NICK BRUINING: What you need to know before signing aged care contracts as Higher Everyday Living Fees kick in

Thousands of aged care residents have started to receive new contracts and letters — in some cases, implying additional payments are mandatory.

Specialist aged care advisers are warning consumers not to sign anything until they fully understand their rights and obligations.

Residents are now receiving letters from providers explaining the new Higher Everyday Living Fee arrangements which come into play on November 1.

The HELF is an additional charge which pays for services and facilities beyond what is covered in the residential aged care contract.

Previously, a similar payment was known as an “additional services” fee. Those services might cover the costs of providing alcoholic beverages with meals, pay TV in the rooms, trips to the movies, and hair and beauty care.

In some cases, the resident themselves might not be able to make use of the extras, and in that case, the fee can be removed.

Specialist aged care financial planner Brenda Will said some providers were now sending out new HELF agreements in anticipation of next month’s changes.

“The agreements tend to be very long and can be confusing,” Ms Will said.

“It’s important to remember that the HELF is completely optional. Making it a condition of residency is illegal and can only be offered after the main contract, now called the service agreement, is signed.”

She recommends that if the fee is higher than they are prepared to pay for those additional benefits, residents can just opt out.

Some families who have contacted Your Money are concerned agreeing to the new fee triggers a reassessment of the entire aged care arrangement. They are concerned signing the new contract also exposes an existing resident to higher aged care costs.

Under the changes announced last year, a change in aged care arrangements could — under certain circumstances — trigger a reassessment under the new rules.

This includes higher ongoing care costs and the retention of up to 10 per cent of the Refundable Accommodation Deposit.

Existing residents who entered care before November 1, 2025 aren’t affected by the changes unless they choose to sign a new residential aged care contract or service agreement.

Residents who were in an aged care facility before the new rules kicked in are protected from all the November 2025 changes under “grandfathering” provisions.

Aged care placement specialist Lettie Ennis said normally, the new rules only applied when there was a resident-instigated change in accommodation.

“If you decide to change rooms to something more expensive or change providers altogether, then you might come in under the new rules,” Ms Ennis said.

For example, a person who decides to upgrade from a room with a shared bathroom to a room with an ensuite in the same facility might need to pay more. In this case, the new post-November 2025 rules could apply.

“If, however, there’s a clinical reason that the provider needs to move you, then the grandfathering rules will apply,” Ms Ennis said.

A clinical reason might include the need to move a resident from a normal room into another room designed for residents with dementia. In this case, they remain under the pre-November 2025 rules.

“Don’t be afraid to ask questions if you are unsure, and be confident that a provider can’t just kick you or a loved one out if you don’t think the HELF represents value for money,” Ms Will said.

Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association