There’s genuinely good news arriving on 1 October: personal care under Support at Home becomes fully funded, saving many older Australians real money on help with showering, dressing and grooming. But there’s a catch that’s had far less attention. The reform is being paid for, in part, by cutting the private health insurance rebate for seniors, which could quietly raise costs for some of the same people. Here’s the plain-language guide to the full picture.
The Good News First
From 1 October 2026, personal care services under Support at Home move into the fully government-funded clinical category, meaning eligible participants no longer contribute toward help with bathing, dressing, grooming and continence. It’s a change advocates and older Australians pushed hard for, on the principle that fundamental, dignity-preserving care shouldn’t depend on your ability to pay.
The benefit is largest for self-funded retirees, who have been contributing the most toward personal care, up to around half the cost of some services. For them, this change removes a genuine expense from the household budget.
The Catch Most People Missed
Here’s the part that hasn’t made the headlines. The government has been open that the cost of these aged care reforms is being funded, in part, by changes to the private health insurance rebate for older Australians.
“The cost of these reforms is being paid from cuts to the Private Health Insurance rebate for seniors,” National Seniors Australia reported.
Specifically, the higher rebate that seniors have received, introduced to encourage more older people to take up private health insurance, is being returned to the same level paid to people under 65. In practical terms, that means a lower rebate, and therefore a higher out-of-pocket cost, for seniors who hold private health cover.
What This Could Mean for You
The impact depends on your situation. If you hold private health insurance and are over 65, the reduced rebate could increase the cost of your annual policy, by potentially hundreds of dollars a year, according to National Seniors Australia.
So for some older Australians, particularly self-funded retirees who both hold private health insurance and use personal care, there’s a genuine trade-off: you may save on personal care contributions from October, while paying more for your health insurance. For others, those who use personal care but don’t hold private cover, it’s a clear win with no offset. And for those who hold private cover but don’t use personal care, it may simply be a cost increase. The net effect varies person to person.
Why the Government Made This Choice
The rationale is about redirecting funding to where the need is most acute. The aged care system faces enormous pressure, long waits, workforce shortages, and rising demand, and the government has framed this as prioritising direct care funding over a health insurance rebate. Whether that’s the right call is a matter of genuine debate, but the logic is that the money does more good funding aged care directly than subsidising private health premiums for over-65s at a higher rate than everyone else.
Reasonable people will weigh that differently depending on their own circumstances, which is exactly why understanding the trade-off matters.
What to Do
A few practical steps. If you hold private health insurance and are over 65, check how the rebate change affects your premium, contact your insurer or review your policy statement so the increase doesn’t surprise you. Weigh the value of your private cover against its new cost, and consider whether your level of cover still suits your needs. If you use or will use personal care, factor in the saving from October on the other side of the ledger. And if the numbers are significant for you, it may be worth seeking financial advice, since the right answer depends on your full situation. General information is on My Aged Care.
The Bottom Line
Free personal care from 1 October is a real and welcome win, especially for self-funded retirees who’ve been paying the most. But it’s worth knowing it’s partly funded by cutting the private health insurance rebate for seniors, which could raise premium costs for some of the same people by hundreds a year. Check how the rebate change affects your policy, weigh it against the personal-care saving, and understand your own net position rather than assuming the news is all good, or all bad. This is general information, not financial or aged care advice.
Epik Wire covers aged care in plain language for older Australians and their families. Subscribe to our newsletter to stay informed.
