How much does residential aged care cost in Australia? Fees explained for families
- Louise Greene and Kerry Mann
There is no single number for the cost of aged care, and anyone who gives you one is guessing.
When a family calls and asks what residential aged care costs, we explain the same thing every time. There are four charges plus one optional fee, and what you actually pay depends on your financial circumstances, which are assessed by Services Australia. Everyone pays the basic daily fee. Two of the other charges are means tested. Accommodation is the largest and it is the one you may be able to negotiate.This article covers the rules that apply from 1 November 2025. If someone entered care before that date, different arrangements may apply and they may be protected under grandfathering provisions. Services Australia will confirm which rules apply to a particular person.
- Everyone pays the basic daily fee, set at 85 per cent of the single Age Pension, regardless of any other assessment.
- The room price is negotiated with the home. Know your budget before you start looking, not after you have fallen in love with a place.
- If you do not disclose your finances to Services Australia, you default to paying the maximum. That is a choice some people make, and it is worth understanding what it costs.
- The lifetime cap applies to the non-clinical care contribution only. There is no annual or lifetime cap on the hotelling contribution.
- The most expensive home is not necessarily the best home. Start with the person’s care needs, not the price list.
Written by Louise Greene RN and Kerry Mann, aged care specialists. Reviewed September 2026. Sources: the Schedule of Fees and Charges for Residential Care, My Aged Care and Services Australia.
The four charges · Accommodation · The optional fee · Disclosing your finances · What it costs now · What families get wrong · What to think about first
What are the four charges?
- The basic daily fee. Everybody pays it. It is set by the government at 85 per cent of the single basic Age Pension and it applies irrespective of any other assessment, so it is the same for every resident in every aged care home in the country. It covers everyday living costs: meals, cleaning, laundry, heating and cooling. It changes in March and September when the pension does.
- Accommodation. The price is set by the home, and it depends on the room. It is the largest of the four and it has its own section below.
- The hotelling contribution. A means tested contribution towards everyday living services. If your income and assets are below the threshold you pay nothing at all. Above it, you contribute up to a daily cap and the government pays the rest as the hotelling supplement.
- The non-clinical care contribution. A means tested contribution that helps cover the cost of everyday personal support this may include help with bathing and personal hygiene, mobility and lifestyle activities.
Whether you need to pay this contribution, and how much you pay, is determined by a means assessment of your financial circumstances.
Clinical care is not on this list. Nursing and allied health are fully funded by the government for everyone, regardless of income or assets.
The caps are worth understanding, because they are not the same. The non-clinical care contribution has a daily cap and a lifetime cap, and it stops entirely after four years in care, whichever comes first. Contributions paid under Support at Home count towards that same lifetime cap. The hotelling contribution has a daily cap but no annual or lifetime cap, so it continues for as long as you are in care.
How does accommodation work?
The home sets a price for each room, and the price depends on the room. A single room with an ensuite costs more than a companion room with a shared bathroom.
This part is a negotiation. Not everyone realises that. The advertised price is a starting point, and there is often room to move, particularly if a home has vacancies. Which is why it matters to know your budget before you start looking, rather than working it out after someone has decided which home they want.
Above a set threshold, a room price has to be approved by the Independent Health and Aged Care Pricing Authority (IHACPA).
Entry to residential care also requires an aged care assessment through the Single Assessment Service, which is separate from the financial side and costs nothing.
If you cannot afford to pay an accommodation price, the government covers it. That is the point of the means assessment. It works out whether you are a supported resident, and it is a fair and equitable way of doing it: what you contribute is based on what you have.
The assessment puts you in one of three positions.
Fully supported. The government pays your accommodation. You pay no room price, only the basic daily fee.
Partially supported. The government contributes and you pay the balance, as a daily accommodation contribution, or as a refundable accommodation contribution which reduces the daily amount.
Not supported. You pay the agreed room price in full.
If you are paying, there are three ways to do it and 28 days after entry to decide. Nobody can make you choose on the day.
A refundable accommodation deposit (RAD). A lump sum, like buying the room. The balance is refunded when the person permanently leaves care.
A daily accommodation payment (DAP). A daily amount instead, calculated from the room price using the government set Maximum Permissible Interest Rate (MPIR), fixed at the date the price is agreed. Like renting the room. Since 1 November 2025 these are also indexed twice a year.
A combination of both. Most families do this: part lump sum, part daily.
The part families miss
A refundable accommodation deposit is no longer fully refundable if you entered care from 1 November 2025. The provider deducts a retention amount of 2 per cent a year, for up to five years, so up to 10 per cent of the deposit in total.
On a $600,000 deposit held for five years, that is $60,000 that does not come back to the estate. It is not a reason to avoid paying a deposit, but it is worth knowing before you sign, particularly if a Will has specific bequests built around the value of a house that is about to become a RAD.
What is the Higher Everyday Living Fee?
The Higher Everyday Living Fe, usually shortened to HELF, is the one optional charge. It replaced what used to be called additional service fees and extra service fees.
You enter into it by agreement with the provider, and it buys a higher standard of amenity: barista coffee, à la carte meal choices, wine with meals, an expanded activities and entertainment program, newspapers, faster wifi. Some homes offer it and some do not.
It is genuinely optional. It cannot be made a condition of getting a room. If it is being presented as part of the package, question that.
It has to be agreed in writing, after admission. Not signed in the middle of moving day.
There is a 28 day cooling off period, and the arrangement is reviewed annually.
It cannot cover things that are already standard. A proper meal service is a mandatory minimum. A premium à la carte offering on top of it is a genuine extra.
And you cannot be charged for services the person will not use or cannot benefit from. Someone in a memory support unit paying for outings they will never take, or wine they no longer drink, is not what this fee is for.
What if you do not want to disclose your finances?
That is a choice you are allowed to make, and some people do make it. But it is worth understanding what it costs.
Services Australia works out your means tested amount from your income and assets, and everything above flows from that figure. If you do not provide the information, they cannot calculate it, and you default to paying the maximum.
The form is the SA457, the Residential Aged Care Calculation of Your Cost of Care. If the person already receives a means tested income support payment and owns their home, it is the SA485 instead. You can also apply online through a Centrelink account via myGov.
Do it before entry, so the cost of care can be calculated promptly.
Aged Care Specialist Officers at Services Australia can help you fill it in, in person, at no cost. Make an appointment. Most families do not know this exists and it is one of the more useful free services in the system.
And start with your own accountant, or whoever has been helping with the finances over the years. They already know the situation, and this is exactly the sort of thing they are good at.
What does residential aged care cost right now?
All figures below come from the Schedule of Fees and Charges for Residential Care and are current as at the date of this article. Rates are indexed on 20 March and 20 September each year, and the maximum permissible interest rate is reviewed quarterly, so confirm before you rely on them.
| Item | Amount |
| Basic daily fee | $66.80 per day |
| Hotelling contribution, daily maximum | $22.15 per day |
| Non-clinical care contribution, daily maximum | $107.32 per day |
| Non-clinical care contribution, lifetime cap | $137,917.01, or four years, whichever comes first |
| Maximum accommodation supplement | $72.30 per day |
| Maximum room price without pricing authority approval | $789,686 |
| RAD retention | 2 per cent a year, up to 10 per cent over five years |
| Maximum permissible interest rate | 8.43%, 1 July to 30 September 2026 |
| Income free area, single | $35,521.20 per year |
| Income free area, illness separated, each | $34,793.20 per year |
| Asset free area | $64,500 |
| Home exemption cap | $214,884.00 |
| Minimum assets you must be left with | $64,500 |
Different rates apply to people who entered care before 1 November 2025. Services Australia will advise the amounts that apply to them.
The My Aged Care fee estimator will give you a rough figure. The final determination is always made by Services Australia after a completed income and assets assessment.
What do families get wrong about the money?
Two things, and we see constantly.
The first is expecting it to be free. Australia has had Medicare since 1975, and people reasonably assume aged care sits inside it. It does not, and the discovery is genuinely disappointing.
It is worth sitting with that for a moment, because the disappointment is real and it is not unreasonable. But you pay for where you live now. You pay for your food, your power, your cleaning. Moving into an aged care home does not make those things free, and the government is already covering the whole cost of the clinical care, which is the expensive part.
Everybody is entitled to aged care in Australia, regardless of means. What the ability to pay gives you is more choice. More choice of room, and often more choice of home.
The second is comparing yourself to someone else. A neighbour paid this. A friend’s mother paid that. Someone at church says you should not pay a RAD.
None of it is relevant. Everybody’s circumstances are their own, and the only figure that matters is the one Services Australia calculates for the person you are supporting. Vague secondhand knowledge of what somebody else did is one of the more expensive things families act on.
What should you think about before you think about fees?
The care.
We understand why families race to the fees. It is the most frightening part, and it feels like the thing you can get a grip on. But working out affordability before you have worked out what the person actually needs is doing it backwards.
Start with their care needs, and the environment that will genuinely work for them. The staffing. The care model. How this particular person is likely to interact with that place and the people in it. If dementia is part of the picture, what to look for changes again.
The most expensive home is not necessarily the best home. We have seen families stretch for a premium room in a home that did not suit the person at all, and we have seen people settle beautifully into unremarkable buildings with excellent staff.
Once you know what you are looking for, the fees are just arithmetic. The other way round, they are a source of anxiety attached to nothing.
What should you ask before signing?
What are all the fees, in writing? The full breakdown, not a summary.
Which fees can change, and when? Some are indexed and move twice a year. Some are fixed at entry.
What is the retention on the deposit, and how is it calculated?
Is there room to move on the room price? It is a negotiation, and it is reasonable to ask.
What is included as standard, and what is the Higher Everyday Living Fee (HELF) actually buying? Ask specifically whether any of it is treated as a condition of the room.
What happens if the financial situation changes?
Can I see the residential agreement before deciding? You should be able to, and you have 28 days on the accommodation decision.
A reasonable provider will not object to any of this.
Frequently asked questions
How much does residential aged care cost in Australia?
There is no single figure. Everyone pays the basic daily fee, set at 85 per cent of the single Age Pension. On top of that, two means tested contributions and an accommodation payment may apply, and how much depends entirely on your income and assets as assessed by Services Australia.
Is a Refundable Accommodation Deposit (RAD) fully refunded?
Not anymore. Under the current arrangements (effective 1 November 2025) the provider deducts 2 per cent of the deposit a year for up to five years, so up to 10 per cent in total. The remaining balance is refunded when the person permanently leaves care.
Can you negotiate the price of a room in an aged care home?
Often, yes. The advertised price is a starting point and there is frequently room to move, particularly where a home has vacancies. This is why it helps to know your budget before you start looking rather than after someone has chosen a home.
What happens if you do not disclose your finances?
Services Australia cannot calculate your means tested amount, so you default to paying the maximum fees. Some people choose this, but it is worth comparing the two before deciding. The form is the SA457, or the SA485 if you already receive an income support payment and own your home.
Do you pay for clinical care in an aged care home?
No. Nursing and allied health are fully funded by the government for every resident in every home, regardless of income or assets. What some residents contribute towards is non-clinical care, meaning personal care such as bathing and mobility assistance, and that contribution is capped.
Is there a lifetime cap on aged care fees?
There is a lifetime cap on the non-clinical care contribution, and it also stops after four years in care, whichever comes first. Contributions paid under Support at Home count towards it. There is no annual or lifetime cap on the hotelling contribution.
The bottom line
The honest answer to what will this cost is that it depends on a means assessment, and until that is done nobody can tell you.
What you can know in advance is the shape of it. Everybody pays the basic daily fee. Clinical care is free. Two contributions are means tested, one of them capped for life and one of them not. Accommodation is the large one, it is negotiable, and you have 28 days to decide how to pay it.
Fill in the SA457 or SA485 before entry rather than after. Talk to your own accountant and financial advisor. Make an appointment with an Aged Care Specialist Officer if the form is daunting, because that help is free and most people never use it.
And do not start with the price list. Start with what the person needs, because the most expensive home is not necessarily the best home for them.
This is easier with real options in front of you. We build families a shortlist: homes that suit the person’s care needs and location, with the costs and the trade-offs of each one set out side by side. It turns an abstract fee structure into a straightforward comparison of what is actually available.
Ask us about a shortlist
Aged Care Conversations provides independent, commission-free aged care guidance and cost modelling. It does not provide financial, taxation, legal or medical advice.
Fees, thresholds and program rules are set by government and are indexed on 20 March and 20 September each year. Figures in this article are current as at the date shown above. Always confirm current amounts with Services Australia on 1800 227 475 or My Aged Care on 1800 200 422 before relying on them.
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