What aged care actually costs — and what's covered
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.
Cost is one of the first things families ask about aged care — and one of the most misunderstood. The short answer: the system is means tested, which means what you pay depends on your income and assets. But the design is that no one goes without care because they can't afford it.
The family home exemption — the most important thing most families don't know
The family home is not counted for home care means testing. For residential care, the family home is exempt from the assets assessment if a spouse, dependent child, or eligible carer continues to live there. This is one of the most commonly misunderstood and most significant protections in the system.
The carer exemption has a key condition: the carer must have lived in the home for at least 2 years prior to the person entering residential care, and would need to move if the exemption did not apply. The carer does not need to be a family member. Source: Services Australia ↗
If no exempt person lives in the home: the property is counted as an asset for means-testing purposes after a 2-year exemption period from the date the person entered residential care. After 2 years, it is included in the assets assessment regardless.
Support at Home — home care costs
Support at Home is means tested on income only — not assets. The family home is excluded. The basic daily fee is approximately $12.86/day. An income-tested fee may also apply, calculated by Services Australia based on your income assessment. The government subsidises the rest.
Indicative annual budgets by level:
- Levels 1–2: ~$11,000–$17,000/year
- Levels 3–4: ~$23,000–$35,000/year
- Levels 5–6: ~$43,000–$57,000/year
- Levels 7–8: ~$65,000–$78,000/year
These are the government budgets — your contribution reduces this amount.
Residential aged care costs
Residential aged care has three components:
- Basic daily fee: approximately $65/day (indexed annually). Everyone pays this.
- Means-tested care fee: calculated by Services Australia based on income and assets. Capped annually and over a lifetime.
- Refundable Accommodation Deposit (RAD): a lump sum paid to the facility. 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. Typical range $350,000–$750,000 depending on location and facility. You can pay this as a daily accommodation payment (DAP) instead if you prefer.
Who pays very little
If someone is on a full Age Pension with limited assets, they will receive heavily subsidised care. The basic daily fee (~$65/day) is the main contribution. No large RAD is expected. The system is designed so that financial position does not determine access to care.
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