If you're trying to work out what aged care will actually cost you or your parent, you've probably discovered it's confusing. There are multiple fees, means-tested components, lump sums, and daily payments, all using acronyms that nobody explains.
This guide breaks it all down in plain English, with real numbers for 2026.
Key Takeaways
- Total costs range from around $25,000/year (full pensioner) to $100,000+/year (self-funded retiree) for residential care
- Four main fee components: basic daily fee, hotelling contribution, non-clinical care, and accommodation
- The means test determines how much you contribute, with your pension status driving everything
- A lifetime cap of $135,318.69 protects you from unlimited non-clinical care fees
The four fee components
Under the new system (from November 2025), residential aged care fees are split into four main parts. Everyone pays the first one. The rest depend on your financial situation.
1. Basic Daily Fee: around $66.80 per day
Everyone pays this. It's set at 85% of the single Age Pension and covers meals, cleaning, laundry, and utilities. That's about $24,382 per year regardless of how wealthy or poor you are.
2. Hotelling Contribution: up to $22.15 per day
This is a means-tested fee covering your share of building upkeep and room furnishings. Full pensioners pay nothing. Self-funded retirees pay the full rate. Part pensioners pay somewhere in between.
Unlike other fees, there is no cap on how much you pay over your lifetime.
3. Non-Clinical Care Contribution: up to $105.30 per day
This covers personal care, including help with showering, dressing, and mobility. Again, means-tested: full pensioners pay nothing; self-funded retirees pay the maximum.
The good news: there's a lifetime cap of $135,318.69 (or 4 years of contributions, whichever comes first). Once you hit the cap, this fee drops to zero.
4. Accommodation: varies widely
This is the cost of your actual room. Facilities set a price called a Refundable Accommodation Deposit (RAD), typically between $300,000 and $750,000. You can pay it three ways:
- Lump sum (RAD): Pay the full amount upfront. It's fully refundable when you leave (the facility retains 2% per year, capped at 5 years).
- Daily payment (DAP): Pay it as a daily fee instead. Non-refundable. Roughly equivalent to the interest on the RAD.
- Combination: Part lump sum, part daily.
A typical $500,000 RAD works out to about $114 per day if paid as a DAP.
Quick reference: typical annual costs
| Situation | Basic daily fee | Hotelling | Non-clinical care | Accommodation | Total/year |
|---|---|---|---|---|---|
| Full pensioner, low assets | $24,382 | $0 | $0 | $0 (govt covers) | ≈$24,382 |
| Full pensioner, moderate assets | $24,382 | $0 | $0 | $41,600 | ≈$65,982 |
| Part pensioner | $24,382 | $4,040 | $19,200 | $41,600 | ≈$89,222 |
| Self-funded retiree | $24,382 | $8,085 | $38,435 | $41,600 | ≈$112,502 |
These are illustrative numbers based on a $500,000 room price and typical means test outcomes. Your actual costs will vary based on the specific facility, your assets, and your income.
See your personalised estimate
Enter a few details about your situation and get a full breakdown of what you'd actually pay, including pension impact and financing scenarios.
Try the CalculatorWhat about home care?
If you'd rather stay in your own home, the Support at Home program (which replaced Home Care Packages in November 2025) provides care services with the government covering most of the cost.
There are 8 funding levels, from Level 1 (≈$11,500/year budget) up to Level 8 (≈$78,106/year). Your contributions depend on the type of service:
- Clinical care (nursing, physiotherapy): Fully government funded. You pay nothing.
- Independence support (help with mobility, personal care): You pay 5% (full pensioner) up to 18% (self-funded retiree).
- Everyday living (cleaning, gardening, meals): You pay 17.5% (full pensioner) up to 80% (self-funded retiree).
For most people on Support at Home, your out-of-pocket contribution is between $1,000 and $15,000 per year, depending on your level and means test.
What affects your costs most
Two things drive almost everything:
1. Your pension status. Full pensioners pay dramatically less than self-funded retirees. The means test (which looks at both your income and your assets) is what determines this.
2. Whether you own a home and what happens to it. If your partner stays in the home, it's fully exempt from the assets test. If you sell it or rent it out, the proceeds or rent count against you, often pushing you from full pensioner to part pensioner, which increases your fees.
Hidden safety nets you should know about
The new system includes several protections most people don't realise exist:
- Lifetime cap ($135,318.69): Once you've paid this much in non-clinical care contributions, you stop paying.
- Accommodation supplement: If your income is below $34,762/year and assets below $63,000, the government covers your accommodation.
- Hardship provisions: If you genuinely can't afford fees, you can apply for financial hardship assistance through Services Australia.
- DVA coverage: Former POWs and Victoria Cross recipients have their basic daily fee and means-tested care fees covered entirely by DVA.
So what will you actually pay?
There's no single answer. It depends on your income, your assets, whether you own a home, whether your partner is staying there, and which facility you choose.
The best way to get a realistic number is to run your actual situation through a calculator. Ours takes about 2 minutes and shows you:
- Daily, weekly, and annual costs
- A breakdown of each fee component
- How the means test applies to you
- Year-by-year projections with inflation
- A comparison of different financing strategies (sell home vs keep vs rent vs HEAS)