Understanding aged care fees and charges can be one of the most complicated aspects of navigating the aged care process. In order to help answer some of these financial questions we have put together 7 Frequently Asked Questions About Residential Aged Care Fees.
1. What are the different types of Aged Care Fees?
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. The maximum daily fee which can be requested by a provider is $68.93.
Means-tested care fee
The amount, if any, of a means tested care fee will depend on the outcome of an Assets & Income Assessment. Generally, if assets are above $219,858.40 or assessable annual income is above $36,454.60 a means tested care fee will apply. If the means tested care fee is applicable, it is capped at an annual amount of $37,055.98. A lifetime cap of $88,934.57 also applies. It is important to note that the former primary residence may count as an asset.
Higher Everyday Living Fee
Since 1 November 2025, services above the standard care and everyday living services every resident receives have been charged through an optional higher everyday living fee (HELF). It replaced the Extra Services Fee and additional service fees, and any of those older agreements still in place on 1 November 2026 ceased to have effect.
A HELF can only be agreed after a resident has moved in, through a separate agreement that lists the cost of each service. The resident has 28 days to cancel or change it without a cancellation fee, and cannot be charged for services they cannot or will not use.
From 1 November 2026, residents who were in care before 1 November 2025 also cannot be charged a HELF for any service they received at no extra cost immediately before that date. See how the higher everyday living fee works.
Accommodation Payment (RAD/DAP)
Aged care fees are split into two types – care fees and accommodation fees. An accommodation fee will usually be expressed in the form of a Refundable Accommodation Deposit (RAD). This is what used to be known as the aged care bond. Currently, the average RAD across Australia is approximately $470,000. The RAD is normally fully refunded to a family upon exit. This amount can also be elected to be paid as a Daily Accommodation Payment (DAP), which is non-refundable.
2. How do I know which aged care fees I have to pay?
The types of aged care fees you have to pay differ depending on the type of care you are looking for and the future residents’ level of assets. The two primary types of Residential Aged Care are respite and permanent.
Respite Care
Respite care is a short-term stay in a residential aged care home, designed to give carers a break for a limited time. You can access up to 63 days of subsidised respite care in a financial year.
For respite care, residents pay the Basic Daily Care Fee. The current rate is on our Schedule of Fees and Charges for Residential and Home Care.
A home may also offer higher everyday living services during a respite stay. These are optional and only charged if the resident agrees to them after arriving, through a separate higher everyday living agreement.
Permanent Care
Permanent care is for those who are no longer able to live on their own. Permanent care includes accommodation and 24/7 care, as well as access to nursing and general health care services. The types of fees you will need to pay for permanent care vary depending on the future residents’ assets.
Supported Resident
If the future resident has assets below $66,500 then they are considered a supported resident. Supported residents only have to pay the Basic Daily Care Fee. There is no accommodation payment required as a supported resident.
Partially Supported
If the future resident has assets between $66,500 and $219,858.40 then they are considered partially supported. Partially supported residents must pay the Basic Daily Care Fee as well as a Daily Accommodation Contribution (DAC). There is no accommodation payment required as a partially supported resident.
RAD Payer
If the future resident has assets more than $219,858.40 then they are considered a RAD payer. As a RAD Payer, there are three compulsory fees to be paid. All RAD Payers must pay the Basic Daily Care Fee, the Means Tested Care Fee and the Accommodation Payment (paid as either RAD or a DAP).
3. Do I have to pay a Refundable Accommodation Deposit (RAD)?
As mentioned above, you only need to make an Accommodation Payment if you have assets over $219,858.40. This Accommodation Payment can either be paid as a lump sum or in instalments. The lump sum payment is called a RAD and is fully refundable upon exit. Paying in instalments is called a DAP and is non-refundable.
4. How do I know if the family home is excluded from assets?
There are some circumstances in which the family home is actually excluded from their assets. If a protected person lives in the family home, it will not count towards a future residents’ assets. It is also important to note that this exemption may be lost if the protected person who has been living in the home, moves out. A person is considered protected if they tick any of the following criteria:
- A partner/spouse
- A dependent child
- A carer who is eligible to receive an Australian Government income support payment and who has lived in your home for the past 2 years. It is not necessary for the carer to have received a Carer Payment or Carer Allowance in order to be considered a carer. However, at the date of entering care the carer must meet the eligibility criteria for an Australian Government income support payment.
5. What is the best way to pay the Accommodation Payment?
An accommodation payment can be paid in two ways a Refundable Accommodation Payment (RAD) or a Daily Accommodation Payment (DAP). The RAD is paid as a lump sum payment and is fully refundable upon departure from the aged care facility. On the other hand, a DAP is paid in instalments and is not refundable. There is also the option to pay part of the Accommodation Payment as a RAD and part as a DAP. The best way to pay this payment varies from family to family and it is best to professional financial advice to see which option would best suit you.
6. What should we do with the family home?
Selling or renting out the family home to pay for aged care fees is a decision with a significant financial impact. The decision will impact pension eligibility, assessed assets and the means tested care fee. The decision on selling or not selling the family home needs to be made utilising specialised financial advice. A financial advisor is recommended if finances are of particular concern.
Read more: Do I need to sell my home to pay for aged care?
7. Are aged care fees negotiable?
Some aged care fees are negotiable and others are not. The Basic Daily Care Fee is set by the Australian Government, and the Means Tested Care Fee (for residents who entered care before 1 November 2025) is worked out by Services Australia from the resident’s means assessment.
The RAD can be negotiated with the aged care home. A higher everyday living fee is optional, and is only charged if the resident chooses the services after moving in.
If you need help to find aged care fill out this form and we will get in touch with you. Alternatively, give us a call on 1300 775 870 and we can answer any questions you may have.
Fees and thresholds are revised twice a year. For current figures, see our Schedule of Fees and Charges for Residential and Home Care.
