Overview
Chapter 4 explains the requirements and processes for calculating contributions, funding and subsidies in the aged care system. This includes information about:
- the contributions, usually as a subsidy, from the Australian Government for aged care services
- individual contributions from the older person towards the cost of the services they receive, based on means testing
- how the department works out means testing and how this affects what someone might need to pay.
Funding a sustainable aged care system
The Aged Care Act 2024 (the Act) and the Aged Care Rules 2025 (the Rules) set out the funding model for the aged care system. The model helps to make sure the aged care system is sustainable, while putting the rights and needs of older people at its centre.
Funding for the aged care system is based on:
- subsidies from the government
- grants for specific programs or to meet specific needs
- means-tested contributions from older people.
This chapter gives an overview of the funding model for aged care. It outlines the general methods from the Act used for means testing and working out subsidies and individual contribution amounts. It doesn’t include full calculations or complex examples. These details are in the Act and the Rules. The Explanatory Memorandum of the Act provides an explanation about how means testing, subsidies and contributions work. There are also resources to help explain and work out the funding calculations, including on the My Aged Care website.