There are a number of costs associated with aged care homes, and getting an idea of how they impact your finances can be difficult. Here is a basic layout of your possible costs:
Aged care homes, like houses, come in all shapes, sizes, and prices. The challenge is finding the right option for your needs, budget, and preferences.
What costs might I have to pay?
Basic daily fee
Based on current rates, the maximum basic daily fee is $51.63 per day, or $18,844.95 per year.
This fee helps pay for your day-to-day services such as meals, cleaning, facilities management and laundry. Everyone is expected to pay a basic daily fee to cover these services.
The basic daily fee is 85% of the single person rate of the basic age pension. The government sets the price on 20 March and 20 September each year, changing in line with increases to the age pension. Prices are published on the Department of Health website.
You pay your basic daily fee directly to your aged care home, generally on a fortnightly or monthly basis. The fee applies for every day you are a resident, including days when you might be away overnight; for example, on holiday or in hospital.
Means-tested care fee
The means-tested care fee that you pay will be between $0 to $252.20 per day.
Not everyone will have to pay a means-tested care fee. The exact amount you will pay is determined through an income and assets assessment.
The means-tested care fee is an ongoing fee that you pay towards the cost of your personal and clinical care. Personal care can include help with bathing, dressing, grooming, and going to the toilet. Clinical care can include services like specialised nursing services, medication assistance, or catheter care.
Annual and lifetime caps
There are annual and lifetime caps on means-tested care fees. The maximum an aged care home can charge you is:
- $27,754.52 per year, or
- $66,610.90 in a lifetime.
Did you know?
If you are moving from home care into an aged care home, any income-tested care fee you paid while you were receiving care at home will also be counted towards the annual and lifetime cap if you move into an aged care home.
Each home sets its own pricing, depending on factors such as the location of the facility and the size of the rooms. The amount you pay for your accommodation depends on your eligibility for government help.
Government help with accommodation costs
If you can afford it, you are expected to pay for your room. However, help with some or all of the accommodation costs is available to those that need it. This is determined by an income and assets assessment, but as a general guide:
- if you have income below $27,460 and assets below $49,500, the Australian Government will pay your accommodation costs
- if you have income above $69,430 or assets above $169,079.20, you will need to pay for the full cost of your accommodation, negotiated and agreed to with the aged care home
- if you need to pay for part of your accommodation, the Australian Government will pay the rest.
More information on how the income and assets assessment is used can be found below, or you can read more on our Income and assets assessment page.
Self-funding your accommodation
If you’re not eligible for government assistance, the amount you pay will depend on:
- the type of room you choose
- your price negotiations with your aged care home.
The type of room you choose
If you are not eligible for government assistance, the price you agree to pay will vary depending on what type of room you choose. For instance:
- whether you choose a single or shared room, or opt to have a shared bathroom or ensuite
- the size of the room
- the geographical location of the aged care home.
While there is flexibility in how you pay for your accommodation, it’s still important to choose a room within your budget. You can find and compare room costs using the Find a provider tool.
Your price negotiations
Whether you have to pay towards your accommodation or not, everyone entering an aged care home needs to agree a room price in writing with their aged care home. Aged care homes are required to publish their maximum accommodation costs for their various rooms on this website. You and the home can negotiate and agree to a lower price, but you cannot be charged more than the maximum published price.
Do I have to pay the full cost upfront?
No, you have a choice as to how you can pay. The options available are:
- a lump sum (a refundable accommodation amount)
- If the government is helping with the costs, this is called a Refundable Accommodation Contribution (RAC).
- If you are paying the full amount yourself, it’s called a Refundable Accommodation Deposit (RAD).
- rental-style daily payments (a daily accommodation charge)
- If the government is helping with the costs, this is called a Daily Accommodation Contribution (DAC).
- If you are paying the full amount yourself, it’s called a Daily Accommodation Payment (DAP).
- or a combination of both (for instance, to make the total required of $300,000 you could choose to pay $100,000 as a refundable lump sum, and the rest through smaller non-refundable daily payments).
If you choose to pay an amount as a lump sum, any unused money is refundable when you leave the home.
How do I work out my costs?
You can get an estimate of what your costs may be using the tools on this website but to know your exact costs you’ll need an income and assets assessment.
You can use the fee estimator to get an idea of:
- The basic daily fee
- Your means-tested care fee
- Whether you may be eligible for assistance with your accommodation costs.
Then use the Find a provider tool to:
- See how much rooms cost
- Find a room that is within your budget.
There is also an income and assets checklist you can complete to get an idea of what financial information is taken into account.
You will need an income and assets assessment to find out exactly:
- Whether you are eligible for assistance with your accommodation costs
- What your means-tested care fee will be.
You can download the Income and Assets Assessment Form from the Department of Human Services (DHS) website, or call DHS on 1800 227 475 to request a printed copy. You can read more about this on our income and assets assessment page.
Did you know?
If you are on a means-tested government pension, you do not have to complete the whole Income and Assets Assessment Form. The form will outline the areas that you are to complete.
Once you complete the assessment you will receive a fee notification letter. The letter is valid for 120 days, so you have ample time to find an aged care home and enter into an agreement. It will outline:
- The basic daily fee, and
- The accommodation contribution, if any, or
- The means-tested care fee, if any.
Your fee notification letter is important. You should have the letter with you whenever you meet with potential aged care homes. The letter will advise if you are eligible for government assistance, or whether you can negotiate directly and pay the room price you agree to with the home.
Be aware of the additional things you could be charged for
Unlike your care and accommodation costs, the following fees are not covered by a government subsidy. This means if you agree to them you will need to pay all of them yourself.
Additional service fees
Many aged care homes offer additional hotel-type services that you have to pay for. These services may include things like a preferred brand of toiletries, access to paid TV services, or arranging a hairdresser.
Some homes allow you to pick and choose what additional services you would like so you only pay for what you use. Others may have a package of additional services they provide and some of them must be agreed to as a condition of living in the home.
Your home will be able to provide you with information on the additional services they provide, their associated costs, and whether they are mandatory services that come with living at the home. You will only be charged for additional services that you can make use of or benefit from.
Extra service fees
Some aged care homes have “extra service” status. This means that they can provide residents with a higher standard of hotel-type services (including specialised menus, higher quality linen or particular room furnishings). This extra service status can apply to the whole home or just to individual rooms.
Aged care homes with this status can charge a regular extra service fee, which pays for a bundle of extra services. If you agree to enter an extra service room, you will have to pay this fee, whether you use the full bundle of extra services provided or not. The fee will be covered in your Extra Service Agreement.
Extra service fees are not subsidised by the government. You will have to pay the full costs.
You can ask your aged care home if they have extra service status and whether they charge a fee or use the Find a provider tool. If your preferred home is an extra service place, ask for their list of bundled services. That way you will know exactly what you are entitled to receive for your extra service fee.
What if I can’t afford it?
If you are worried you might have trouble paying for your aged care home costs, you can ask to be considered for financial hardship. Read more about getting financial help on the financial hardship page.