Guide
What an aged care home costs
Money is often the part of this that keeps people awake, and the explanations on offer rarely help. The good news is that there are only four things you can be charged for. Taken one at a time, most families find their own situation is clearer, and smaller, than it first looked.
Figures as at 20 March 2026 · next indexed 20 September 2026The four things you pay
Residential aged care is mostly funded by the government. What a resident pays sits on top of that, and it comes in four parts. Not everyone pays all four.
| What it is | Who pays it |
|---|---|
| Basic daily fee Day-to-day living — meals, laundry, cleaning, power | Everyone |
| Means-tested contributions A share of your own care and living costs | People above the income and assets thresholds |
| Accommodation The room itself | Most people, in full or in part |
| Higher everyday living fee Optional extras the home offers | Only if you agree to it in writing |
The basic daily fee
Everyone in residential aged care pays this. It is fixed by law at 85% of the single basic age pension, which is currently $66.80 a day. It is not negotiable and it does not vary between homes — the home down the road charges exactly the same.
Because it tracks the pension, it changes on 20 March and 20 September each year.
The means-tested contributions
Services Australia looks at income and assets and works out whether a person should contribute towards their own care. Since 1 November 2025 this comes in two parts.
Hotelling contribution
A contribution towards everyday living costs — the same sorts of things the basic daily fee covers. It is capped at $22.15 a day, and people with lower means pay less or nothing.
Non-clinical care contribution
A contribution towards care that isn't clinical — help with bathing, dressing, moving around. Capped at $107.32 a day.
Two limits apply to the non-clinical care contribution.
You stop paying it once you have paid $137,910.01 across your lifetime, or after 4 years of paying it — whichever comes first. After that it stops permanently, even if you remain in care.
Clinical care is never means tested. Nursing, medication management and allied health are funded by the government for everyone, whatever their means.
The room
Accommodation is the part that varies most between homes, and the part worth shopping around on. A home publishes a price for each room, and cannot charge more than the price it has published on My Aged Care.
A provider can set a room price up to $758,627 without asking anyone. Above that they need approval from the Independent Health and Aged Care Pricing Authority. That ceiling is indexed each 1 July; the current figure applies from 1 July 2025.
You can pay that price as a refundable lump sum, as a daily payment, or as a mix of the two — and you don't have to decide before you move in. How the room payment works covers the choice in detail, including the 2% a year that is now deducted from lump sums.
If your means are below the threshold, the government pays some or all of your accommodation. In that case you pay an accommodation contribution rather than an accommodation payment — the wording on the paperwork is how you tell which one applies to you.
Two sets of rules, depending on when you entered
The fee rules changed on 1 November 2025. Anyone already in care on that date keeps the arrangements they entered under, for as long as they stay in care. So if you are comparing notes with a friend whose mother went in two years ago, you may both be right and still have different numbers.
Everything on this page describes the arrangements for someone entering now.
What can't happen
- Nobody has to sell a house. The room can be paid daily instead of as a lump sum, and only part of the value of a former home counts in the assets test.
- A home cannot charge more than its published room price, and if it has published no price on My Aged Care it cannot charge for accommodation at all.
- Extra services are optional. A higher everyday living fee — for a bigger television, a wine with dinner, a particular outing programme — has to be agreed in writing. It cannot be added to the bill because everyone else on the floor has it.
- You cannot be refused care because you can't pay. Financial hardship assistance exists, and is applied for through Services Australia.
Getting the numbers for your own situation
The figures above are the caps and the fixed amounts. What a particular person actually pays depends on their income and assets, and only Services Australia can work that out. Two things are worth doing early, because both take time:
- Complete the income and assets assessment with Services Australia. Until it is done, a home may charge the maximum.
- Book the Financial Information Service — a free Services Australia service, no sales attached, that will sit down and go through the numbers for your situation.
We publish government data and explain how the rules work. We are not financial advisers, and none of this is advice about your circumstances.
Sources
- Residential aged care fee scenarios — 1 November 2025 arrangements, Department of Health, Disability and Ageing
- Basic daily fee for residential aged care, Department of Health, Disability and Ageing
- Published prices and maximum accommodation payment amounts, Department of Health, Disability and Ageing
- Aged care home costs and fees, My Aged Care