Aged Care Fees Calculator Australia (2026 Guide)

Note: Home Care Packages were replaced by the Support at Home program from November 2025. References to Home Care Packages in this guide now apply to Support at Home.

Navigating the cost of aged care in Australia is one of the most stressful financial challenges families face. You want the best care for your loved one, but the web of fees, thresholds, and payment options can feel impossible to untangle.

This guide breaks down every fee for both home care and residential aged care, walks through worked examples for different financial situations, and shows you exactly how to get an official estimate of your costs.

Quick tools: Use our Aged Care Calculator to estimate residential care fees, or take the HCP vs NDIS Quiz if you are not sure which program is right for you.

How the fee system works in Australia

The Australian Government subsidises aged care, but most people contribute to the cost of their care based on what they can afford. The system is designed around a principle: those who can afford to pay more do so, while those with limited means receive greater government support.

There are two broad categories of aged care, and the fee structures differ between them:

• Home care (Support at Home, formerly Home Care Packages): care delivered in your own home
• Residential care (nursing homes): full-time care in an aged care facility

Both involve a combination of fees, and your financial situation determines how much you pay.

For a deeper look at how the aged care system works, visit our aged care services guide.

Step-by-step: the fee assessment process

Step 1: clinical assessment through My Aged Care

Everything starts with an assessment from My Aged Care to determine your care needs and eligibility for government-funded services. This is a clinical assessment, not a financial one. An assessor evaluates what level of care you need.

For residential care, you need an assessment from an Aged Care Assessment Team (ACAT). For home care, the assessment may come from a Regional Assessment Service (RAS) for lower-level needs or an ACAT for higher-level needs.

Not sure which aged care level applies to you? Try our ACAT Level Quiz to understand the type of assessment you might need.

Step 2: the formal means assessment

This is the critical financial step. You must complete a formal income and assets assessment through Services Australia (or the Department of Veterans’ Affairs if you are a veteran).

What you will need to provide:

• Income details (pension, superannuation, employment income, rental income)
• Financial assets (bank accounts, shares, managed funds, superannuation balance)
• Real estate (your home, investment properties)
• Other assets (vehicles, boats, personal effects of value)

Key forms:

• SA457 for residential aged care cost of care calculation
• SA456 for home care cost of care calculation
• Available at Services Australia

Step 3: receive your fee letter

Once the assessment is complete, Services Australia sends you a letter explaining the maximum fees you can be asked to pay. This letter is essential when negotiating with your chosen aged care provider.

Important: If you choose not to complete the means assessment, your provider can charge you the maximum fees. It is always in your interest to complete the assessment.

Want to estimate your means-tested care fee before the formal assessment? Use our Aged Care Means Test Calculator for a quick estimate based on your income and assets.

Complete fee breakdown: Support at Home (home care)

Support at Home packages (formerly Home Care Packages) are funded by the government to help you receive care at home. Here is what you pay.

Basic daily fee (everyone pays this)

The basic daily fee applies to all Support at Home recipients regardless of income or assets.

• Amount: 17.5% of the single basic Age Pension (approximately $12.51 per day or $4,566 per year as of March 2026)
• What it covers: A contribution toward your daily living and care costs
• Indexation: Adjusted twice yearly on 20 March and 20 September in line with pension increases

Income-tested care fee (some people pay this)

If your income exceeds certain thresholds, you may pay an additional income-tested care fee. For home care, the assessment looks at your income only (not assets).

Income thresholds for 2025-26 (approximate):

Status	Annual income threshold
Single	$32,878
Couple (combined)	$51,636

If your income is below these thresholds, you pay only the basic daily fee.

Annual and lifetime caps:

• Annual cap: Approximately $33,309 per year
• Lifetime cap: Approximately $79,942
• Once you hit either cap, the income-tested care fee stops

Support at Home funding levels

The government provides different levels of funding depending on your assessed care needs:

Package level	Annual government subsidy (approx.)
Level 1 (basic)	$10,588
Level 2 (low)	$18,622
Level 3 (intermediate)	$40,493
Level 4 (high)	$61,440

Your fees do not change based on the package level. The government simply allocates more funding for higher care needs.

To estimate what your Support at Home package might cost and how much funding you would receive, try our Home Care Package Calculator.

Complete fee breakdown: residential aged care

Residential aged care (nursing homes) has a more complex fee structure with up to four cost components.

1. Basic daily fee (everyone pays this)

• Amount: 85% of the single basic Age Pension (approximately $61.96 per day or $22,615 per year as of March 2026)
• What it covers: Day-to-day living costs including meals, cleaning, laundry, and utilities
• Key point: This is a non-negotiable fee that every resident pays

For full details, see our basic daily fee guide.

2. Means-tested care fee (based on your financial situation)

This additional fee applies if your income and assets exceed certain thresholds. For residential care, the assessment considers both income and assets.

How it is calculated:

Services Australia uses a formula that considers:

• Your total assessable income (pension, super, investments, deemed income from financial assets)
• Your total assessable assets (excluding certain exempt assets)

Annual and lifetime caps (2025-26):

• Annual cap: Approximately $33,309
• Lifetime cap: Approximately $79,942

These caps protect you from paying excessive fees over time. Once you reach either cap, the means-tested care fee stops entirely.

For the complete breakdown, read our means-tested care fee guide.

3. Accommodation costs (your room)

If the means assessment shows you can contribute to your accommodation costs, you will negotiate the room price with your chosen provider. This is often the largest single cost in residential aged care.

Who pays:

• Low-means residents: The government pays all or most of your accommodation costs. You may pay a small daily accommodation contribution.
• Non-low-means residents: You negotiate and pay the full accommodation cost with the provider.

Room prices vary widely:

• Regional/rural facilities: $200,000 to $400,000
• Metropolitan facilities: $300,000 to $700,000
• Premium facilities: $700,000 to $2,000,000+

4. Extra and additional services (optional)

Some facilities offer extra services (premium meals, newspapers, entertainment) or additional services (hairdressing, physiotherapy beyond standard). These are optional and negotiated directly with the provider.

RAD vs DAP: understanding accommodation payments

This is one of the most important financial decisions in residential aged care. You have 28 days after entering care to decide how you will pay.

Refundable Accommodation Deposit (RAD)

• A lump sum payment to the provider
• Works like an interest-free loan: the full balance is refunded to you or your estate when you leave
• Reduces your assessable assets (which may affect your pension and means-tested fees)
• Your RAD is guaranteed by the Australian Government

Daily Accommodation Payment (DAP)

• A daily rental-style payment
• Calculated using the unpaid RAD amount and the Maximum Permissible Interest Rate (MPIR)
• The MPIR is set by the government (currently around 8.34% per annum)
• DAP payments are not refundable

DAP calculation formula:

DAP = (Unpaid RAD amount x MPIR) / 365

Example: If the agreed room price is $500,000 and you pay nothing as a RAD:

DAP = ($500,000 x 8.34%) / 365 = $114.25 per day ($41,701 per year)

Combination payments

You can pay any combination of RAD and DAP. For example, on a $500,000 room:

RAD paid	Remaining as DAP	Daily DAP cost
$500,000 (full RAD)	$0	$0.00/day
$300,000	$200,000	$45.70/day
$100,000	$400,000	$91.40/day
$0 (full DAP)	$500,000	$114.25/day

Key consideration: Paying a larger RAD means less daily cost, but it also ties up capital that could be earning investment returns. A financial adviser specialising in aged care can help you work out the best split for your situation.

Use our RAD Calculator to model different RAD/DAP combinations and see which payment structure works best for your financial situation.

Worked examples: what you will actually pay

These examples illustrate how the fee system works for different financial situations. All figures are approximate and based on 2025-26 rates.

Example 1: full Age Pension recipient (residential care)

Margaret, 82, single

• Income: Full Age Pension ($27,130/year)
• Assets: $45,000 in savings, no property (sold family home years ago)

What Margaret pays:

Fee	Daily	Annual
Basic daily fee	$61.96	$22,615
Means-tested care fee	$0	$0
Accommodation	$0 (government-supported)	$0
Total	$61.96	$22,615

Margaret is classified as a low-means resident. The government covers her accommodation costs entirely. Her basic daily fee is covered by her pension, leaving her with a portion of the pension for personal expenses (the government guarantees a minimum retained amount).

Example 2: part pensioner, homeowner (residential care)

John, 79, single

• Income: Part Age Pension ($18,000/year) plus super pension ($25,000/year)
• Assets: Family home (valued at $850,000, spouse still living there), $180,000 in super, $50,000 in savings

What John pays:

Fee	Daily	Annual
Basic daily fee	$61.96	$22,615
Means-tested care fee	$42.00 (approx.)	$15,330
Accommodation (DAP on $400,000 room)	$91.40	$33,361
Total	$195.36	$71,306

Key points for John:

• His home is exempt from the assets test because his spouse still lives there
• His means-tested care fee is based on his assessable income and non-home assets
• He chose to pay full DAP to preserve his savings for his spouse
• His means-tested care fee is subject to the annual cap ($33,309) and lifetime cap ($79,942)

Example 3: self-funded retiree (residential care)

Robert and Helen. Robert, 84, entering care. Helen remains at home.

• Combined income: $85,000/year (super pensions, share dividends)
• Assets: Family home ($1.2 million, Helen living there), $650,000 in super, $200,000 in shares, $100,000 in savings

What Robert pays:

Fee	Daily	Annual
Basic daily fee	$61.96	$22,615
Means-tested care fee	$91.30 (approx., capped)	$33,309 (annual cap)
Accommodation (combination on $550,000 room)	$57.13 ($250,000 RAD + DAP on $300,000)	$20,852
Total	$210.39	$76,776

Key points for Robert:

• The family home is exempt because Helen lives there
• His means-tested care fee hits the annual cap, protecting him from higher charges
• He chose a $250,000 RAD (refundable when he leaves) plus DAP on the remaining $300,000
• He could pay the full $550,000 RAD to eliminate the daily accommodation cost, but chose to keep funds invested
• The lifetime cap ($79,942) means the means-tested care fee will eventually stop altogether

Example 4: full pensioner on Support at Home

Dorothy, 76, single

• Income: Full Age Pension ($27,130/year)
• Assets: Own home, $30,000 in savings

What Dorothy pays:

Fee	Daily	Annual
Basic daily fee	$12.51	$4,566
Income-tested care fee	$0	$0
Total	$12.51	$4,566

Dorothy receives a Level 3 Support at Home package worth $40,493 per year in government funding. After her basic daily fee, the remaining funding goes toward her care services (nursing, personal care, domestic help).

My Aged Care Fee Estimator

The Australian Government provides an official tool to estimate your aged care costs: the My Aged Care Fee Estimator.

Where to find it: myagedcare.gov.au/fee-estimator

What you will need:

1. Your income details (all sources)
2. Your financial assets (savings, super, investments)
3. Your real estate details (home value, investment properties)
4. Your relationship status

Important points about the estimator:

• It provides an estimate only, not your actual fee
• Your actual fee is determined by the formal means assessment through Services Australia
• The estimator does not include accommodation costs for residential care (these are negotiated with providers)
• Run the estimator for both home care and residential care to compare your options

Tip: Run the estimator before starting your formal means assessment so you have a rough idea of what to expect. This helps you plan and reduces stress when the formal letter arrives.

Nursing Home Costs Calculator

Residential aged care (nursing home) costs are the most complex to estimate because they involve multiple fee components that interact with each other. Our Aged Care Calculator is designed specifically for this purpose. It takes your income, assets, and the room price you are considering, then estimates your basic daily fee, means-tested care fee, and accommodation costs (RAD/DAP split).

How to use the calculator:

1. Go to the Aged Care Calculator
2. Enter your income details (pension, superannuation, investments)
3. Enter your asset details (savings, property, shares)
4. Enter the room price (RAD) of the facility you are considering
5. The calculator estimates your daily and annual costs across all fee components

The calculator gives you a starting point for conversations with providers and financial advisers. For a formal determination of your fees, you will still need to complete the means assessment through Services Australia.

If you are comparing home care and residential care costs side by side, also try the Home Care Package Calculator to see what you would pay under a home care arrangement.

Income and assets thresholds: what counts and what does not

What counts as income

• Age Pension and other government payments
• Superannuation pension income
• Employment income
• Rental income from investment properties
• Deemed income from financial assets (calculated using deeming rates, not actual returns)
• Income from trusts and companies

What counts as assets

• Bank accounts and term deposits
• Shares, managed funds, and other investments
• Superannuation balance (for account-based pensions)
• Investment properties (at market value)
• Motor vehicles, boats, caravans
• Your former home (with conditions, see below)

What is exempt or has special treatment

• Your home: Exempt if your spouse or a protected person lives there. If no protected person lives there, included in the assets test but capped at approximately $201,231.20
• Funeral bonds: Exempt up to the indexed threshold (approximately $15,000)
• Accommodation bonds/RADs paid: The RAD you pay reduces your assessable assets
• Personal effects: Reasonable household contents are generally not counted individually
• Granny flat interests: May receive special treatment depending on the arrangement

Financial hardship provisions

The Australian Government ensures that no one is denied aged care because of an inability to pay. If you are experiencing financial hardship, several protections exist.

When you can apply for hardship assistance

• You cannot meet your care costs from your income and assets
• Circumstances beyond your control have changed your financial situation (for example, your home cannot be sold, or a business has failed)
• You are paying accommodation costs that leave you with insufficient funds for daily living

What hardship assistance provides

• Reduction or waiving of the means-tested care fee
• Government assistance with accommodation costs
• Temporary or ongoing support depending on your circumstances

How to apply

1. Contact Services Australia on 1800 227 475
2. Complete the relevant hardship application forms
3. Provide supporting documentation of your financial situation
4. A decision is usually made within 21 days

Important: Do not delay entering care because of financial concerns. Enter care first and apply for hardship assistance afterward if needed. Providers cannot refuse to care for you while an application is being processed.

For more information, visit the My Aged Care financial hardship page.

Seven tips to reduce your aged care costs

1. Complete the means assessment early. Not completing it means you will be charged the maximum fees. Always complete the assessment, even if you think your finances are straightforward.

2. Get specialist financial advice. An aged care financial adviser (look for one accredited by the Aged Care Steps program) can save you thousands by optimising your RAD/DAP split and overall financial structure.

3. Understand the RAD/DAP trade-off. Paying a larger RAD reduces daily costs and is fully refundable, but ties up capital. A financial adviser can model which split works best for your situation.

4. Check your pension entitlements. Entering residential care and paying a RAD can change your asset profile, potentially increasing your Age Pension entitlement. Get advice before deciding.

5. Review your means assessment annually. Your financial circumstances may change. If your income drops or assets decrease, contact Services Australia to request a reassessment. Your fees may be reduced.

6. Know the caps. The annual and lifetime caps on means-tested care fees protect you from paying indefinitely. Track your payments to know when you are approaching these caps.

7. Compare providers and room prices. Accommodation costs vary enormously between facilities. Visit multiple providers and compare published room prices on the My Aged Care website.

March 2026: Ministerial Investigation Into Premium Service Fees

On 16 March 2026, the Aged Care Minister announced an investigation into claims that some aged care providers are charging premium fees for basic services that should be covered under standard care arrangements. The Minister specifically named Opal Healthcare as one provider under scrutiny, calling the practice “disgusting sidestepping” of aged care regulations.

This investigation highlights the importance of understanding exactly what is included in your standard aged care fees versus what constitutes a legitimate extra service. When using fee calculators or reviewing quotes from providers, ensure that you are not being charged separately for services that regulations require to be included in the basic daily fee and means-tested care fee.

If you believe you are being charged inappropriately for basic services, lodge a complaint with the Aged Care Quality and Safety Commission on 1800 951 822. The Minister emphasized that while regulations provide absolute minimum standards, Australians expect and deserve dignity in aged care, not exploitative pricing practices.

Source: ABC News, 16 March 2026

Frequently asked questions

Will I have to sell my home to pay for aged care?

This is the most common concern families have. The answer is not necessarily. Your former home is exempt from the assets test for residential care if your spouse or a protected person continues to live there. If no protected person lives there, the home is included in the assets test, but its value is capped at approximately $201,231.20. Many families use a combination of RAD and DAP payments or access equity through financial products rather than selling. Always get financial advice before making this decision.

What happens if I cannot afford the fees?

You can apply for financial hardship assistance through Services Australia. The government has provisions to ensure no one is denied care because they cannot afford it. Assistance can reduce or eliminate means-tested care fees and provide government support with accommodation costs.

Is the My Aged Care Fee Estimator accurate?

The estimator provides a good guide, but it is only an estimate. The final amount is determined by the formal means assessment from Services Australia and the specific accommodation price you agree on with your provider. Use it as a planning tool, not a final answer.

What are the biggest mistakes people make with aged care fees?

The three most common mistakes are: (1) not completing the means assessment before entering care, which results in being charged maximum fees; (2) not getting independent financial advice from a specialist aged care adviser; and (3) making the RAD/DAP decision without understanding how it affects pension entitlements and overall financial position.

How does entering aged care affect my Age Pension?

The Age Pension is included in the income assessment for aged care fees. However, entering care can also change your asset profile. For example, paying a lump sum RAD reduces your assessable assets, which may increase your pension entitlement. The interaction between aged care fees and pension is complex, and specialist advice is strongly recommended.

Can my family home be taken to pay for aged care?

The government cannot force you to sell your home. However, if you choose to sell it, the proceeds become assessable assets. If you do not sell it and no protected person lives there, its capped value is included in the assets test. Some families choose to rent the home out to generate income for care costs while preserving the asset.

Are aged care fees tax deductible?

Generally, aged care fees are not tax deductible for the person receiving care. However, the medical expenses tax offset was abolished in 2019. Some components may be deductible in specific circumstances (for example, if care is received as part of a compensable injury). Consult a tax professional for advice on your specific situation.

Get help understanding your aged care fees

Understanding aged care fees is the first step toward making confident decisions for yourself or your loved one. The system is detailed, but it is designed to be fair, with protections for those who need them most.

MD Home Care is a connection platform that helps you find aged care providers and professionals who can explain your options and guide you through the fee process with clear, straightforward advice.

Call us on 1800 953 253 to speak with someone who can help you understand your aged care fee options and connect you with the right providers.

You can also explore our aged care services guide to learn more about the types of care available, or read our detailed guides on the basic daily fee and means-tested care fee for more information on specific fee components.