Aged care fees in Australia are made up of several components — a basic daily fee, a possible means-tested care fee, and accommodation costs — and understanding how each is calculated can help you plan with confidence. This guide explains each fee type, who is likely to pay what, and where to find authoritative, up-to-date figures from the relevant government sources.
Understanding your aged care fees: basic daily fee, means-tested fee, accommodation — 2026 AU guide
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What are the main types of aged care fees?
When you or a loved one moves into residential aged care in Australia, the costs involved can feel overwhelming at first. Fortunately, the fee structure is organised into distinct categories, each governed by rules under the Aged Care Act 1997 and administered by the Australian Government.
There are three primary cost categories you need to understand:
- Basic daily fee — a contribution towards everyday living costs such as meals, laundry, and amenities - Means-tested care fee — an additional contribution toward the cost of your personal and clinical care, based on your financial circumstances - Accommodation costs — payment for your room, which can be structured as a lump sum, a daily payment, or a combination of both
There are also potential extra service fees charged by some providers for lifestyle or premium room options, though these are separate from the regulated fee structure. For a deeper dive into overall costs, see our cost guide.
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The basic daily fee: what it covers and who pays it
The basic daily fee is charged by all residential aged care providers in Australia. It is intended to cover the day-to-day costs of living in a facility — think meals, linen, heating, cleaning, and general maintenance of the home environment.
The maximum amount a provider can charge for the basic daily fee is set by the Australian Government and is linked to the single person rate of the Age Pension. Because this link means the fee can move each time pension rates change, you should always check the current maximum directly with Services Australia or My Aged Care rather than relying on any figure quoted in a secondary source.
Almost all residents in permanent residential aged care will be asked to pay the basic daily fee. Providers are permitted to charge up to the government-set maximum but may charge less. It is worth asking each facility what they charge, as some providers do discount for particular circumstances.
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The means-tested care fee: how your finances affect what you pay
The means-tested care fee is where things become more personal. This component is calculated after the Department of Social Services and Services Australia conduct a means assessment of your income and assets. The intention is that those who have greater financial capacity contribute more toward the cost of their care, while those with fewer resources are protected.
The assessment considers your income streams (including superannuation, investments, and any rental income) as well as your assets (which may include the value of your former home, depending on your circumstances). The Services Australia website contains detailed guidance on how the assessment is conducted and what is included or exempt.
There are annual and lifetime caps on the means-tested care fee, which means that once you have paid a certain cumulative amount, you are no longer required to continue paying this component. Because these caps are indexed and updated periodically, always verify the current figures at My Aged Care before making financial decisions. If you do not complete a means assessment, you may end up paying the maximum means-tested care fee by default, so it is strongly advisable to engage with the process early.
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Accommodation costs: refundable deposits, daily payments, and combinations
Accommodation costs are arguably the most complex part of aged care pricing. You have several options for how to pay for your room, and choosing the right structure depends on your personal financial situation.
Refundable Accommodation Deposit (RAD): This is a lump-sum payment made to the provider. Importantly, the RAD is refundable — meaning the full amount is returned to you or your estate when you leave or pass away, less any agreed deductions. The RAD amount for each room must be published on the My Aged Care Find a Provider tool and agreed to in writing before you move in. Daily Accommodation Payment (DAP): If you prefer not to pay a lump sum, you can pay a daily rental-style amount instead. The DAP is calculated using the Maximum Permissible Interest Rate (MPIR), which is set by the government. The current MPIR can be confirmed via My Aged Care or Services Australia. Combination: You can also pay part of the RAD as a lump sum and cover the remainder through ongoing daily payments. This flexibility can be helpful for people who want to preserve some liquidity while still reducing their daily costs.Providers are required by law to publish their room prices, and you can compare these across facilities using the My Aged Care website. For regional guidance on finding quality providers, explore our listings for best aged care providers in Sydney.
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Government support: when fees are reduced or waived
Not everyone pays the full range of fees. The Australian Government provides financial hardship assistance to people who genuinely cannot afford their aged care costs. If your means assessment shows you have limited income and assets, you may be classified as a supported resident, in which case the government contributes to your accommodation costs on your behalf.
Supported residents are placed in accommodation funded partly or wholly by the government, and providers who accept Commonwealth funding are required to maintain a certain proportion of supported resident places. For eligibility information, visit My Aged Care or contact Services Australia.
The Australian Institute of Health and Welfare also publishes periodic reports on aged care use and funding patterns that can provide broader context, although individual eligibility questions should always be directed to the relevant authority.
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Changes to the aged care system in 2026
Australia's aged care system has undergone significant reform in recent years following recommendations from the Royal Commission into Aged Care Quality and Safety. Legislative and regulatory changes have progressively been implemented, including amendments to how fees are calculated, assessed, and capped.
Given the pace of change, it is particularly important in 2026 to verify that any information you read — including general guides like this one — reflects the most current rules. The Aged Care Quality and Safety Commission is the independent regulator overseeing provider standards, while My Aged Care remains the central government portal for fee information, assessments, and provider searches.
If you are planning ahead for yourself or a family member, engaging a registered aged care specialist or financial adviser with experience in aged care matters is a practical step. See our methodology for how we assess and evaluate information in this space.
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Practical steps to take before you commit
Before signing any aged care agreement, consider taking the following steps:
1. Request a fee disclosure statement from the provider in writing before agreeing to anything 2. Complete your means assessment with Services Australia as early as possible — delays can create uncertainty 3. Compare room prices across multiple providers using the My Aged Care Find a Provider tool 4. Speak with a financial adviser who specialises in aged care — they can model different accommodation payment scenarios for your situation 5. Read the Resident Agreement carefully, as it is a legally binding document that sets out all fees and conditions
No single fee structure suits every person, and the right combination of RAD, DAP, and care contributions will depend on your individual income, assets, health needs, and preferences.
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FAQ
Q: Is the basic daily fee the same at every aged care facility? A: No. While the government sets a maximum, individual providers may charge less. Always ask the specific facility what they charge and request it in writing. Q: What happens to my Refundable Accommodation Deposit if the provider closes? A: RADs are protected under Australian law. The government guarantees repayment of RADs if a provider fails. More information is available through My Aged Care. Q: Do I have to complete a means assessment? A: It is not strictly compulsory, but if you do not complete one, you may be charged the maximum means-tested care fee by default. Completing the assessment with Services Australia is almost always in your financial interest. Q: Can a provider charge me more than the published room price? A: No. Providers are legally required to publish their room prices and cannot charge above what has been agreed and disclosed. The Aged Care Quality and Safety Commission oversees compliance with these rules.---
Sources
- My Aged Care - Services Australia — aged care fees and charges - Aged Care Quality and Safety Commission - Australian Institute of Health and Welfare — aged care - Aged Care Act 1997 — Australian 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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