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 Main Aged Care Fee Components (from 1 April 2026):
· All residents pay this fee to cover daily living services such as meals, cleaning, laundry, and utilities.
· The maximum fee is set at 85% of the single basic age pension. As of April 2026, this is $66.80 per day.
· This fee is indexed in March and September each year.
· The amount paid depends on your assessed income and assets. Low-means residents may have their accommodation costs subsidised by the government, based on a means assessment.
Residents may pay for their accommodation as a Refundable Accommodation Deposit (RAD), a Daily Accommodation Payment (DAP), or a combination.
· Refundable Accommodation Deposit (RAD) – this option involves paying a contribution or full payment towards the requested room cost. From 1 January 2026, providers will retain 2% per annum of the RAD for up to five years (maximum 10% retention), with the remainder refunded when you leave care.
· Daily Accommodation Payment (DAP) – the DAP is calculated as the interest payable on the unpaid RAD. The current interest rate as of 1st April 2026 is 7.96%. This rate is determined by the government. From 1st January 2026 DAPs will be indexed twice a year in line with inflation.
Payments made to accredited Aged Care homes are government guaranteed.
Hotelling Contribution (HSC)
· A new means-tested fee for everyday living costs (meals, cleaning, laundry, utilities).
· Maximum daily cap: $22.15 (as of January 2026).
· Only payable by residents with higher income/assets; low-means residents are exempt.
Non-Clinical Care Contribution (NCCC)
· Replaces the previous Means-Tested Care Fee.
· Covers personal care (bathing, mobility assistance, lifestyle activities).
· Maximum daily cap: $107.32
· Lifetime cap: $137,971.01 (including Support at Home contributions) or four years, whichever comes first.
· From 1 November 2025, additional and extra service fees are replaced by the Higher Everyday Living Fee (HELF).
· This is an optional, negotiated fee for enhanced or premium services (e.g., premium meals, entertainment, personal services).
· Existing additional/extra service agreements will be phased out by 31 October 2026.
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 specialising 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 lauren@moneyplan.com.au.
