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Cost of aged care

Cost of aged care

How much does aged care cost?

Everyone’s needs and interests are different, so the cost of aged care will be different for everyone. Also, depending on your assets, you may or may not be eligible for government assistance.

To enter an aged care home, you need to have an ACAT (Aged Care Assessment Team) assessment and complete the Income and Asset assessment form from Centrelink if you choose to.

If you already have both, you’re well equipped to begin looking into aged care finances.

If you are missing either of these documents, our friendly team can point you in the right direction and assist completing the assessments.

What are the costs involved in Residential Aged Care?

There are 2 aged care costs to remember:

1. Care Fees – These are used to pay for your day to day living costs

2. Accommodation Payments – These cover the cost of your home

These two terms cover all the payments you need to make in aged care. There are different types of fees or payments in both of these that we’ll explain further down the page.

Cost of a Aged Care

How much do I pay in fees?

What you pay in care fees and accommodation payments will depend on your income and assets and the value of the home you’re purchasing.

To work out your income and assets, you will need to fill out some forms. Ask our friendly team for more information.

Care Fees

There are 3 types of care fees to remember when it comes to aged care services:

1. Basic Daily Care Fee – Everyone pays a basic daily care fee

2. Means Tested Care Fee – Some pay an additional means-tested care fee

3. Additional Services Fee – Some facilities require an additional services fee

Which do I pay and what are they for?

1. Basic daily fee

This covers daily living costs such as meals, power and laundry. Everyone can be asked to pay this fee and for some people, this is the only fee they need to pay.

No matter your income and assets, you will pay a Basic Daily Care Fee.

Note: The Department of Veterans’ Affairs (DVA) will pay the basic daily fee for eligible former Prisoners Of War (POW) and Victoria Cross (VC) recipients.


2. Means-tested care fee

If your income and assets are over a certain amount, you can be asked to contribute towards the cost of your care.

An income and assets assessment (from the Department on Human Services) will determine whether you pay the additional Means-Tested Care Fee.

Note: Eligible former POWs and VC recipients are exempt from paying a means-tested care fee.


3. Additional services fee

The Additional Services Fee is a fee where you pay for personalised services such as a newspaper delivered to your day or access to more TV channels. The availability of this will depend upon your chosen home

Cost of aged care

Accommodation payments


Under your accommodation payments, there are three ways you can pay for the home itself. These all cover the cost of your home, but the arrangement of how they are paid can vary.

1. Refundable Accommodation Deposit (RAD) - A one off lump sum accommodation payment that is fully refundable at the end of your stay, less any amounts you have agreed to have deducted. The refund is guaranteed by the Australian Government. It is paid 14 days after you have settled your estate.

You might see a home advertised with a RAD of $775,000 for example. This is the cost of the room that you could pay off in one lump sum.

2. Daily Accommodation Payment (DAP) - The accommodation cost converted into a daily payment, which is charged periodically at the Maximum Permissible Interest Rate (MPIR) set by the Australian Government. The MPIR is set when you enter the home so that you know your charges won't change. There is no refund at the end of your stay.

That home you saw advertised at $775,000? Well, depending on the Maximum Permissible Interest Rate at the time, this payment converted to a daily payment of approximately $85 a day.

3. Combination payment (RAD + DAP) - The accommodation cost paid by a combination of a Refundable Accommodation Payment (RAD) and a Daily Accommodation Payment (DAP). You can choose the RAD amount and we will calculate the remaining cost as a DAP.

That some home listed at $775,000 could, for example, split in half. So you could pay a one off lump sum of $387,500 and then pay off the rest daily at a rate of approximately $43 a day.

Remember: This is different to care fees which pay for your day to day living. Accommodation payment covers the cost of your home.

Still confused?


The first step is to get your income and assets test done and that way you will know what assistance you could get to assist pay for aged care. You can access that form here.

If you’re unsure about financial decisions such as the decision to sell your home before moving into aged care, it might be best to speak to a financial advisor to make sure you’re making the right call.

If you’re struggling with all of that and need help navigating the system, let’s do it together. Call our friendly team on 1800 778 767 to get started.