Means testing for residential and home aged care in Australia determines how much you contribute toward the cost of your care and accommodation, based on your income and assets. This 2026 guide explains how the assessment works, what thresholds apply, and where to find the authoritative figures that affect your situation.
What is aged care means testing and why does it matter?
When an older Australian enters a residential aged care facility or receives support through a Home Care Package, the government assesses their financial circumstances to work out how much they are expected to contribute. This process is called means testing, and it affects the fees you pay on top of any basic daily care fee.
Means testing is not a barrier to care. Everyone who is assessed as needing aged care through My Aged Care remains entitled to receive it. However, the amount you pay varies considerably depending on your income, savings, superannuation balances, and the value of any assets you hold, including real property. Understanding this early helps families plan ahead with greater confidence.
The assessment is conducted by Services Australia, which calculates your means-tested amount and communicates the result to your aged care provider. If your circumstances change, you can request a reassessment.
How income and assets are assessed
The means test for residential aged care combines an income assessment and an assets assessment into a single calculation. The result is known as the means-tested care fee, which is a contribution toward your ongoing care costs.
For the income component, Services Australia looks at income from pensions, superannuation drawdowns, financial investments, and other regular sources. For the assets component, assessors consider bank accounts, shares, managed funds, property other than the family home in some circumstances, and other holdings.
The family home receives special treatment. Whether it is counted as an asset depends on circumstances including whether a protected person, such as a spouse, dependent child, or carer, continues to live there. You can find detailed guidance on how the home is assessed at Services Australia.
It is worth noting that the rules around assets and income thresholds are updated periodically, and the specific figures that apply to your situation in 2026 should be confirmed directly with Services Australia or a qualified financial adviser who specialises in aged care.
Residential aged care fees explained
There are several distinct fee types in residential aged care, and means testing affects some but not all of them.
Basic daily care fee - This fee is paid by essentially all residents and is linked to the Age Pension rate. The current amount is published by My Aged Care and updated regularly. Means-tested care fee - This is the contribution determined by your means assessment. There are annual and lifetime caps on the total amount you can be asked to pay. These caps protect people from unlimited liability and are indexed over time. Current cap figures are listed at Services Australia. Accommodation costs - Depending on your means, the government may pay part or all of your accommodation cost, or you may be asked to contribute in full. You can pay as a refundable accommodation deposit (RAD), a daily accommodation payment (DAP), or a combination of both. The published maximum accommodation prices approved by the government are listed on the My Aged Care website. Extra service fees - Some facilities charge additional amounts for premium amenities. These are not subject to means testing.For those researching specific providers, you may find our cost guide helpful for understanding how these fees fit together in practice.
Home Care Package means testing in 2026
Home Care Packages also involve a means-tested contribution, though the structure differs from residential care. Recipients may be asked to contribute an income-tested care fee, which is assessed on income alone rather than on both income and assets.
There are daily and annual caps on these contributions as well. People receiving a full Age Pension, for example, are not asked to pay an income-tested care fee, while those with higher income levels contribute more. The current thresholds and caps are maintained by Services Australia and updated at regular intervals throughout the year.
Importantly, the aged care system in Australia underwent significant structural reform in recent years, with the Support at Home programme replacing the previous Home Care Packages programme. It is important to verify the current rules that apply to your package type, as transitional arrangements may affect how means testing applies to your specific situation. The My Aged Care website provides up-to-date information on these changes.
Recent reforms and the 2026 framework
Australia's aged care system has been subject to substantial reform following the Royal Commission into Aged Care Quality and Safety. The legislative framework is grounded in the Aged Care Act 1997 and associated instruments, and amendments have continued to reshape how funding, assessment, and means testing operate.
In 2026, providers and consumers are operating under a system that places greater emphasis on transparency around fees, stronger protections for residents, and a clearer relationship between individual contributions and the cost of care. The Aged Care Quality and Safety Commission oversees quality standards and provider compliance, while Services Australia administers the financial assessments.
If you are comparing providers, our independent directory of best aged care providers in Sydney and across other regions can help you shortlist quality-assessed facilities before you investigate costs in detail.
How to apply for a means assessment
The process for requesting a means assessment is straightforward. You or someone acting on your behalf can contact Services Australia directly, or access the assessment form through the My Aged Care portal. You will need to provide details about your income sources and assets, and in most cases the assessment is completed within a reasonable timeframe.
It is strongly recommended that you seek independent financial advice from an aged care specialist before completing your assessment, particularly if you own property, have a spouse still living at home, or hold significant superannuation assets. The assessed amount can have meaningful long-term financial implications, and a qualified adviser can help you understand your options.
Our methodology explains how we evaluate and rank aged care providers listed in our directory, including how we account for fee transparency.
What if you disagree with the assessment outcome?
If you believe your means assessment is incorrect, you have the right to request a review. Services Australia has an internal review process, and if you remain dissatisfied, further avenues are available. Documentation of your income and assets is critical when seeking a review, and keeping records of all correspondence is advisable.
The Aged Care Quality and Safety Commission handles complaints about care quality and provider conduct, while financial assessment disputes are managed through Services Australia and, if necessary, the Administrative Review Tribunal.
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Frequently asked questions
Q: Does the family home always count as an asset in the means test? A: Not always. Whether your home is included depends on your circumstances, such as whether a protected person continues to live there. You should check the current rules with Services Australia or a qualified adviser. Q: Are there limits on how much I can be asked to pay in means-tested fees? A: Yes. There are both annual and lifetime caps on means-tested care fees for residential aged care. The current figures are published at Services Australia and are indexed periodically. Q: Does my superannuation affect the means test? A: Superannuation can be assessed as either income or an asset depending on your age and whether you have commenced drawing from it. The rules are detailed and situation-specific, so professional advice is recommended. Q: What happens if my financial situation changes after the assessment? A: You can notify Services Australia of changes to your income or assets and request a reassessment. It is important to report changes promptly, as failing to do so may affect the accuracy of your fees.---
Sources
- My Aged Care - Services Australia - Aged Care - Aged Care Quality and Safety Commission - Australian Institute of Health and Welfare - Aged Care - Aged Care Act 1997 - Federal Register of Legislation
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Information in this article is general only and not personal advice. Verify the details with the linked sources or an appropriately qualified Australian professional before relying on them.
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