The new Aged Care Act has started on 1 November 2025. To support the transition to the new Act, we are upgrading some website tools. You can read more or contact My Aged Care on 1800 200 422 for general information.
If you are moving into an aged care home for permanent residential aged care, it’s important to understand what fees you may have to pay and whether you are eligible for government assistance with your accommodation costs.
It’s a good idea to do this before you choose your aged care home. This information can help you make the right choice for your care needs and financial situation.
If you’re thinking about entering an aged care home or changing your current fee arrangements, a helpful first step is to get independent financial advice.
One of 2 different types of fee arrangements apply if you enter residential aged care on or after 1 November 2025. These may include the following fees and contributions:
1 November 2025 fee arrangements – basic daily fee, hotelling contribution, non-clinical care contribution, higher everyday living fee
1 July 2014 fee arrangements – basic daily fee, means tested care fee, higher everyday living fee.
Additionally, if you were receiving a Home Care Package or approved and waiting for a package on or before 12 September 2024, and you subsequently move into residential care, you are protected by the ‘no worse off principle’ and will pay fees under the 1 July 2014 fee arrangements. Otherwise, you will be on the 1 November 2025 fee arrangements.
In addition to these fees and contributions, everyone entering permanent care in an aged care home may be asked to pay towards their accommodation costs.
What fees might I have to pay?
The types of fees and how much you pay will depend on:
your fee arrangements based on your entry date and circumstances
your income and assets, as assessed in your aged care means assessment
the aged care home you choose
the room price you negotiate with your provider.
The different types of fees you may have to pay are:
This is an amount that all aged care home residents pay for the daily living services they receive at the home, including meals, cleaning, laundry and utilities. Everyone pays this fee.
Hotelling contribution: This is an additional contribution that some people on 1 November 2025 fee arrangements pay towards daily living services such as meals, cleaning and laundry.
Non-clinical care contribution (NCCC): This is an amount that some people on 1 November 2025 fee arrangements pay to cover personal care, such as bathing, mobility assistance, and lifestyle activities.
Means tested care fee: This is an amount that some people on 1 July 2014 fee arrangements pay toward the cost of their care.
This is an amount that some people pay to contribute towards or cover the full costs of their room, depending on their means assessment.
Higher everyday living fee
Some providers offer higher quality services for an additional fee, called a higher everyday living fee. You cannot be asked to agree to pay a higher everyday living fee until after you have entered care.
Aged care home costs and fees if you entered care before 1 November 2025
If you moved permanently into an aged care home on or before 31 October 2025, your current resident fees and accommodation costs will stay the same while you remain in care – unless you opt in to the 1 November 2025 fee arrangements. For instance, if you pay a means tested care fee, you will continue to do so.
Before choosing an aged care home, it’s important to understand how the different fees work for residents.
Every aged care home resident pays a basic daily fee, regardless of their means. This fee helps pay for daily living services such as meals, cleaning, facilities management, and laundry. You pay this 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.
The basic daily fee is set at 85% of the single person rate of the basic age pension. The government indexes it on 20 March and 20 September each year.
Based on current rates, the maximum basic daily fee is $65.55 per day, or $23,925.75 per year.
The government pays a hotelling supplement to providers, which tops up the basic daily fee to cover the cost of daily living services. The hotelling supplement is means tested and indexed in March and September each year. Your income and assets (means) will be assessed to work out if you need to contribute towards it in the form of a hotelling contribution.
The contribution will be up to a limit of the hotelling supplement, $22.15 per day. If you are asked to contribute part but not all of the hotelling supplement, the government will pay the rest. For example, if you are asked to pay $2 per day towards your hotelling supplement (based on your means assessment), the government will pay the remaining $20.15.
If your income and assets are below the thresholds, the government will continue to pay the full hotelling supplement. If you need to pay a hotelling contribution, Services Australia will let you and your provider know the amount once you enter care.
If your means assessment resulted in you paying the full hotelling contribution, you may also be asked to make a contribution towards your non-clinical care.
Your contribution covers non-clinical care costs such as bathing, mobility assistance, and lifestyle activities. The non-clinical care contribution is similar to the means tested care fee. However, it excludes a person’s cost of clinical care and is capped daily at $105.30 per day, while the means tested care fee is capped annually.
If you need to pay the non-clinical care contribution, Services Australia will let you and your provider know the amount once you enter care.
A lifetime cap means that residents no longer have to pay the non-clinical care contribution once they reach $135,318.69 (indexed) in total contributions, or after 4 years of cumulative contributions — whichever comes first. Fees paid under the Support at Home program also count towards this lifetime cap.
This is a contribution that some people pay towards the cost of their personal and clinical care. The amount is determined through a means assessment.
The means tested care fee is different for everyone, and not everyone has to pay it. If you do need to pay it, Services Australia will let you and your provider know the amount once you enter care.
Your means tested care fee will be between $0 and $403.80 per day. In addition, annual and lifetime caps apply. The maximum amount of means tested care fee you can be asked to pay is $35,238.11 per year, or $84,571.66 in your lifetime. These caps change with indexation in March and September.
Everyone entering an aged care home needs to agree on a room price in writing with their provider before they enter care. From 1 November 2025, this is done as part of entering into an accommodation agreement; the date the accommodation agreement is signed is the price agreement day.
If you can afford it, you are expected to pay for your room. However, for those with less means, the government will pay some or all of your accommodation costs. Whether or not you need to pay the agreed amount will depend on your means assessment. As a general guide:
If you’re not eligible for government assistance with your accommodation costs (not low means), you will pay the room price you agreed to with your aged care home as an accommodation payment.
If you are eligible for government assistance (low means), the government will pay some or all of your accommodation costs to your provider. You will be asked to pay an accommodation contribution if the government does not pay the full amount.
The amount you contribute is worked out by Services Australia based on your income and assets.
If you have income below $34,762.00 and assets below $63,000.00, the Australian Government will pay your full accommodation costs. These income and asset amounts change with indexation and are up to date until 19 March 2026.
What are my accommodation payment options?
You have 3 options to choose from to pay for your accommodation:
a refundable lump sum amount
non-refundable daily payments, or
a combination of both.
Refundable deposit retention arrangements and daily accommodation payment indexing arrangements may apply.
For detailed information about the different accommodation payment options, how each option works, and how to work out your costs, visit the Understanding aged care home accommodation costs page.
How is my means status determined, and can it change?
Your status as low means or not low means determines what type of accommodation costs you pay (payment or contribution). It is set based on your income and assets at your date of entry to an aged care home. Your means status does not change while you remain in the same home, regardless of how your financial circumstances may change after entry. However, if you move to a new aged care home, you will need a new means assessment. When that happens, your means status and type of accommodation costs may change.
If your means increase after you have entered care (including if your family pays a refundable lump sum for your accommodation), it will not change your means status or the type of accommodation costs you pay. However, it may increase your hotelling contribution, NCCC, means tested care fee and/or accommodation contribution amount.
Higher everyday living fee
From 1 November 2025, a new optional fee, the higher everyday living fee, enables aged care home residents to pay for and receive a higher standard of services.
The higher everyday living fee replaces the previous extra service fee and additional service fee arrangements.
A higher everyday living fee must not be agreed or charged before you have entered care, and it cannot be used as a condition of entry or to secure a room.
A higher everyday living fee agreement must be in place and must outline the cost of each higher or additional service to be delivered, the standards and frequency at which they will be delivered, and how they will be charged.
You should not be asked to pay for a service that you cannot or will not use. This does not prevent a bundle from including a service that you cannot use, but you must not be worse off than if you paid only for the services you can use.
There is a 28-day cooling off period. This means you can cancel or vary your higher everyday living services within this period without a cancellation fee. Your provider needs to be notified of this, but there is no minimum notice period.
After the initial 28-day cooling off period:
if you choose not to use the service, or are no longer able to use the service, it can be cancelled or varied with 28 days’ notice
in some instances, your provider can pass on expenses incurred beyond the 28-day period if they are unavoidable (for example, subscription fees), but for no more than 90 days.
If your provider can no longer deliver the service it must be cancelled or varied immediately.
Your higher everyday living fee agreement must be reviewed at least once a year to ensure you still want the services.
What does the government contribute?
The government subsidises aged care homes across Australia to provide affordable, accessible care. Residential care subsidies and supplements are paid directly to your aged care home. You should have your means assessed to see if you’re eligible for Australian Government assistance with your care and accommodation costs.
If your means assessment shows you have less capacity to pay, the government will contribute more.
The types of funding the government provides are:
Clinical care
Under the 1 November 2025 fee arrangements, the government fully funds all clinical care costs in aged care homes.
Under the 1 July 2014 fee arrangements, government funding for your clinical care costs in aged care homes is adjusted based on your means assessment.
Non-clinical care
Under the 1 November 2025 fee arrangements, government non-clinical care funding is adjusted based on your means assessment.
Under the 1 July 2014 fee arrangements, government non-clinical care funding is adjusted based on your means assessment.
Hotelling supplement
Under the 1 November 2025 fee arrangements, the government’s hotelling supplement may be adjusted based on your means assessment.
Under the 1 July 2014 fee arrangements, the government fully funds the hotelling supplement in aged care homes.
Accommodation: The government will pay an accommodation supplement for low means residents based on the outcome of their means assessment. You may need to pay some or all of this as an accommodation contribution.
If you are an eligible former Prisoner of War (POW) or Victoria Cross (VC) recipient, the Department of Veterans’ Affairs (DVA) may pay your basic daily fee. You may also be exempt from paying some of the contributions based on your means assessment. For more information, visit the DVA website.
How do I work out how much to pay?
Before choosing a provider and agreeing to services, it’s a good idea to work out your costs through a means assessment, or at least get an estimate, so you know what to expect.
You can use the aged care home fee estimator to understand the different fee types and calculate how much you might have to pay. You will need to answer some questions about your personal and financial situation to get an estimate.
This tool lets you estimate fees based on 1 November 2025 or 1 July 2014 fee arrangements, if it’s your first time entering an aged care home.
If you were already in an aged care home and are looking to transfer to a new service, this tool can help you decide if you want to opt in to the 1 November 2025 arrangements or stay on your current 1 July 2014 fee arrangements.
You can use the income and assets checklist for guidance on what financial information you should include in the fee estimator.
see the types of rooms and service options available,
and find a room that is within your budget.
To find out your actual costs, you need an aged care means assessment and a fee advice letter from Services Australia.
Your means assessment will let you know:
whether you are eligible for assistance with your accommodation costs
what your hotelling contribution and non-clinical care contribution will be (1 November 2025 fee arrangements), or what your means tested care fee will be (1 July 2014 fee arrangements).
Some aged care costs are set by your aged care provider and agreed with them directly. This means your actual costs will also depend on what you agree to in your accommodation agreement and whether you choose to enter a higher everyday living agreement.
How does a means assessment work?
If you're moving into an aged care home, you may have to pay contributions and accommodation costs based on your income and assets (means). You need your means assessed to determine how much you might pay and how much the Australian Government will contribute.
For most people, the means assessment is done by Services Australia. However, if you receive a means tested payment from the Department of Veterans’ Affairs (DVA), your assessment will be done by them.
You may have to fill in a means assessment form to provide the financial details that Services Australia or DVA need to complete your assessment.
Once your means assessment is complete, Services Australia will send you a fee advice letter outlining the aged care fees you can be asked to pay.
If you can’t afford your aged care home costs for reasons beyond your control, you can ask to be considered for financial hardship assistance.
Depending on your situation, you may apply for financial hardship assistance with your basic daily fee, means tested care fee, and/or accommodation costs.
If you are eligible, the Australian Government will pay some or all of your aged care costs. If you are already in care and receiving financial hardship assistance, you don’t need to re-apply for it until the current determination expires.
Note: You can’t receive financial hardship assistance for higher everyday living fees, extra service fees or additional service fees, or if you are living in a multi-purpose service.
Some accommodation payment methods may affect your pension and aged care fees. Also, if both you and your partner need access to aged care, each of your accommodation payment methods may impact the other’s aged care fees. So, it’s beneficial to seek independent financial advice before deciding how to pay for your aged care.
Services Australia’s Financial Information Service (FIS) is a free service available to everyone. FIS officers can show you how to make informed financial decisions. They can also help you to understand the financial implications of your aged care costs.
To find out more about FIS, or to make an appointment, call 132 300 and say “Financial Information Service” when asked why you are calling.
For more information and guidance on financial matters, you can also visit our financial support and advice page.
