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Understanding Aged Care Fees and Charges

The Importance of Aged Care Fees and Charges

The aged care fees and charges associated with entering into an aged care home are complex and difficult to understand. It can empower you when making choices about your care needs and the aged care facility that’s right for you. Here’s our guide to understanding aged care fees and charges:

When Entering into an Aged Care Home you May Have to Pay the Following Fees:

  • A basic daily fee
  • A means-tested care fee
  • Accommodation payments
  • Extra fees charged by the provider

Government Funding 

Completing an income and assets form before moving into an aged care home will give you peace of mind. Notably, the assessment will determine how much of your aged care fees the Commonwealth Government will subsidise.

First of all, it’s not compulsory to get a means test through the department of human services. By completing a means test however, you could receive a financial subsidy from the government towards your care.

Above all, it’s a good idea to get an assessment before entering into residential care. Why? So that you know from the onset of the service what you’ll need to contribute. The outcome can take some time to receive.

Hence, by completing the assets and income assessment form, you know from the beginning if you’ll financially contribute to the cost of your careFor more information, you can free call the Department of Human Services at 1800 227 475.

Basic Daily Fee 

  • Aged care providers can ask you to contribute towards your everyday living costs. This can include meals, air-conditioning, laundry services, garden maintenance and cleaning. The basic daily fee is a daily calculation. It can’t exceed the indexed amount. For basic daily fee rates go to My Aged Care.
  • In considering this, the basic daily fee is payable on top of the means-tested care fee and the accommodation payments.

Means-Tested Aged Care Fees 

  • It’s possible you’ll pay a means-tested care fee as well as a basic daily fee and accommodation costs.
  • The means-tested care fee has annual caps in place.
  • Complete an income and assets assessment form through the Department of Human Services. The assessment determines whether you’ll pay a means-tested care fee.

Accommodation Payments 

  • How much can I expect to contribute towards my accommodation in an aged care home?
  • It’s possible you’ll contribute to the cost of your accommodation if you’re able to do so. Thus, completing a combined income and assets assessment early on is advisable.
  • There’s a fee estimator tool available at My Aged Care
  • There are annual caps placed on contribution towards your care.
  • Contributions towards your accommodation costs will depend on your income and assets.

centrelink office

Accommodation Deposits 

If the outcome is that you need to pay the full cost of your accommodation, it’ll be either a RAD, DAP, RAC or DAC:


  • A Refundable Accommodation Deposit (RAD):
  • The full cost of your accommodation paid as a lump sum fee for the cost of your aged care unit/ room.
  • The deposit varies depending on the room that you choose.
  • There’ll be up to six months to pay this after entering the aged care facility.
  • The deposit is refundable if you leave the aged care home. The deductions that you’ve agreed upon come out first.


  • A Daily Accommodation Payment (DAP):
  • This is the full cost of your accommodation paid as a daily fee for the cost of your aged care unit/ room.
  • The daily accommodation payment is like the refundable accommodation deposit, but it’s periodical.
  • It’s not refundable

Accommodation Contributions

If you’re eligible for government help with your accommodation costs, it’ll be by way of either of the following:


  • A Refundable Accommodation Contribution (RAC).
  • RAC is a financial contribution to your accommodation. If you’re eligible for RAC, then you don’t need to contribute the full cost of your accommodation.
  • It’s a lump sum payment.


  • A Daily Accommodation Contribution (DAC):
  • This is a daily contribution to accommodation costs.
  • Payments are periodical.

Extra Fees 

Aged care homes may offer extra services that they charge for. These are on top of the services that the aged care home must provide to you.

Aged care homes might offer a higher standard of service. Thus, services such as better quality meals, and premium accommodation may apply. These services will incur an extra daily fee. 

Finally, be sure to research extra fees before entering into a resident agreement. Take a look at How much it will cost you to recieve aged care support services.


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