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Fees & Funding

In Australia, the cost of residential aged care is met through a combination of Australian Government funding and contributions from individual residents. Understanding the different types of contributions you may need to make is important when considering residential care for yourself or a loved one. Our goal is to help you understand these arrangements and how they might apply to you.

This information is applicable to new aged care residents who enter care after 1 November, 2025.

 

Basic Daily Fee

Every resident contributes to their living expenses through the Basic Daily Fee. This fee covers services like meals, cleaning, laundry, and utilities.

How it's set

The Australian Government sets the maximum Basic Daily Fee, which is calculated at 85% of the single person rate of the basic Age Pension. This amount is updated twice a year in line with changes to the Age Pension (typically on 20 March and 20 September).

Who pays

All residents pay this fee. For residents with very low means, this may be the primary fee they contribute if they are eligible for maximum government assistance with other costs.

 

Hotelling Supplement Contribution 

This is a means tested contribution for daily living costs such as food, cleaning, laundry and utilities. It is paid by some residents in addition to the Basic Daily Fee.

How it's set

The Australian Government sets the maximum Hotelling Supplement Contribution. This amount is updated twice a year in line with changes to the Age Pension (typically on 20 March and 20 September).

Who pays

Residents with income and assets above a certain level will pay this as a contribution towards their living costs. If your income and assets are below the threshold, the Australian Government will cover the full cost on your behalf.

 

Accommodation Costs

Accommodation contributions cover the cost of your room and amenities in the aged care home.

Assessment

Before you move into care, the Australian Government will assess your income and assets to determine if you need to make an Accommodation Contribution, and if so, how much.

Payment Options

If you are assessed as needing to make an Accommodation Contribution, you can generally choose to pay it as:

  • A lump sum Refundable Accommodation Deposit (RAD), or
  • A non-refundable Daily Accommodation Payment (DAP), or
  • A combination of both a partial RAD and smaller DAPs.

If you pay a DAP, you will be charged interest at a government-prescribed rate. DAPs are indexed twice a year (20 March and 20 September) based on CPI. ​

Government Assistance

If your income and assets are below a certain threshold, you will be eligible for government assistance towards your accommodation costs. In this case, you may still be asked to contribute towards your accommodation costs in the form of a lump sum Refundable Accommodation Contribution (RAC), a Daily Accommodation Contribution (DAC), or a combination of the two.

RAD and RAC Retention and Refunds

If you pay a RAD or RAC, this amount (less any allowable deductions) is refunded to you or your estate when you leave the aged care home.

From 1 November 2025, all residential aged care providers will be required to retain 2% per annum, up to a maximum of 10% over 5 years to protect residents who remain in care for a long time.

The balance of your RAD must be refunded to you or to your estate within legislated timeframes when you leave care. 

Our Room Prices

Room prices vary between our Residential Care homes. To find out the current maximum Accommodation Contribution (room price) for each of our homes, please click here and look for the accommodation details or calculator on each home's page.

 

Non-Clinical Care Contribution

This is a means-tested contribution that some residents pay towards the cost of their non-clinical care costs such as bathing, mobility assistance and lifestyle activities.

Assessment

The amount of Non-Clinical Care Contribution you pay (if any) is determined by the Government based on an assessment of your income and assets. The maximum daily contribution can be up to $101.16 (indexed) and a lifetime contribution cap of $130,000 (including contributions made in the Support at Home program) or been in residential aged care for 4 years, whichever occurs first, indexed twice per year.

Who pays

Residents with income and assets above a certain level will pay this contribution. If your income and assets are below the threshold, the Australian Government will cover the full cost of your clinical and non-clinical care.

 

Case Studies

Here are some fictional examples to help you understand how different fees might apply:

 

Example 1 - Elizabeth

Elizabeth is moving into an aged care home from her rented unit. The Age Pension is her only income, and she has minimal assets.

Basic Daily Fee: Elizabeth will pay the Basic Daily Fee through her Age Pension.

Accommodation Contribution: Given her low means, the Australian Government will likely cover the full cost of her accommodation. Elizabeth will likely not need to pay an Accommodation Contribution.

Hotelling Supplement and Non-Clinical Care Contribution: Elizabeth will likely not need to pay a Hotelling Supplement or a Non-Clinical Care Contribution due to her low means.

 

Example 2 - Philip

Philip owns his unit and receives a modest income from his superannuation.

Basic Daily Fee: Philip will pay the Basic Daily Fee.

Accommodation Contribution: Based on his assessment, Philip may be asked to pay a partial Accommodation Contribution. He can choose to pay this as a smaller RAD, a DAP, or a combination of the two. The Government will pay the remaining portion of his accommodation cost.

Hotelling Supplement and Non-Clinical Care Contribution: Philip may need to pay a partial Hotelling Supplement and Non-Clinical Care Contribution.

 

Example 3 - Margaret

Margaret is a self-funded retiree with significant income and assets.

Basic Daily Fee: Margaret will pay the Basic Daily Fee.

Accommodation Contribution: Margaret will need to pay the full Accommodation Contribution for her chosen room. She can choose to pay this as a RAD, a DAP, or a combination of the two.

Hotelling Supplement and Non-Clinical Care Contribution: Margaret will pay the maximum Hotelling Supplement and Non-Clinical Care Contribution, based on her income and assets, up to the applicable lifetime caps.

 

More information

Understanding aged care costs can be complex. For personalised information and to use Government estimators, you can:

  • Visit the My Aged Care website by clicking here.
  • Speak with a financial advisor who specialises in aged care.
  • You can also speak to our friendly Care Options team by calling 1800 852 772.

Please note that although funding for Residential Care is contributed to by the Australian Government, the material contained on this page does not necessarily represent the specific views or detailed policies of the Australian Government. It is intended as a guide only. All financial details should be confirmed with My Aged Care or a financial advisor.