Aged Care Fees Explained



Four types of fees potentially apply for permanent residential aged care:

1. Basic daily fee

2. Means tested care fee

3. Accommodation payment

4. Extra Services Fees (Additional Services Fee)

Short term (respite) care is treated differently from an aged care fees point of view.

Basic daily fee

Every potential aged care resident must pay the basic daily fee.

This fee is used for covering the day-to-day livings costs of residents such as meals, heating, cleaning. It is calculated as 85% of the Aged Pension.

The maximum daily fee which can be requested by a provider is $60.86 per day.

Means-tested care fee

The amount, if any, of a means tested care fee will depend on the outcome of an Centrelink Assets & Income Assessment.

Generally, if assets are above $197,735.20 or assessable annual income is above $32,331.00, a means tested care fee will apply.

If the means tested care fee is applicable, it is capped at an annual amount of $32,718.57. A lifetime cap of $78,524.69 also applies.

The former primary residence may count as an asset, if a family member or carer is not, or has not, been living at the house. If the former house is included, its value is capped at $197,735.20.

Accommodation payment

If assessed assets is between $58,500-$197,735.20 a partial accommodation payment (called an accommodation contribution) will be required.

An incoming resident with assets above $197,735.20 will be required to make a full accommodation payment.

An Accommodation payment can be paid in a number of ways:

Lump Sum (Bond)

Also known as ‘Refundable Accommodation Deposit’ (RAD) or ‘Refundable Accommodation Contribution’ (RAC).

The amount charged will vary from facility to facility, and from room type to room type. Typically RAD’s range from $350,000 – $1,000,000.

Aged care providers must publish their maximum RAD, but a lower RAD can be negotiated one-on-one.

Until the lump sum is paid (max 6 mths) a daily fee will be charged (see below).

The RAD is fully refunded back to the resident upon leaving the aged care facility.


Daily Fee

Also known as a Daily Accommodation Payment (DAP) or Daily Accommodation Charge (DAC).

The daily fee is calculated by reference to the RAD – applying an interest rate (currently 8.15%) to the lump sum amount, then dividing by 365 to make a daily fee.

The DAP is not refundable upon exit.

Part Lump Sum + Part Daily Fee

This scenario involves paying the accommodation payment partially with a lump sum, and partially as a daily fee.

It is particularly useful when considering an aged care room that has a slightly higher RAD. A lower RAD can be paid upfront (e.g. 50% of the room price), with the balance paid as a daily fee.

The daily fee component (DAP/DAC) can be deducted from the lump sum component (RAD/RAC).

The average RAD across Australia is approximately $470,000, and can be as much as $1 million in inner city areas.

A resident has 30 days from placing into aged care to decide how they will pay the accommodation payment – using one of the methods above.

If lump sum (RAD) method is chosen, a resident has 6 months to physically pay the lump sum to the provider, until which time they will be charged a DAP.


An elderly person can access up to 63 days of subsidised short stay (respite) in an aged care facility per financial year if they have been assessed for respite care, and have a Respite Care Referral Code.

During this period the maximum that can be charged to a resident is the Basic Daily Fee ($60.86) and any Extra/Additional Service Fees that apply to that room.


All amounts nominated above are current as of 20 September 2023, but are revised twice a year.

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