Understanding Aged Care Fees and Charges

Transitioning from independence to permanent Aged Care can be an emotional and stressful process for all involved. Critical lifestyle and financial decisions need to be made in a short space of time.

If you or a loved one are entering Aged Care in Australia, you would know by now that the process is a minefield, to say the least. One of the most complex areas is understanding the fees that have to be paid.

Often when we first seek information, we can feel bombarded with information, which we then have to try to piece together, or on the flip side have received little to none or inadequate information. Both scenarios can make the whole process overwhelming and confusing.

Meeting with a Financial Planner, such as Moneyplan, can assist you to understand how the fees are assessed and provide advice on improving cashflow, redeeming investments, understanding your reporting requirements to Centrelink and dealing with the Aged Care facility on your behalf.

The four Aged Care fee components are as follows:

Basic Daily Care Fees

Every resident is charged a daily fee which is currently $60.86 per day. (as at 1/10/2023) This is capped at 85% of the Centrelink Full single Age Pension and is revised in March and September each year. This covers the day-to-day services received at the home.

Accommodation Payment

This was formerly known as the bond paid to the facility. The amount paid depends on your assessed income and assets. This can be paid the following ways:

  • Refundable Accommodation Deposit (RAD) – this option involves paying a contribution or full payment towards the requested room cost.
  • Daily Accommodation Payment (DAP) – the DAP is calculated as the interest payable on the unpaid RAD. The current interest rate as of 1st January 2024 is 8.38%. This is determined by the government.

Payments made to accredited Aged Care homes are government guaranteed and repaid in full upon death or moving to another facility.  In some circumstances, some types of fees can be deducted from the RAD lump sum and this means that less than 100% of the amount paid is refunded.

Means Tested Care Fee

This is calculated by the Centrelink Aged Care Assessment team and is determined based on the resident’s income and assets. This fee varies depending on your means and can be a minimum of $0 per day to a maximum of $400.08 per day. The Means Tested Care Fee has an annual cap of $32,718.57 and a lifetime cap of $78,524.69

Extra Services or Additional Services Fee

Some aged care homes will offer extra service rooms and can charge for a bundle of upgraded services provided; for example, higher quality linen or a daily newspaper. This fee can be required or optional depending on the facility.

Which fees apply to you?

It is not an easy question.  Some residents may only be charged the basic daily care fee and others will be charged more.  To ensure you are paying the correct fees, we encourage you to seek advice from a financial planner specializing in Residential Aged Care.  This can give you peace of mind that you are making the right decisions and confidence that you will have sufficient funds to pay for Aged Care well into the future.

Homestyle’s preferred Partner Lauren Ainsworth from is MoneyPlan, Industry leaders in financial strategies for residents in Aged Care.  Email Lauren at

If you would like to know more about our homes and accommodation options, please call us on 1300 104 663 or visit us here.


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