Commonwealth Government approved aged care facilities have different payment structures and arrangements. It is important that all consumers get the right advice prior to making a commitment to entering a Home.
The Australian Government subsidises a range of aged care services in Australia. If your personal circumstances allow, it is expected you’ll contribute towards the cost of your care if you can afford to do so. How much you pay depends on your financial situation. However, there are strong protections in place to make sure that care is affordable for everyone. The Australian Government sets the maximum fees for care and daily living expenses, and there are also rules about how much you can be asked to pay for your accommodation. From 1st November 2025 the following fee changes are effective.
What types of fees are there?
A basic daily care fee:
These covers living costs such as meals, power, laundry, cleaning and personal care.
Non-clinical contribution:
This is a new fee that replaces the Means-Tested Care Fee and helps pay for extra support and wellbeing activities that aren’t medical, like social events, hobbies and administration. This fee is on top of the basic daily fee and is determined by Services Australia. The amount is based on a person’s income and assets, and there’s a daily cap. You also stop paying after 4 years or $130,000, whichever comes first.
Unlike the basic daily fee, this isn’t a fixed cost, and it varies from person to person. The amount you pay depends on your personal financial situation, and if your assets, income or cost of care change, your fee may change too. Additional income and assessment tests might be required to ensure you are paying the right amount.
Accommodation Fees:
Depending on your income and assets you may be asked to pay an accommodation fee as part of your aged care fees. This is determined by Services Australia, and this fee helps cover your accommodation costs beyond care costs for personal and clinical care.
This fee is only payable if your income and assets exceed a certain amount. Your fees may be fully or partly covered by the Government depending on your financial circumstances.
Note: This fee will differ for each facility and the room type you choose.
If you need to pay an accommodation fee to help cover your aged care accommodation costs, there are three ways you can do so:
Refundable Accommodation Deposit (RAD)
A lump sum payment where the amount differs in each facility and is based on room pricing. It’s partly refunded once you leave with the aged care provider keeping 2% of that money each year for up to 5 years. There’s also a capped retention amount of up to 10%.
Daily Accommodation Payment (DAP)
A daily ongoing payment paid periodically (i.e. fortnightly or monthly) that’s based on a daily interest rate called the maximum permissible interest rate (MPIR). The DAP differs by facility and is based on room pricing. This payment isn’t refundable when you leave.
Combination payment
This is where you may choose to pay for your accommodation by using a combination of RAD and DAP payments, so you would pay a nominated lump sum and the rest of the balance as a daily payment. Only the RAD payment is refundable when you leave.
Hotelling Supplement Contribution
This is a new fee that covers daily living costs like meals, cleaning, gardening and laundry. Currently the government pays the Hotelling Supplement for all residents, but now it will only pay for those who are unable to afford to contribute.
Like other fees, it’s means-tested, so those with higher financial means contribute more to the cost of their accommodation. There’s also a daily maximum of $12.55 to keep it fair.
Higher Everyday Living Fee (HELF)
This is an optional fee you can pay for enhanced services beyond the standard care funded by the government. It replaces older fee structures (previously called the mandatory Additional Services fee) and covers higher-quality daily living options like premium food, lifestyle activities, wellness programs, and entertainment, allowing for more personalised care choices.