Why have my aged care costs risen over 30 per cent?

3 months ago 19

Opinion

December 3, 2025 — 5.01am

Many retirees aim to “retire with confidence,” but rising costs in retirement villages can make that harder than expected. Legislation in most states sets rules for how operators charge residents, and key fees are often capped to increase only by consumer price index (CPI). But there are loopholes: some charges are exempt, and operators can seek above-CPI increases through a special resolution.

This can give a false sense of security. In my village, total annual charges have risen about 31.5 per cent over the past three years – and it would have been higher if residents hadn’t voted down a proposed increase. A special resolution needs 75 per cent approval to pass, and in this case, it didn’t. So the question is: are retirement village residents really protected from large increases just because fees are “tied to CPI”?

For retirees in aged care, rising costs can start to weigh you down.

Aged Care Guru Rachel points out that the ongoing cost of a retirement village (often called a general service charge or recurrent charge) are subject to tight controls. While each of the state-based legislation has some differences the universal rule across them is that the ongoing fee must operate on a cost recovery basis.

Unfortunately, some of the costs within those budgets have been increasing by far more than anyone anticipated, one example is council rates – with councils deciding to change the way in which they levy villages, some residents have seen this cost alone increase by 400 per cent.

I don’t disagree that residents should understand their rights and where possible engage with the budget of expenses that drive these costs, but fundamentally it is not a profit centre for the operator, so increases are the result of increasing costs not increasing profits.

My wife and I have sold our house, and we are looking to take advantage of downsizer contributions of $300,000 and the “bring forward rule” for non-concessional contributions of $360,000 each. My concern is that my wife is 74, and I am 73. I am aware that no further voluntary super contributions can be made after age 75. Because we are still under the age of 75, can we take advantage of both the downsizer and the bring forward rule?

Provided you qualify to make a downsizing contribution under the rules, which includes owning your main residence for at least 10 years and making the contribution within 90 days of settlement you should be able to take advantage of the downsizing contributions.

The downsizing contribution can be made irrespective of your age (a lower age limit of 55 applies but no upper age limit) or present superannuation balance, and if the sale proceeds of your home is more than $600,000, then you can each contribute up to the $300,000 limit.

If your total superannuation balance last 30 June was below $1.76 million, and you are not within a bring forward period triggered previously, then you can make a non-concessional contribution of $360,000 this financial year. The same applies to your wife.

This means that making the most of both rules will enable you and your wife to contribute up to a combined total of $1.32 million to super.

You mentioned recently that instructing your attorney to transfer super into a savings account would help ensure non-dependant family receive maximum proceeds through the estate. I am also wondering if I were deteriorating in health and well before my demise, would I be able to do similar by instructing my super fund directly to transfer my entire super balance to my bank account?

Provided a fund member has reached the age of 60 and qualified for a condition of release, they can request a withdrawal of all or part of their superannuation whenever they wish. My reference to having the benefit withdrawn by the attorney is relevant if the member has lost capacity and cannot legally make the withdrawal.

I am a single home owner, age 67, on the full age pension. I stopped work at 60 due to health issues, and I am still paying off my mortgage. The pension is my only income. Is there a limit to how much I can have in super without affecting my full pension?

A single home owner can have $321,500 worth of assessable assets before they start to lose any pension. These include financial assets and personal assets like vehicles and household contents.

However, under the income test, a deemed rate of income is assessed from your financial assets (such as superannuation, shares and bank accounts). If your financial assets alone exceed $252,800, the deemed income will be more than the allowable income limit that enables you to receive the full age pension, meaning that your age pension will start to reduce, since the test that produces the lower entitlement is the one that prevails.

However, irrespective of whether you receive the full or part pension, you still get all the concessions that go with the age pension.

Noel Whittaker is author of Retirement Made Simple and other books on personal finance. Questions to: [email protected]

Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.