increases to support the attraction and retention of qualified staff in March 2025, now is an opportune time to examine how the announcements of the March Federal Budget 2025-26 are impacting the aged care landscape.

The latest budget contains critical elements that will shape your retirement and aged care planning. While the budget delivers broad cost of living relief for the wider community, including older Australians, it also introduces targeted Aged Care Reforms that will directly affect entitlements for those receiving care services.

Your entitlements could significantly change based on whether you apply for Aged Care support before or after the 1st July, 2025. 

Here are the key details from the Budget at a glance: 

• $291.6 million committed towards aged care reform.

• A new regulatory model for aged care. 

• Aged care workforce pay rises.

• Cost of living measures:

  • Energy bill and tax relief.

  • Expanded bulk billing. 

  • Cheaper medicine costs with increased Pharmaceutical Benefits Scheme (PBS) listings.

Let's explore what these changes mean for you and how to navigate this evolving landscape together.

The New Aged Care Act 

The Federal Government has committed $291.6 million over five years towards aged care reform which includes a new Aged Care Act, set to start from 1 July 2025. Also,  $12.7 million will be rolled out over 2029–30 to aid further reforms within the sector. 

This new Act aims to make aged care more person-centred, focusing on the rights and needs of individuals.

The Act will include a Statement of Rights to make sure older Australians are treated with dignity and respect across all aged care services.

Read our article here for more information about how this could impact you or your loved one.

Aged Care Workforce Pay Rises

As part of the 2025–26 Federal Budget, the Government has committed $2.6 billion to fund pay rises for aged care nurses. The Fair Work Commission approved the salary boost last year, and the first instalment kicked in at the beginning of March.

There will be similar increases in October this year and August next year as part of the $2.6 billion package. 

For seniors, this investment is expected to help attract and retain skilled staff, improve the quality of care, and ensure better support across both home care and residential aged care settings.

Measures to Ease The Cost of Living 

Tackling rising living costs is a key focus of the 2025–26 Federal Budget. While the new measures are not aimed specifically at seniors, they are still likely to benefit.

Energy Bill Relief

Until 31 December 2025, households will benefit from a $150 discount on their electricity bills, split across two quarterly payments. This is in addition to the $300 in energy bill relief already announced for 2024–25.

Income Tax Rate Cuts

From July 2026, the 16% income tax rate applicable for earnings between $18,201 and $45,000 will be reduced to 15%. 

Then from 1 July, 2027 this income tax rate will be reduced to 14%. Average earners could save up to $268 in 2026–27 and $536 a year by 2027–28.

Expanded Bulk Billing 

Bulk billing will receive the largest single investment in the system in over 40 years. The Government has committed $7.9 billion to expand Medicare bulk billing to cover an extra 15 million Australians for free GP visits from 1 November 2025.

A Bulk Billing Incentive Program will be established to encourage medical practices to bulk bill, providing the possibility of lower cost regular medical care for seniors and the wider community. 

Also, an additional $644 million will fund 50 new Medicare Urgent Care Clinics across the country to provide free, bulk billed urgent care without having to visit the hospital emergency room.  

Cheaper Medication and Increased PBS Listings

From 1 January 2026, Australians with a Medicare card will pay less for their medicines, with the maximum PBS co-payment dropping from $31.60 to $25. Also, medicines with 60-day prescriptions offer extra savings of $150 a year.

New PBS listings will also reduce the cost of menopause treatments, and medicines for breast cancer, arthritis, and various cancers to name a few. 

What This Means for Your Retirement and Aged Care Planning

While it’s positive to see more funding and reforms, the aged care system is still complex and undergoing change.

If you are approaching retirement, thinking about the Age Pension, or planning ahead for aged care, now is a good time to review your situation. Getting personalised advice can help you make informed decisions that support your lifestyle goals, protect your assets, and reduce unnecessary stress.

Here are some important steps to consider:

• Review your retirement income: Understanding how your superannuation, savings, and assets impact your Age Pension entitlements is key.

• Plan ahead for aged care: Whether you’re staying at home or considering Residential Aged Care, early planning can give you more options.

• Get advice on Centrelink processes: Centrelink assessments can affect the cost of aged care and your pension. Clear advice can save a lot of time and frustration.

• Stay informed about upcoming changes: The new Aged Care Act will start rolling out in July 2025. Keeping on top of changes to the sector can help you plan ahead.

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We’re Here to Support You

At Olive Grove Financial Advice, we understand that planning for retirement and aged care can be complex. That’s why our experienced team is dedicated to providing clear, supportive financial advice for retirement and aged care planning to help you gain peace of mind. 

If you would like to discuss how the new budget measures might affect your retirement or aged care plans, contact us today to book a chat.

Bill Savellis

Senior Financial Adviser

Having navigated the Aged Care landscape for both of his parents, Bill understands how challenging it can be to make the right decisions for your future care needs. That's why he believes that everyone should have access to financial advice during this time. Bill has been a Financial Adviser for over 22 years, and is passionate about helping others access the financial advice they need. Drawing from his own experience in the financial sector, Bill develops strategic, personalised plans to support transitions to Aged Care or Home Care.

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Disclaimer: Prepared without taking into account your objectives, financial situation or needs. Before acting on any information in this article, Olive Grove Financial Advice recommends that you consider whether it is appropriate for your circumstances. Information in this article was correct and current as of 8 October 2024. Olive Grove Financial Advice is operated by Bill Savellis through The Financial Advisor (Australia) Pty Ltd ABN 72 619 546 431, who is a Corporate Authorised Representative (No. 1278394) of Havana Financial Services Pty Ltd.