Most people with assets will pay more for aged care if they enter the system after 1 July 2025.

Back in October, we shared information about the aged care fee reforms aimed at enhancing the quality and sustainability of aged care in Australia.

Now, with more details available and these changes fast approaching, it’s critical that people don’t leave care decisions too late. Aged care planning takes time, and delaying could mean higher costs and fewer choices. These reforms will impact the fees associated with home care and residential care services, so now is the time to get informed and consider any necessary action.

Whether you’re currently receiving care or supporting a loved one on their care journey, it’s essential to understand what these changes could mean for you.

Aged care fee reforms from 1 July 2025

A new aged care system will come into effect on 1 July 2025.  If someone is already in aged care at that time, their fees will stay the same under the old rules.

However, if an existing resident moves to a different facility after 1 July 2025, it’s important to seek advice from one of our aged care advisers to understand how the current rules may still apply.

Accommodation

The main changes for new residents from 1 July 2025 are:

1. Retention fee on Refundable Accommodation Deposit (RAD): Providers will keep a small portion of the RAD as a non-refundable retention fee of 2% per annum for up to five years, with a maximum of 10% retained.
2. Indexing of Daily Accommodation Payments: For residents who choose to pay a daily fee instead of a RAD, the Daily Accommodation Payment (DAP) will increase twice a year (on 20 March and 20 September) in line with the Consumer Price Index (CPI).

There will be no changes to how the family home is treated in the aged care means test assessment process. If a spouse or a “protected person” lives in the home, the property remains exempt from financial assessments. Otherwise, approximately $208,000 of its value (indexed) will be included.

Daily Care Fees

The government will continue to fund all clinical care. Care fees can be compared to the current cost structure as follows:

Home Care (Support at Home)

From 1 July 2025, the Home Care Package system will change to the Support at Home Program, with funding divided into three areas: Clinical Care, Independence, and Everyday Living.

1. New Classification System: Recipients will be assessed into one of ten funding categories to better match funding with their individual needs.
2. Independence and Everyday Living Contributions: The government will cover 100% of Clinical Care costs. However, individuals may need to contribute up to 50% for Independence Services and up to 80% for Everyday Living Services. The amount payable will be based on Age Pension status or Commonwealth Seniors Health Card eligibility.
3. Home Care grandfathering: People with a Home Care Package as of 30 June 2025 will keep the same level of funding under the new Support at Home program along with any unspent funds. Those on the National Priority System or approved for a package by 30 June 2025 will receive an equivalent Support at Home budget when available. If a future assessment qualifies a recipient for more funding, they will transition to the new Support at Home classification once it becomes available.
4. Contribution arrangements: People who were receiving a Home Care Package, were on the National Priority System, or were assessed as eligible for a package by 12 September 2024, will not pay more due to the reforms. Their contributions will remain the same or be lower. If they move to residential care, their contribution arrangements will continue unless they choose to switch to the new program. However, changes to accommodation payments in residential care will still apply, as these are determined by agreements between the resident and their provider.

What does this mean for those already in care?

If you’re already in residential aged care, your fees are unchanged by the new legislation. As mentioned earlier, if there is a more from the current care, it is important to get advice to understand how the impact.

It’s useful to reflect on what happened the last time the rules changed. The current aged care laws, which came into effect on 1 July 2014, did not impose the new fee arrangements on those already in aged care or receiving a Home Care Package.

Where can I find out more about the proposed legislation?

On 24 November 2024, Parliament passed the Aged Care Bill 2024. This Bill becomes the new Aged Care Act, coming into effect from 1 July 2025.For more details, click the link below. https://www.health.gov.au/our-work/aged-care-act

We are here to help, every step of the way

The proposed aged care fee reforms to residential aged care and home care are significant. If you’re unsure about your current situation or how these aged care fee reforms might impact your care situation moving forward, your adviser can put you in touch wit Alteris’ Lifestyle and Care team.

Alteris’ specialist division of financial advisers are accredited in aged care advice and can talk you through all available options and explain the various financial considerations. Their team can also provide full support with ensuring the fees and pension are correct by working directly with your accommodation provider, Services Australia and the relevant government departments. Learn more about Alteris’ accredited aged care financial advisers.

Welcome to summer—a season of activity, last-minute tasks, and celebrations with family and friends. We take this opportunity to wish you and your family a joy-filled and safe festive season!

While headline inflation eased to 2.8% in the September quarter, the Reserve Bank remains firm on interest rates. RBA Governor Michelle Bullock acknowledges that the drop in the cost of living may offer welcome relief for most of us, but the Board’s key focus is on trimmed mean inflation, which still isn’t “sustainably” within the desired target range of 2-3%. According to the RBA, it’s unlikely to reach that range until late 2026.

The share market reacted sharply to the Governor’s comments in the final days of a month that had seen several all-time highs. US President-elect Trump’s promise of 25% tariffs on Canadian and Mexican goods also contributed to the billion-dollar share sell-off. Nonetheless, the S&P/ASX 200 finished November 3.4% higher.

The Australian dollar also took a hit, driven by concerns over potential US tariffs and the RBA’s interest rate outlook. It fell to a seven-month low, dipping below 65 US cents near the end of the month.

In positive news, the ANZ-Roy Morgan Consumer Confidence Index, while slightly down, has remained above 85 points for six consecutive weeks—the first time in two years. Meanwhile, Commonwealth Bank projections anticipate a boost in sales for small businesses, driven by Black Friday and Cyber Monday sales and the upcoming festive season.

If there is something affecting your financial situation that you would like to discuss, please do not hesitate to reach out to our team.

It’s the last month of spring, and with summer on the way, many people are preparing for Christmas and the holiday period.

At its latest meeting, the Reserve Bank of Australia left interest rates unchanged at 4.35%, citing persistently high underlying inflation of 3.5% for the September quarter, which remains above the RBA’s 2.5% target midpoint. This suggests rates are likely to stay elevated for some time, offering little reprieve for mortgage-holding households. The Consumer Price Index rose just 0.2% in the September quarter and 2.8% over the twelve months to the September 2024 quarter, marking the lowest rate in just over three years. Prices fell slightly for alcohol and tobacco, clothing, housing, health, and financial services. Transport costs also fell for the first time since 2020.

Share prices softened during the last two weeks of October, recording the worst monthly performance in six months. The S&P/ASX 200 closed down by 1.31% for the month, after reaching record highs again mid-month.

The Australian dollar ended the month at 65.7 US cents after almost hitting 70 US cents just a few weeks ago. Investors reacted to weaker-than-expected Australian retail sales and stronger US unemployment and retail sales figures.

Iron ore has hit a one-month low at USD 104.08 after the heady highs in January of almost USD 145. All eyes are on meetings in China this month about expanding its stimulus measures. However, post meeting, the stimulus disappointed investors with many investors believing China is keeping its tactical powder dry in play as the Trump-China tariff negotiations build.

Back over in the US, after a long and hard-fought campaign, the US Election finally concluded. Leading up to polling day, it was expected to be a tight race, but the Don (Donald Trump), managed to pull off a historic White House comeback in emphatic fashion. While the future may hold more uncertainty, shorter term US equity markets rejoiced, with the S&P 500 (+2.53%), Nasdaq (2.95%) and Russell 2000 (small cap representative, +5.84%) all surging post the election result. President elect Trump’s policies of supporting lower corporate tax rates, deregulation and industrial policies that favour domestic growth were all positive for the stock market. Kamala Harris was graceful in defeat and highlighted the “importance of a peaceful transfer of power and being a president for all Americans,” Longer term implications are yet to be felt. Mr. Trump’s policies are more inflationary e.g. imposing very high tariffs (e.g. 60%) on China and maintaining larger budget deficits is likely to have a ripple effect to Australia’s trade. Adding other uncertainties such as climate change policy (e.g. backing fossil fuels) and global trade war with China creates an uncomfortable environment.

If there is something affecting your financial situation that you would like to discuss, please do not hesitate to reach out to our team.

Interest rate speculation is rife after the Reserve Bank of Australia (RBA) kept rates on hold at 4.35% last month. Economists now predict it may be several months before rates fall. It’s a different story in the United States, where the Federal Reserve slashed interest rates by half a percentage point in September and forecast two more cuts before the end of the year.

Australia’s inflation rate fell to 2.7% in August, down from 3.5% the previous month, marking the lowest reading in three years. Falling petrol prices and energy bill relief helped drive the slowdown. The jobless rate remained steady in August at 4.2%, with the number of unemployed people falling by 10,500 in seasonally adjusted terms. While spending may be down, our net worth rose for the seventh consecutive quarter. Total household wealth was 9.3% higher than a year ago, largely due to rising house and land values. Consumer confidence is also positive, with an increase in the ANZ-Roy Morgan index compared with last year’s figures.

The S&P/ASX 200 index hit an all-time high near the end of the month at 8,862 points, after reaching a low of 7,687 a few weeks earlier. It closed the month at a respectable 8,266, up 2.2% for the month and 7.89% for the year. China’s plan to stimulate its economy has led to stronger commodity prices, with mining and energy stocks being the main beneficiaries.

If there is something affecting your financial situation that you would like to discuss, please do not hesitate to reach out to our team.

Welcome to spring, a season that can inspire personal, business, and financial renewal. We hope you enjoy the sunshine and warmer weather.

Global stock markets—including the ASX—largely stabilised by the end of August after a turbulent month.

It was a rocky start, with global markets plummeting following news of high unemployment figures in the US and an interest rate move by Japan’s central bank. Despite the drama, the S&P/ASX 200 closed 1.28% higher for the month, marking a gain of just over 10% for the year to date.

A slight drop in inflation, down to 3.5% in July from 3.8% the previous month, had investors watching the Reserve Bank’s reaction. However, most economists agree that there’s little chance of an interest rate cut this year. The Reserve Bank of Australia (RBA) is not expecting inflation to reach its preferred levels until late 2026 or early 2027.

While the cost of living has dropped slightly, partly due to $300 federal government rebates on electricity bills, wages have risen. The Australian Bureau of Statistics reports that wages increased by 4.1% in the year to June, meaning that wages are now keeping pace with the cost of living.

The good news from the market and inflation data contributed to a small upswing in consumer confidence, although there is still much ground to recover after the losses caused by COVID-19.

If there is something affecting your financial situation that you would like to discuss, please do not hesitate to reach out to our team.

Many of us have been experiencing unexpectedly cold temperatures and high rainfall lately, but the good news is that spring is on the way. As the days grow longer and warmer, there is a sense of optimism and renewal.

Market watchers, investors, and mortgage holders, who had been anxiously awaiting the release of the latest inflation data at the end of July, found themselves neither jumping for joy nor collapsing in despair.

The best that could be said about the figures was that they were not as bad as they could have been. At its meeting on the 5^th of August, the Reserve Bank Board announced it was leaving the cash rate at 4.35% despite a modest increase in inflation. The Australian Bureau of Statistics reports that prices rose 1% in the June quarter and 3.8% annually.

Retail sales continue to sputter along, with the latest data showing a 0.5% increase in June, thanks to seasonal sales. However, over the quarter, retail sales volumes fell by 0.3%, marking the sixth decline in the past seven quarters. Meanwhile, building approvals fell by 6.5% in June, following a 5.7% rise the previous month.

The ASX S&P 200 index finished the month strong, with an increase of around 4%, despite a mid-month plunge. However, the Australian Dollar didn’t fare as well, falling below 65 US cents for the first time in almost three months. In the US, the S&P 500 ended the month nearly where it began, after a significant mid-month spike and subsequent fall. For the year to date, it has recorded an increase of almost 15%.

If there is something affecting your financial situation that you would like to discuss, please do not hesitate to reach out to our team.

Giving Australians better access to high-quality and more affordable financial advice is imperative.

One of the fundamental principles for achieving long-term investment success is planning.

In fact, the importance of having a clear financial plan, whether it’s formal or informal, can’t be overstated. As is the importance of sticking to it.

Without a well-documented, detailed plan that incorporates specific goals, there’s a fair chance investors will miss out on key opportunities over time, potentially lose their long-term focus and not attain the financial heights they had hoped to reach.

The consequences of this can range from feeling demoralised to experiencing devastating financial impacts, and it’s evident there’s a strong link between having a plan and individual confidence levels, especially in relation to retirement.

The importance of planning

To this point, Vanguard recently released How Australia Retires study found that Australians with the highest confidence about their future retirement were following a financial plan.

After surveying more than 1,800 working and retired Australians aged 18 years and older, they found that people who have a financial plan are six times more confident about their retirement outcomes than those without one.

Australians with the highest retirement confidence have taken the most purposeful actions to prepare for their retirement. Many have accessed professional financial advice, they’re relatively likely to use budgets and prioritise their savings, and they make regular extra contributions into their super.

Broadly speaking, they know what they need to do to achieve the retirement outcome they desire and are optimistic about entering this phase of their life.

By contrast, they found that Australians with a low confidence about their retirement tend to be the least actively prepared.

Often they’ve never accessed financial advice and they have little understanding of how they can achieve their retirement goals. They also expect to be more reliant on the Age Pension after they retire than those with higher retirement confidence.

In addition, they don’t tend to make regular additional super contributions and are generally less optimistic and more likely to feel disinterested, anxious or worried about this later phase of life.

This is typically the case for older Australians who’ve taken less action to prepare over time.

The role of super

Interestingly, only half of working-age Australians consider super an important component of their retirement plan and they expect to rely on it less than existing retirees.

As part of this, more than half of working-age Australians (54%) estimate their super balance constitutes half or less of their total investment balance.

Indeed, one in four working age Australians highlighted investment property as being a big part of their retirement plan. That compares with only one in 10 retired Australians having investment property as an asset.

But of concern is the fact that while super is an important component of total retirement assets, relatively few people actively engage with their super.

In many cases, super is the second-largest asset people have outside of their home. Yet, one in four Australians don’t know what their current super balance is, and one in two are unaware of what they’re paying in super fees.

And most Australians haven’t had any contact with their super fund, often because they rely solely on their employer’s compulsory contributions.

Increasing engagement

This is an area that really needs attention, and there’s a great opportunity for the super industry as a whole to step up their engagement with fund members.

For example, most Australians don’t really understand all of their available options when it comes to making personal contributions into their super account each year. Even making small additional contributions on top of employer contributions can have a big positive financial impact over time.

So can reducing fees, because higher fees equate to lower returns. Understanding what you’re paying in investment fees allows you to do a comparison with other providers and to potentially switch to lower-cost alternatives.

This is where financial advice can play a crucial role. There’s a strong correlation between the use of professional advisers and retirement confidence.

The survey found that of the Australians who have received professional advice, 44% indicated they were extremely or very confident in funding their retirement. Of those who have never sought any professional advice, only a quarter indicated they were confident.

Which is why giving Australians better access to high-quality and more affordable financial advice, that’s relevant to their specific needs, is imperative.

Financial advisers have an important role to play in terms of recommending the most appropriate investment options to individuals based on their needs, but also in terms of behavioural coaching. Having peace of mind is invaluable.

It’s never too early to engage a financial adviser to map out a financial plan that has the best chance of investment success over the long term, so contact us today, so we can help you on your financial journey.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

When life tosses up an unexpected event – such as retrenchment, a medical emergency or even just a big bill to fix the car – it can be nerve-wracking worrying about how to deal with the crisis. And, if funds are short, that just adds to the stress.

But imagine that you have a secret cash stash – an emergency fund – that will cover the costs, giving you the mental space to deal with the problem.

In fact, an emergency fund is the basis for a strong financial strategy and provides a crucial safety net. Regardless of your age or income, it makes sense because the unexpected can happen to anyone.

Without a cash reserve, you may have to rely on credit cards or loans, which can further strain your financial situation and mental health.

An emergency fund gives you the peace of mind to be able to weather the storms that come your way without racking up unwanted debt and interest payments.

How much is enough?

Of course, it can be tough to save when inflation is eating away at your income. Rising interest rates, rents and the cost of groceries are putting a big strain on households. The Australian Bureau of Statistics reports that household savings have declined for over a year as people contend with increased mortgage payments, among other rising costs.

Nonetheless, by putting aside even a small but regular payment into a separate fund you will slowly accumulate enough to cover emergencies.

The size of your emergency fund depends on your own circumstances, but an often-quoted target is enough to cover between three and six months of living expenses.

It may differ if say, you are planning on starting a family and need funds in reserve to cover the difference between parental leave payments and a salary; you have children in school and want to be able to cover school fees for a year or more, no matter what happens; you need to take time off work to care for a family member; or you need to make an unplanned trip.

On the other hand, if you have retired, having a buffer against market volatility can be helpful. If there is a market downturn and your superannuation is not providing your desired income level, a year’s worth of living expenses in an emergency fund can make all the difference to your lifestyle.

The main thing to remember is that if you need to raid your emergency fund, start work on rebuilding it as quickly as possible.

Building your emergency fund

Putting together a budget can help you to analyse how much you can afford to put away every week, fortnight or month. Then, consistently saving until you reach your goal is the key, no matter how small the amount.

It is best to keep your emergency fund separate from your everyday transaction account to reduce the chance of you using your saved funds for regular expenses. One option is to pay yourself first by setting up a direct debit, so your emergency fund grows automatically with no extra action needed from you, and to avoid the temptation to withdraw your savings.

The type of account you choose for your emergency fund is important. It should be readily available so, while shares and term deposits may offer higher returns, they are not quickly accessible when required. Shop around for a bank account that offers the highest interest to get the most out of your hard-earned income.

Building an emergency fund is essential to a strong financial plan, providing a safety net should something unexpected arise. If you are unsure of the best way to set up an emergency fund, we encourage you to contact us. We can provide guidance on the best options for your unique financial situation and help you take steps towards it.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

Debt is a common financial obligation that many people face. It refers to money borrowed from a lender that must be paid back over time, usually with interest. Debt can take several forms, including credit card debt, personal loans, and mortgages.

Managing debt can be a significant challenge, especially when drowning in a sea of bills and an increasing cost of living. High-interest rates, administration fees, and minimum monthly payments make it easy to feel your debt is out of control. However, with professional guidance from a financial adviser, you can take control of your debt and work towards achieving your long-term financial goals.

Understanding the various types of debt and the associated risks is important before taking on any new debt. For example, credit card debt often comes with high-interest rates, making it difficult to pay off quickly. In addition, personal loans may require collateral, including a home or car, to secure the loan.

Understand your budget and cashflow

A way to free up money and pay off debt is by reducing expenses. First, look at your monthly budget and identify areas to cut back.

Reducing expenses can be challenging, but it’s an essential step in managing debt effectively. Focus on what is a need vs what is a want. By freeing up more money, you can improve your cashflow and put more towards paying off your debts each month. The benefit is reduced interest payments as you pay the loan off faster.

Alternatively, increasing your income is another way to pay off debt faster. For example, consider a side hustle like driving for Uber or asking for a raise at work. You could also look to sell items you no longer need.

Another option is to ask your loan provider for a discounted rate – you don’t know if you don’t ask.

Create a debt management plan

To effectively manage debt, create a debt management plan. This plan should include all debts, including the outstanding balance, interest rate, time frame remaining and minimum monthly payment.

Once you understand your debt, you can create a strategy for paying it off. Your financial adviser can help you strategise your approach to repayments.

Consolidate your debts?

Having numerous debts can result in paying several administration fees and interest charges. Merging all your debts into one loan may lead to reduced interest and fees and assist in saving you money. In addition, consolidating your loans may make it easier to handle your debt as you will only have to make one payment rather than managing multiple loan repayments simultaneously.

Pay your debts on time

Time management is an important aspect of staying on top of and managing any debts. Ensuring that repayments are made on time can help you to avoid incurring late fees and added interest charges. The other downside of late payments is the impact on your overall credit rating, which may impact the ability to negotiate a lower rate or obtain a new loan.

Consider creating notifications that prompt you when your payments need to be made, or investigate if paying through direct debit would benefit you..

Stay motivated

Managing debt can be a long and challenging process, but staying motivated is important. Celebrate the small victories, such as paying off a credit card or loan, and focus on progress rather than how much you have left to pay. If charts help you achieve goals, plot the remaining loan and track it through to completion – note the original path of the loan and track with the additional payments to show the savings being made.

It’s also essential to avoid taking on new debt while working to pay off existing debt. Try living within your means and avoid overspending, even if it requires making sacrifices in the short term.

Managing debt requires a combination of strategies, including creating a debt management plan, reducing expenses, seeking professional help, and staying motivated. Taking proactive steps to manage your debt can improve your financial health and help achieve your long-term financial goals.

If you’re looking for professional guidance to manage your finances and investments, our team of financial advisers can help create a holistic plan to manage your debt, increase your savings, and achieve your long-term financial goals.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

Over the past month, we have seen the Reserve Bank of Australia (RBA) pause its seemingly endless increase in cash rates.

This increasing cash rate has been implemented to curb inflation. However, for many, this has just exacerbated the issue of making ends meet as interest rates on home mortgages, investment loans, car loans and personal loans significantly rise. Coupled with the increased cost of living for goods and services, much of the hard earned income is now consumed with little to nothing left over for other activities like a holiday.

The days of a near zero cash rate and low interest rates seem well behind us; hoping it will return there soon is unlikely. For those who took out loans over the past few years or are still working through repayment of previous loans, the question has now been posed, “should I sell assets to cover the debts and pay my bills?”

The answer is a resounding – it depends

Each person is different, and an individual’s financial position must be considered, which means the answer can change.

Selling assets such as investment properties, shares or downsizing the car can assist with a quick amount of cash that can reduce debt and give some much-needed breathing room to the weekly cash flow. With ever present credit card bills, loan repayments and the ‘after pay’ credit systems (and associated high interest rates) this may be very beneficial.

You may look to sell your investment property, pay the debt, and then invest the remaining equity in a different investment like shares or real estate income trusts (if you want to stay in property). Selling some shares can give that sudden cash injection needed.

On the surface, this seems like a great approach. Lowering the loan-to-value (LVR) ratio leads to better cash flow and the added benefit that lending institutions may consider refinancing at a lower rate if the LVR has been reduced (always ask – it does not hurt). So what are the potential downsides?

• Are you selling the asset at a bad time in the market and not optimising the asset value?
• Will selling the asset create a significant capital gain, offsetting the cashflow savings?
• Are you selling an income generating asset at the expense of tightening the budget and potentially impacting your long-term retirement goal for time of retirement or income in retirement?

Which asset is the right one to sell?

Each scenario is different and the assets and loans in play are different – there is no one answer.

The key is to make your decision an informed one. Your financial adviser is here to help discuss the situation, identify the pros and cons and help determine how the decision works with your financial goals and risk profile.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, visit our Personal Financial Planning services page or contact us today.