Most aged care workers know salary packaging exists. Fewer know they sit in the most generous salary packaging bracket in Australia. And almost none know what happens when they apply for a home loan and a lender looks at their packaged income like it’s a problem.
Aged care salary packaging is worth understanding properly, because the dollar difference between using it well and using it poorly is not trivial.
Aged care salary packaging allows eligible workers employed by registered not-for-profit aged care organisations to direct up to $15,900 of pre-tax income toward approved living expenses each year, reducing their taxable income and increasing their effective take-home pay. This cap is higher than the $9,010 available to public hospital employees and represents one of the most valuable FBT concessions available to any Australian worker.
Why aged care workers get the highest salary packaging cap in Australia
The salary packaging benefit available to aged care workers comes from FBT (fringe benefits tax) exemptions that apply to registered charities and not-for-profit organisations under the tax rules administered by the Australian Taxation Office.
Most people assume nurses at public hospitals and aged care workers get the same deal. They don’t.
Public hospital employees access a general living expenses cap of $9,010 per year. Aged care workers employed by a registered charity or NFP organisation access $15,900 per year. That’s a $6,890 annual difference in pre-tax dollars you can direct toward approved expenses.
For an aged care worker earning $75,000 and paying a marginal tax rate of 32.5 cents in the dollar, packaging the full $15,900 cap saves approximately $5,168 in income tax per year. For a registered nurse working in an NFP aged care facility, that number can be higher depending on their salary band.
The catch: this only applies if your employer is a registered charity or NFP. Private for-profit aged care providers do not offer the same FBT concession. If you’re employed by a publicly listed aged care company, your packaging entitlement is likely limited to novated leases and other standard pre-tax benefits. Check with your payroll team before assuming you have access to the full $15,900.
What you can actually use aged care salary packaging for
The $15,900 general living expenses cap can be directed toward a surprisingly broad list of everyday expenses.
| Expense type | Eligible under general living expenses cap? |
|---|---|
| Mortgage repayments | Yes |
| Rent payments | Yes |
| Credit card repayments | Yes (for personal card purchases) |
| School fees | Yes |
| Utilities and household bills | Yes |
| Groceries and petrol | Yes (via approved card arrangement) |
| Holiday accommodation | Yes (within limits) |
| Investment loan repayments | No |
| Business expenses | No |
In practice, most aged care workers use the cap toward mortgage repayments or rent payments first, as these are the largest and most consistent household expenses. This is administered through your employer’s nominated salary packaging provider, typically Maxxia, RemServ, SmartSalary, or AccessPay.
On top of the $15,900 general living expenses cap, you also have access to a separate meal entertainment and venue hire cap of $2,650 per year. This is completely separate and doesn’t reduce your general living expenses entitlement. Most workers who have a meal entertainment card use it for restaurant meals, takeaway, and eligible work-related catering.
Combined, that’s up to $18,550 in pre-tax dollars annually, which is meaningful on any aged care salary.
For a practical look at how aged care home loan arrangements work alongside packaging, Healthcare Home Loans has a dedicated resource for aged care workers.
How aged care salary packaging affects your home loan application
This is where most aged care workers get a surprise, and not always a pleasant one.
When you apply for a mortgage, lenders assess your ability to repay based on your income. Most lenders use your gross taxable income as their starting point. Because salary packaging redirects pre-tax income outside your taxable wages, your ATO income statement shows a lower gross income figure than your actual total remuneration.
For a standard lender with no healthcare or NFP-specific assessment policy, this means your assessed borrowing capacity is calculated on a lower number than what you actually earn. Combined with the 3% serviceability buffer that APRA requires all authorised lenders to apply, this can reduce your assessed borrowing power by $30,000 to $90,000 compared to what a packaging-aware lender would calculate.
Some lenders, particularly those familiar with healthcare and NFP income structures, will add back packaged amounts before assessing serviceability. This approach reflects what you genuinely earn and what you’re genuinely capable of repaying.
Since the aged care cap is higher, lender assessment differences can have a greater impact on borrowing capacity. You have more to gain from finding the right lender, and more to lose from landing on the wrong one.
Estimate your borrowing capacity using Healthcare Home Loans’ calculator as a starting point, then speak to a broker who can model the lender-by-lender difference for your specific packaging structure.
The novated lease question for aged care workers
Many aged care workers use part of their packaging arrangement for a novated lease on a vehicle. It’s worth understanding how this plays out in a mortgage application before you renew.
A novated lease reduces your pre-tax income (which is the point of it), but most lenders treat the lease payment as an ongoing liability in their serviceability assessment. Think of it the same way a lender treats a car loan or a personal loan repayment. It comes off your assessed income as an expense, reducing borrowing power.
So a novated lease can affect your mortgage position in 2 ways. First, it reduces your taxable income figure further. Second, it appears as a liability in the lender’s expense model. Some lenders do not fully recognise salary packaging or novated lease arrangements. This can result in a lower borrowing assessment than your true financial position.
This doesn’t mean avoid novated leases. It means get the sequencing right. If your home loan application is within 12 to 24 months, model the impact before your next lease renewal. In some cases a standard car loan with no packaging interaction gives you a cleaner income profile for your mortgage, even if it costs slightly more in tax in the short term.
A broker who understands healthcare professional home loans can run both scenarios and show you the numbers before you commit.
Is aged care salary packaging worth it if you’re also trying to save a deposit?
Yes. Consistently. But the mechanism matters.
The most common concern is this: if salary packaging reduces your taxable income, does that affect your ability to demonstrate genuine savings for a deposit? Some aged care workers are told that salary packaging their mortgage or rent can affect the savings patterns lenders expect to see in bank statements.
In practice, most lenders looking at genuine savings assess your bank account history over 3 to 6 months. If your rent or mortgage is paid via salary packaging, that amount doesn’t appear as a direct debit from your transaction account. This can look, on the surface, like lower outgoings without corresponding savings growth.
The fix is documentation and lender selection. Documentation and lender selection both matter here. Some lenders accept salary packaging records as evidence of genuine savings behaviour, while others do not. Knowing which is which before you apply is the work your broker should do, not something you discover after a declined application.
Meanwhile, the tax saving from packaging is real and goes directly to your ability to build a deposit faster. The $5,000-plus saved annually on tax is money that can go to your savings account if you’re not yet at your deposit target. For aged care workers on modest base salaries, this is not a rounding error.
The First Home Buyer Guide from Healthcare Home Loans covers deposit strategy in more detail, including how income structure affects what lenders count as genuine savings.
What to do with your packaging once you have the mortgage
Many aged care workers who own their home direct their $15,900 general living expenses packaging cap toward their mortgage repayments. Mortgage repayments are usually one of the largest monthly expenses for homeowners. Using the cap this way can therefore create significant tax savings. The tax saving also applies to every dollar directed through salary packaging.
If your home loan is $500,000, you may be able to direct $15,900 of pre-tax income toward your repayments. This can reduce your effective repayment cost through tax savings. At a 32.5% marginal rate, that’s roughly $5,168 per year you’re not paying to the ATO.
There’s also a superannuation interaction worth being aware of. Salary packaging reduces your ordinary time earnings figure for the purposes of super guarantee calculations in some arrangements. Not all, but some. Ask your employer’s packaging administrator how your arrangement is structured before assuming your super contributions are unaffected.
According to ABS labour earnings data, aged care and residential care workers are among the lower-paid cohorts in the healthcare sector. The financial impact of the $15,900 packaging cap is often greater for aged care workers than for higher-income healthcare professionals.
