JUNE 2026
Understanding Residential Aged Care Fees
Aged Care Funding Arrangement
Funding arrangements for residential aged care is according to the Aged Care Act and relevant Aged Care Rules 2025.
The cost of accommodation and care is subsidised by the government, with resident’s contributing according to a combined income and asset assessment conducted by Services Australia.
The maximum amounts resident’s can be asked to pay are regulated by the Government. There are protections in place to ensure that care is affordable for all Australians and that no-one is denied care due to the inability to pay.
Residential Respite
For residential respite care (up to 63 days each financial year) payments include:
- A basic daily fee
Types of Care Fees
There are 4 types of payments that permanent resident’s can be asked to pay (as of 1 November 2025):
- A basic daily fee ($66.80 or $935.20 per fortnight)
All resident’s are asked to pay this fee which covers meals, cleaning, laundry, utilities. This is set at 85% of the single person rate of the basic age pension and may be the only fee you are required to pay.
When you enter an aged care home a letter is provided by the Services Australia confirming your basic daily fee.
The basic daily fee is paid monthly one month in advance.
- An accommodation payment (maximum $750,000 without prior approval)
Some resident’s, as advised by Services Australia will have their accommodation paid for in full or in part by the Government.
Those who are subsidised by the Government for part of their accommodation are asked to pay an Accommodation Contribution for the difference between the published accommodation price and subsidy.
Those who are not supported by the Government are asked to pay the published accommodation price. You cannot be asked to pay an accommodation payment more than the published price.
- A means-tested amount – some resident’s, as advised by Services Australia will be required to pay a contribution towards the:
- Hotelling Supplement Contribution – resident’s who pay their accommodation costs in full also contribute to their daily living costs for food, cleaning, laundry and utilities. Where the maximum contribution is not fully covered by the resident the difference is paid by the Department of Health to the Registered Providers.
- Non-Clinical Care Contribution – applies to resident’s who can fully fund the Hotelling Supplement contribution. The non-clinical care includes bathing, mobility assistance and lifestyle activities. A resident can pay up to $107.32 / day until either a contribution of $137,917.01 has been reached or the resident has been in RAC for 4 years, whichever occurs first.
- Higher Everyday Living Fee (HELF) – replaces the extra / additional optional service fee. Registered Providers can determine the cost of HELF services, approval from the Independent Health and Aged Care Pricing Authority (IHACPA) is not required.
Services Australia determines care fees that are payable, and the level of Government support based on the combined income and asset assessment. It is important to provide the required information to Services Australia as soon as possible.
Services Australia will, in most cases, finalise the assessment and notify the resident and provider within 14 days of receiving the information. Further information is available on the My Aged Care website or from Services Australia.
Further information is available at: Australian Government, Department of Health, Disability and Aged Care, Schedule of Fees and Charges for Residential and Home Care.
Accommodation Payment Options
If you are required to pay the full accommodation price or a contribution toward your accommodation, you have a right to choose to pay as a refundable lump sum (deposit) or a daily payment or a combination payment.
There are different terms used for deposits and daily payments depending upon whether you are partly supported by the Government or paying your accommodation payment in full.
If assisted by Government and contributing toward the cost of your accommodation the terms used are:
- RAC (Refundable Accommodation Contribution) which refers to a lump sum payment which is like an interest free loan which is payable when you leave, less any amounts you have agreed to have deducted.
- DAC (Daily Accommodation Contribution) which refers to a daily payment which is made on a regular basis, up to a month in advance, similar to paying rent. It is not refunded when the resident leaves.
- You can choose to pay a RAC or a DAC or a combination payment RAC/DAC.
If you are not assisted by Government and are paying for all of your accommodation costs the terms used are:
- RAD (Refundable Accommodation Deposit) which refers to a lump sum payment which is like an interest free loan payable when you leave, less any amounts you have agreed to have deducted.
- DAP (Daily Accommodation Payment) which refers to a daily payment which is made on a regular basis, up to a month in advance, similar to paying rent. It is not refunded when the resident leaves.
- You can choose to pay a RAD or DAP or a combination payment RAD/DAP
An equivalent daily payment (DAC/DAP) of a Refundable Accommodation Contribution/Deposit (RAC/RAD) is calculated by: RAC/RAD x MPIR /365 days
MPIR = the Maximum Permissible Interest Rate that is set by the Government and published quarterly. From 1 July to 30 September 2026 the MPIR = 8.43%
Examples:
A refundable deposit of $400,000 would have an equivalent daily payment of $83.84 per day calculated by:
(Refundable deposit x MPIR)/365 = ($400,000 x 8.43%)/365 = $92.38 per day
A combination payment for a $400,000 accommodation price with a 50% payment of the refundable deposit of $200,000 would have a daily payment of $46.19 per day with the daily payment calculated by:
(Balance of price x MPIR)/365 = [($400,000 - $200,000) x 8.43%]/365 = $46.19 per day
If you choose a combination payment, there is also the option to have your daily accommodation payment taken out of your lump sum refundable accommodation deposit.
If you choose this option, we may ask you to top up your refundable accommodation deposit or pay a higher daily accommodation payment to compensate for the reducing lump sum.
Asset Thresholds
- Asset free area: $64,500
- First asset threshold: $214,884 and
- Second asset threshold: $258,000
- Third asset threshold: $361,366.66
- Fourth asset threshold: $536,384
Income free area: Single ($35,313.20), Couple, illness separated, single rate ($34,585.20)
Please refer also to the Proposed Resident Agreement provided related to fees and charges. Whilst you have a right not to sign the agreement the approved provider has an obligation to enter into a payment agreement therefore, we will put this in writing.
Whilst aged care managers and staff are able to explain and clarify the information related to the funding arrangement and the accommodation pricing and payment options, they are not able to provide financial advice. You may wish to talk to a financial adviser about the best payment option for you before you decide.
You are legally required to notify Services Australia within 28 days of changes to your personal and financial circumstances, for example, house previously occupied by a partner is no longer occupied and is sold. This will ensure that you fees remain at the correct amount.
To ensure that your means assessments are up to date and current with Services Australia we are required to mandatory report your RAD / RAC balances monthly to Services Australia.
Types of Care Fees
Aged Care Funding Arrangement
Retention amounts of 2% per annum on new RADS/RACS apply. Retentions are calculated based on the daily balance and deducted monthly and capped at five (5) years.
All retention amounts are recorded in the refundable deposit register.
Retention amount is calculated using the following formulae:
RAD / RAC balance × 2% ÷ 365 =
Example:
400,000 × 2% ÷ 365 = $21.92
$21.92× 30 days = $657.60
Daily Accommodation Payment (DAP) Indexation
DAPs are indexed each year on 20 March and 20 September in line with the Resident Price Index (CPI). The index number is published in the schedule of fees and charges for residential and home care.
Your new DAP amount is calculated as it applies on the indexation day
You will be informed of your DAP changes
Indexation days apply immediately before the day you enter care or move to a new room. For example, if you enter care 1 May 2026 or move to a new room, the indexation day will be 20 March 2026. If you enter care on the indexation day, then this indexation day applies.
Key Feature Statement
Accommodation options include:
- Superior Deluxe Room – single room with private ensuite
- Deluxe Room – single room with private ensuite
- Premium Room – single room with private ensuite
- Standard Room – single room with ensuite
- Companion Room – shared room with shared room
All rooms are tastefully decorated with quality furnishings and have been designed to promote independence.
Communal areas are available to all resident’s, with larger spaces for group activities and smaller areas for quieter interests
The following amenities are available to all resident’s irrespective of room type:
o Wi-Fi installed throughout the building
o Telephone and computer points available in all resident rooms
o Hairdressing salon
o Libraries in various locations around the facility
o Outdoor seating in courtyards and garden areas
o Lounges in each section of the facility with large flat screen TV
o Car parking for visitors
o Physiotherapy
o Meal service for visitors
o Podiatry
o Personal and Clinical Care
o 24/7 Nursing Support
o Continence Management
o Daily Activities
Higher Everyday Living Fee (HELF)
We offer a range of optional services designed to enhance your daily living experience by providing greater comfort, choice, and convenience.
These services can be tailored to your needs and are available as part of a bundle or individually. These services may include for example, premium meal options, extra lifestyle and wellbeing activities, enhanced personal care, and upgraded amenities within the home.
Choosing the Higher Everyday Living Fee services allows you to personalise your aged care experience to better reflect your preferences and lifestyle, while maintaining the same high standards of safety and care.
If you’d like more information, please speak to our staff so that an appointment can be arranged for further discussions.
Security of Tenure
All resident’s, including respite resident’s are offered a Service Agreement, which specifies:
- the rights and responsibilities of the resident and the service provider;
- fees and charges;
- termination of the agreement.
Your security of tenure is valid from the time of admission until the time of your departure unless otherwise specified in the Agreement. This said, if your combined income and asset assessment is not completed at the time of your entry a change of room may be required when it is finalised.
Every effort is made to ensure resident’s move into the most appropriate room which is reflective of their care needs and preference. As circumstances change it may be necessary to move a resident from one room to another for medical or other care needs. Any such move would be made in consultation with you and your family and mutual agreement prior to the move.
If the move is initiated by staff, you cannot be asked to pay a higher fee for your room if it is a higher priced room if you are paying an accommodation payment.
You can change rooms through mutual agreement which may result in a higher or lower fee for the room if you are paying an accommodation payment.
