If a resident is required to contribute to their accommodation costs following a means assessment, they have up to 28 days after entering residential aged care to decide whether to pay a lump sum Refundable Accommodation Deposit (RAD), a Daily Accommodation Payment (DAP), or a combination of both.
If a RAD is chosen, the resident has up to six months after entry to pay the agreed amount. This provides time to sell assets if required. Until the RAD is paid, a DAP will apply based on the unpaid portion of the accommodation price. The DAP is calculated by applying the applicable Maximum Permissible Interest Rate (MPIR) to the unpaid balance of the accommodation price.
These payment options apply regardless of the resident’s care needs.
The example below shows how accommodation priced at $500,000 could be paid using both a RAD and DAP:
- RAD: $400,000
- DAP: $23.09 per day, based on the remaining $100,000 accommodation balance.
The DAP is calculated as follows:
- $100,000 × MPIR (8.43% as at 1 July 2026) ÷ 365 = $23.09 per day
Residents may elect to have any DAP payable deducted from their RAD balance. Where this occurs, the RAD balance will reduce over time and the DAP may be recalculated to reflect the changing RAD balance.
The maximum RAD that may be requested must leave the resident with at least the minimum permissible asset level prescribed under aged care legislation.
The accommodation payment arrangements that apply to you will depend on the date you entered residential aged care and any transitional provisions that apply.
For residents who entered care under the accommodation arrangements commencing on or after 1 November 2025, DAPs are subject to indexation twice yearly in line with legislative requirements. Residents will be notified of applicable indexation before it takes effect.
For residents who entered care under the accommodation arrangements commencing on or after 1 November 2025 and who pay a RAD, retention amounts may be deducted from the RAD in accordance with the Aged Care Act 2024. Retention amounts are calculated on the RAD balance at the rate prescribed by legislation and are generally capped after five years.
Upon leaving the service, the balance of the RAD will be refunded to the resident or their estate, less any amounts deducted in accordance with the resident’s agreement and the legislation, including any DAP deductions authorised by the resident and any applicable RAD retention amounts.
Approved residential aged care providers must publish the maximum accommodation price for each room type offered. This information must include the Refundable Accommodation Deposit (RAD), the equivalent Daily Accommodation Payment (DAP), and an example of a combination payment. Providers must also describe the key features of each room type.
Accommodation pricing information must be readily available on providers’ websites and in information provided to prospective residents and their representatives. It is also published on the My Aged Care website, allowing individuals and families to compare accommodation options and pricing across providers.
Accommodation prices above the threshold prescribed by the Australian Government, currently $789,686, require approval from the Independent Health and Aged Care Pricing Authority (IHACPA), acting through the Aged Care Pricing Commissioner.
Depending on an individual’s financial circumstances, the Australian Government may contribute towards their accommodation costs through government-funded accommodation support. Services Australia determines whether a resident is eligible for this support as part of the residential aged care means assessment.
Residents who are eligible for accommodation support may have all or part of their accommodation costs met by the Australian Government. Residents who are not eligible are responsible for paying the agreed accommodation price through a RAD, DAP, or a combination of both. The accommodation price payable is agreed before entry and documented in the resident agreement. Approved providers and residents may agree to an accommodation price that is lower than the published maximum accommodation price.
Aged care homes charge residents a basic daily fee as a contribution towards day-to-day living expenses such as meals, cleaning, laundry, heating and cooling. This fee is not means-tested. For new residents, the maximum basic daily fee that can be charged is set at 85 per cent of the single basic Age Pension rate.
The basic daily fee increases on 20 March and 20 September each year in line with increases to the Age Pension rate. From 20 September 2026, the basic daily fee is $68.93.
The amount you pay for residential aged care will depend on your individual circumstances, including your income and assets. These are assessed through a residential aged care means assessment conducted by Services Australia.
For eligible clients of the Department of Veterans’ Affairs (DVA), means assessments may be undertaken by DVA. Based on your means assessment, you may be required to contribute towards the cost of your accommodation, daily living services and care.
Contributions based on your means assessment
Hotelling Contribution
For residents on 1 November 2025 fee arrangements, the Hotelling Contribution is a means-tested contribution towards everyday living services such as meals, cleaning, laundry and other hospitality-type services. Whether you need to pay this contribution, and how much you may need to pay, is based on your means assessment completed by Services Australia.
Non-Clinical Care Contribution (NCCC)
For residents on 1 November 2025 fee arrangements, the Non-Clinical Care Contribution is a means-tested contribution towards non-clinical care and support services, including assistance with activities such as bathing, dressing, mobility and lifestyle programs. The amount you may need to pay is based on your means assessment and is subject to legislated caps.
Means Tested Care Fee
Residents who remain on 1 July 2014 fee arrangements may continue to pay a Means Tested Care Fee. This contribution is based on an assessment of the resident’s income and assets by Services Australia and contributes towards the cost of their care.
Estimating your aged care costs
The fee estimator available on the My Aged Care website can help estimate the fees and contributions that may apply when entering residential aged care. This estimate is a guide only. Your actual fees will be confirmed after your formal means assessment has been completed.
DVA pensions
People who receive DVA income support payments are generally assessed in a similar way to Age Pension recipients for aged care means-testing purposes. However, some DVA payments, such as the War Widow(er)’s Pension and DVA Disability Compensation Payments, are treated differently because they are compensation payments rather than income support payments.
While these payments are not themselves means-tested by DVA or Centrelink, they may be considered when determining assessable income for aged care means-testing purposes. Individuals should seek independent advice regarding their specific circumstances if they are unsure how their DVA entitlements may affect aged care fees.
Please note: Residential aged care fees are governed by Commonwealth legislation and may change over time. The fees and contributions that apply to each resident depend on when they enter care, their personal circumstances and the outcome of their government assessment. We recommend seeking independent financial advice and referring to My Aged Care for the most up-to-date information.
- Accommodation price list – Refer to attachment for each site in the Locations tab.
- Resources to help – The best information is available on the government website – My Aged Care.
- Seek independent advice – We strongly recommend that you seek independent advice regarding the financial aspects of residential care.