How much does aged care actually cost?
If you’re starting to consider residential aged care for your Mum or Dad, you’re probably wondering how much it will cost – and if they can afford it.
The Australian Government’s New Aged Care Act came into effect from 1 November 2025. The reforms include changes to the costs of permanent residential aged care. These costs apply to every aged care community across Australia.
The following costs apply to those entering residential aged care after 1 November 2025. If you were approved for, or accessing, a Home Care Package on 12 September 2024, you will pay fees under the 1 July 2014 arrangements – see fact sheet.
Fees and contributions you may pay
Before you enter permanent residential care, you should have your means assessed to see if you’re eligible for Australian Government assistance with fees and accommodation costs. The fees you pay will depend on the outcome of your means assessment and what you agree on with your aged care provider.
You may need to pay some, or all, of these fees:
- Basic daily fee
- Hotelling contribution
- Non-clinical care contribution
- Accommodation costs
Basic daily fee
All residents pay this fee for daily living services, including meals, cleaning, laundry and utilities. The maximum fee is set at 85% of the single basic age pension. This fee increases in March and September each year in line with the age pension. Based on current rates, the maximum basic daily fee is $65.55 per day.
Hotelling contribution
People who can afford to will contribute more towards their daily living costs through a hotelling contribution.
Services Australia will tell you if you need to pay a hotelling contribution and if so, how much you need to pay. This is based on your means assessment. The maximum amount changes with indexation in March and September. Based on current rates, the maximum hotelling contribution is $22.15 per day.
Non-clinical care contribution
People who need to pay the maximum hotelling contribution may also need to pay a non-clinical care contribution. This fee contributes to personal care costs such as bathing and mobility assistance.
Services Australia will tell you if you need to pay a non-clinical care contribution and if so, how much you need to pay. This is based on your means assessment. The maximum amount changes with indexation in March and September. Daily and lifetime caps apply. Based on current rates, the daily cap is $105.30, and the lifetime cap is $135,318.69. A four-year cap also applies to the non-clinical care contribution. The fee ceases after a person pays it for four years, even if they have not reached the lifetime cap amount.
Visit MyAgedCare.gov.au for current fee rates. You can also get an estimate of your aged care fees using the Aged care home fee estimator.
Accommodation costs
Room prices
How much you pay for a room at your chosen aged care community will depend on your means assessment.
If you are eligible for assistance, the government will pay some, or all, of your accommodation costs to your provider. If not, you will need to pay the room price.
Payment options
You can choose to pay your accommodation costs in one of three ways.
- Option 1: A lump sum refundable accommodation deposit (RAD) that is refunded when you leave care, less any retention amounts and any fees that you agree to draw down.
A refundable accommodation deposit (RAD) retention also applies – if you pay a lump sum, your provider keeps 2% of your lump sum per year. This amount is not refunded when you leave care. After 5 years in care, no further retention amounts will be deducted. - Option 2: A daily accommodation payment (DAP) that is not refunded when you leave care.
The interest rate used to calculate a DAP is called the Maximum Permissible Interest Rate (MPIR). This is set by the Government and reviewed quarterly.
Daily accommodation payment (DAP) indexing applies – if you pay by DAP, this amount will increase due to indexation on 20 March and 20 September each year. Indexation does not apply to daily accommodation contributions (DAC) paid by residents eligible for government assistance with their accommodation costs. - Option 3: Any combination of a RAD and DAP.
Until you pay a RAD, you will pay a DAP. You can pay a RAD at any time after you enter care.
A RAD payment is considered an asset for aged care purposes. This means it is counted in your means assessment and may affect your hotelling contribution and non-clinical care contribution.
If you choose a combination payment, you can choose to draw your daily payment from your paid RAD. Over time, this will increase your daily payment unless you top up the lump sum. Your provider may also agree to draw other fees from the lump sum, like your basic daily fee.
Confirm your fees with a means assessment
To confirm your aged care fees, you will need a means assessment where Services Australia or the Department of Veterans’ Affairs (DVA) assesses your income and assets. If you are a couple, they will assess half of your combined income and assets, regardless of who earns the income or owns the assets.
If you choose not to have your means assessed, you will not be eligible for assistance with your accommodation, and your provider can ask you to pay:
- The full hotelling contribution and non-clinical care contribution
- The accommodation room price
To complete a means assessment, fill in the Residential Aged Care Calculation of your cost of care form (SA457) or the Residential Aged Care Property details for Services Australia and DVA customers form (SA485). If Services Australia or DVA already have your financial details, you may not need to complete a form to have your means assessed. Check if you should complete an Aged care calculation of your cost of care form at ServicesAustralia.gov.au
Once your assessment is complete, Services Australia will send you a fee advice letter.
You should lodge your request for a means assessment as early as possible – even before you enter an aged care home. If your assessment is finished before you enter, the results are valid for 120 days unless there is a significant change in your circumstances.
More information
For more information, read our Aged Care Guide.
We have additional resources to help you with your aged care journey here. Read why residents love living at Bundaleer Aged Care here, and why our team members love working with us here.
Got questions?
We understand that residential aged care costs can be confusing. That’s why our knowledgeable and friendly team is here to help you. We’ll guide you through the options, answer your questions and help you at every stage. We can also arrange a private tour of our community.
Call us on (02) 6586 9400 or email us at info@bundaleer.org.au.