Planning for Retirement and Home Care Costs in Australia: What Families Should Know?

Retirement planning is no longer only about income, superannuation and everyday living costs. For many Australians, it also needs to include a realistic plan for future home care costs, as evidenced in a recent study conducted by McCrindle, which shows that almost nine in ten Australians aged 50 and above (87%) would prefer to live recieve support in their own home.

That matters because although many older Australians say they want to remain in their own homes as they age, far fewer appear to be financially prepared for what home care may actually cost. For families, that gap can create stress, uncertainty and rushed decisions at exactly the time when confidence matters most.

The introduction of Support at Home represents a change to the system, accommodating the growing ageing population and placing greater emphasis on participant co-contributions and transparency. It is becoming increasingly important to understand how care may be funded, which services may require co-contributions, and how to make every dollar count in retirement.

Why Home Care Costs Should Be Part of Every Retirement Plan?

Planning ahead for care is one of the most practical ways to protect choice later in life. Whether support is needed gradually or after a sudden change in health, families who have already discussed preferences and are financially prepared are often in a stronger position.

Our 2025 Just Better Care Retirement Report highlights an important tension. Many older Australians place a high value on independence and want to continue living in familiar surroundings, close to the people and communities they know. At the same time, many have not yet started setting aside money specifically for the cost of aged care in retirement.

That contrast matters. If staying at home is the preferred option, then understanding the likely cost of home care in Australia should sit alongside conversations about retirement income, housing, health and lifestyle goals.

What the Retirement Report Says About Preparedness and the Preference to Stay at Home?

Just Better Care’s retirement research found that many people approaching or living in retirement are thinking seriously about their health, independence, and not becoming a burden on their families. It also found that many have not actively saved for aged care, even though support needs often increase later in life.

At the same time, the report showed a clear preference for receiving care at home rather than moving into residential care. That is a powerful reminder that future planning should not stop at “Where do I want to live?” It also needs to answer, “How will I pay for support if I want to stay there?”

A respectful early conversation about care preferences, home care funding and possible co-contributions can reduce confusion later and help everyone plan with greater confidence.

Understanding Home Care Costs in Australia

There is no single answer to what home care will cost because it depends on a person’s needs, goals, eligibility, provider pricing and whether services are funded privately or through government-supported aged care.

Some people choose to pay privately for immediate flexibility, additional support hours or services outside their government-funded plan. Others access government-funded care, such as Support at Home, and may still be asked to co-contribute towards some services, depending on their financial circumstances and the type of support they receive.

That means retirement planning needs to allow for a mix of possibilities. A person may move between privately funded support, government-funded support, short-term services and additional out-of-pocket spending over time.

For this reason, families should avoid assuming that “government-funded” means “fully paid for”. It may still involve participant contributions, and needs may change over time, so comparing options is important.

How Support at Home Changes the Conversation About Retirement Planning?

The introduction of Support at Home has sharpened the focus on budgeting, transparency and participant contributions.

In practical terms, this makes it essential to think not only about how much support may be needed, but also how effectively the cost of that support can be managed over time. Families may need to consider whether superannuation, savings or other retirement assets will need to do more work in later life to support care needs at home.

The question is no longer simply whether people want to age in place. Many clearly do. The more pressing issue is whether they have a realistic plan to fund that choice over time.

Government Funding, Co-Contributions and Making Every Dollar Count

Support at Home is designed to help older Australians receive services in their own home, but participants may still need to contribute to the cost of some care. The amount can depend on the type of service, the person’s financial situation and their assessed needs.

Clinical care, under Support at Home, for example, currently attracts no co-contribution for ongoing services, but contribution rates vary for services related to independence or everyday living. That makes it important to understand how a care budget is being used and which services are drawing on personal funds.

For retirees on a fixed income, every decision matters. Choosing a provider, understanding service pricing, reviewing care needs regularly and asking the right questions about value can all make a meaningful difference over time.

Self-Managed or Supported: Which Option Is Right for You?

As families look for ways to stretch care budgets further, managing support with a user-friendly smartphone app and gaining greater visibility into their support and budget are becoming more attractive.

For others, a more supported option may be the better fit. This can be especially valuable when care needs are more complex, family members are time-poor, or the person receiving support prefers help with coordination, communication and day-to-day administration.

At Just Better Care, we can provide self-management, but we also know that no single model suits everyone. We often have detailed conversations with participants and families about which option best matches their circumstances, preferences, confidence and support network.

A self-managed approach is where the participant can manage some aspects of their care themselves, depending on their needs, preferences and capacity. However, under the Support at Home program, providers are still required to deliver and charge for core care management activities, even when a participant chooses to self-manage most of their support.

A supported approach may suit someone who values having more guidance, less administration and the reassurance of greater coordination and assistance in managing multiple services and providers.

Both options can have advantages and trade-offs. The most important question is not which model sounds best in theory, but which one is most likely to work well for the person’s real-life needs, well-being, and capability.

Advantages and Disadvantages of Self-Managed vs Supported Home Care

Both self-managed and supported will still require a care management component, which is a percentage to the provider for the ongoing management of support services.

The right choice depends on the individual. Many families value talking to their local Just Better Care office about both models before deciding.

How Families Can Prepare Now for Future Home Care Costs?

Even if care is not needed yet, there are sensible steps families can take now.

• Start the conversation early about preferences for living at home, support needs and who will help with decisions.
• Review retirement income, savings and superannuation with future care costs in mind.
• Learn the difference between private care, government-funded care and participant contributions.
• Compare providers carefully and ask how pricing, care planning and support options work.
• Revisit the plan regularly, especially after health changes, hospital stays or changes in family circumstances.

The earlier this planning happens, the more opportunity there is to make thoughtful decisions rather than reactive ones.

Planning Ahead Protects Choice, Independence and Peace of Mind

For many Australians, the goal of retirement is not simply to stop working. It is to keep living well, stay connected to their local community, the activities they enjoy, and in their own home for as long as possible.

Home care planning is ultimately about protecting independence and quality of life and being financially prepared for the future.