Aged care costs and funding — what you actually pay
General information only. Not financial, legal or medical advice. Your situation is unique — consider speaking with an aged care specialist, financial adviser or your GP before making decisions. Information is current as at April 2026 and may change. Always verify with My Aged Care (myagedcare.gov.au) or Services Australia (servicesaustralia.gov.au) for the most current details.
The short answer
How much you pay depends on two things: which type of care you're accessing (home care or residential), and your income and assets. The government subsidises most aged care costs — you pay a contribution, not the full cost.
Home care costs
If you're receiving a Home Care Package (HCP), you pay a basic daily fee — currently $12.55 per day ($4,581 per year) — regardless of your financial situation. Everyone pays this.
You may also pay an income-tested fee if your income exceeds $32,331 per year (single). This is calculated by Services Australia based on your income assessment. The maximum income-tested fee is $15.57 per day.
If you're on the full Age Pension ($29,754/year), your income is below the income-free threshold. You pay the basic daily fee only — approximately $384 per month.
Assets are NOT tested for home care. Only income.
Residential aged care costs
Residential care has three separate fees:
- Basic daily fee — $66.80/day ($24,382/year). Everyone pays this. Can be paid directly from pension.
- Means-tested care fee — based on both your income AND assets. Calculated by Services Australia. Not everyone pays this.
- Accommodation costs — RAD or DAP (see below). If your income is below $35,313 AND assets below $64,500, the government covers your accommodation.
RAD and DAP — what are they?
If you're moving into residential care and are not eligible for government accommodation assistance, you pay for your room via either:
A lump sum payment for your room. The RAD is refundable when you leave care. If you entered care before 1 November 2025, your RAD remains 100% refundable. If you entered care on or after 1 November 2025, the RAD balance is reduced by 2% of the amount paid each year for the first five years — a maximum retention of 10%. The balance can also be reduced if you agreed to have ongoing fees deducted from your RAD. Average RAD in Australia is around $470,000 — varies widely by location and facility.
Rules current as at November 2025. Always verify current rates with My Aged Care or a financial adviser.
A daily fee instead of a lump sum. Calculated as: RAD amount × 8.09% ÷ 365. For a $500,000 RAD, this is approximately $110/day. Not refundable.
You can also pay a combination — part RAD, part DAP. Most people choose based on their cash position and what their investments earn.
The lifetime cap
From 1 November 2025, there is a lifetime cap of $135,318 on non-clinical care contributions in residential aged care. Once you reach this cap, you stop paying the means-tested care fee.
Getting your actual costs
These are estimates. Your actual costs are determined by a formal means assessment from Services Australia. You can request this assessment before you enter care.
Call My Aged Care on 1800 200 422 to start your assessment. Or use our free cost calculator to get an indicative estimate first.
Try the free aged care cost calculator →
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