Overview: aged care fees, costs, and charges
If you are trying to work out aged care fees — or what aged care costs for your parent or partner — you are usually looking for one national answer. The charges are not a single price. They are three separate amounts, and the government rates are the same in every state.
Most families pay between $30,000 and $120,000 per year for residential aged care, depending on income, assets, and the room. That range is wide because the cost is not a flat fee. If a parent or partner has just been assessed, start with the three building blocks below — then use the calculator when you want numbers for your own situation.
Room prices differ by city and facility. If you already know the state, the Victoria, New South Wales, and Western Australia cost guides cover local RAD ranges. The daily fee and means-test rates on this page are the national ones.
- Basic daily fee — everyone pays this. Set at 85% of the Age Pension.
- Means-tested care fee — paid only by those above income/asset thresholds. Always capped.
- Accommodation cost — the room cost (RAD lump sum and/or daily DAP). Varies by facility.
Before you commit to a facility, Services Australia will conduct a means assessment of the person entering care. This determines which fees apply and how much. You will receive a fee advice letter setting out the assessment — always request this before signing an agreement.
1. Basic daily fee
The basic daily fee is the national living-cost rate. It is charged to every resident, regardless of income or assets, and it is the same at every facility in Australia. It covers day-to-day living costs: meals, laundry, utilities, cleaning, and general personal care. Think of it as the board-and-lodging component of aged care.
This fee does not vary based on the level of nursing care needed or the type of room. Whether a resident requires high-level dementia care or low-level assistance, the basic daily fee is the same. It is the one cost that no resident can avoid.
| Period | Daily rate | Annual rate |
|---|---|---|
| From 20 March 2026 | $66.80 | $24,398.70 |
| From September 2025 | $63.57 | $23,203 |
The rate is set at 85% of the single Age Pension and increases automatically in March and September each year, in line with pension indexation. At $66.80 per day, this works out to roughly $467 per week or $2,033 per month.
For a full Age Pensioner receiving $31,223.40 per year, the basic daily fee alone ($24,398.70) represents about 78% of the pension. The Age Pension is specifically designed to cover most of this fee — the pension supplement and energy supplement help bridge the remaining gap.
2. Means-tested care fee
The means-tested care fee (MTCF) is the fee that varies most between residents. If your income and assets are modest, you may pay nothing at all. If they are substantial, this fee can add tens of thousands of dollars per year, but it is always subject to annual and lifetime caps, so no one pays an unlimited amount. For the full walkthrough of income and assets tests, lifetime caps, and worked examples, use the means-tested care fee guide as the deep page. This section is the short national overview.
Who pays it?
The MTCF only applies if your income or assets exceed government-set free thresholds. If both your income and assets fall below these thresholds, your means-tested care fee is $0.
| Threshold | Single | Couple (per person) |
|---|---|---|
| Income free area | $35,313.20/yr | $34,585.20/yr |
| Asset free area | $64,500 | $64,500 |
- Income free area
- $35,313.20/yr
- Asset free area
- $64,500
- Income free area
- $34,585.20/yr
- Asset free area
- $64,500
Most full Age Pensioners earning $31,223.40 per year fall below the single income free area, so for them the MTCF is driven entirely by the assets test.
How it is calculated
Services Australia runs two separate tests — an income test and an assets test — then adds both results together. The formulas are:
Assets test: (Assessable assets − $64,500) × 17.5%
Thresholds shown are for a single person. For an illness-separated couple, each partner is assessed individually against the couple (per-person) free areas above.
Both results are added together to determine your total MTCF — but the combined amount is always subject to the caps below. For a detailed worked example of both tests, see our Means-Tested Care Fee guide.
| Cap type | 2026-27 amount |
|---|---|
| Annual cap | $35,910.43 per year |
| Lifetime cap | $86,185.23 total |
The annual cap means that no matter how high your income or assets, you will never pay more than $35,910.43 per year in means-tested care fees. The lifetime cap of $86,185.23 accumulates across all aged care services you have ever received — including Support at Home and any earlier home care package. Once reached, your MTCF drops to $0 permanently.
3. Accommodation costs and room prices (RAD and DAP)
Aged care accommodation costs are the room price, separate from care fees, and they are set with the facility — not as a national rate. Accommodation is often the single largest variable in aged care costs. A metro facility may ask $700,000 or more for a room; a regional facility might ask $200,000. There are three ways to pay.
| Option | Description | Refunded? |
|---|---|---|
| Full RAD | Lump sum upfront (e.g. $550,000) | Yes — in full on exit |
| Full DAP | Daily amount = RAD × MPIR ÷ 365 | No |
| Combination | Partial lump sum + DAP on remainder | Partial |
What is the RAD?
The Refundable Accommodation Deposit (RAD) is essentially an interest-free loan to the aged care facility. You pay the full room price as a lump sum when you enter, and it is refunded in full when you leave or pass away (minus any outstanding fees). The facility uses this capital to fund its operations, but the money remains yours. For more detail, see RAD Explained Simply.
What is the DAP?
The Daily Accommodation Payment (DAP) is the rental alternative to paying a lump sum. It is calculated using the Maximum Permissible Interest Rate (MPIR), currently 8.43%:
Example: $550,000 × 8.43% ÷ 365 = $127.03 per day ($46,365 per year)
Unlike the RAD, the DAP is a genuine ongoing cost — it is not refunded. At the current MPIR of 8.43%, the DAP is significant. This is why the RAD-vs-DAP decision is one of the most important financial choices families face.
The combination option
You do not have to choose all-RAD or all-DAP. Many families pay a partial RAD and a DAP on the remainder. For example, on a $550,000 room you could pay a $200,000 RAD and a DAP on the remaining $350,000 — which works out to $80.84 per day ($29,505 per year). The $200,000 RAD portion is still refunded on exit.
| Region | Typical RAD range |
|---|---|
| Metro Sydney / Melbourne | $400,000 – $850,000+ |
| Metro Brisbane / Adelaide / Perth | $350,000 – $650,000 |
| Regional cities | $200,000 – $450,000 |
| Rural / remote | $100,000 – $300,000 |
What do aged care costs add up to?
Total aged care costs depend on your parent or partner's situation — particularly assets, the room price, and how you pay for accommodation. Here are four common scenarios to give you a realistic national range.
| Situation | Approximate annual total |
|---|---|
| Full pensioner, low assets, regional facility (partial RAD) | $25,000 – $35,000 |
| Low income/assets, full DAP at metro facility | $45,000 – $65,000 |
| Moderate income/assets, full RAD (no DAP) | $30,000 – $45,000 |
| High income/assets, full DAP at premium metro facility | $80,000 – $120,000 |
The biggest single driver of total cost is the accommodation decision. Paying the RAD as a lump sum eliminates the DAP, which can reduce ongoing costs by $30,000 to $50,000 per year. The trade-off is that the RAD capital is tied up in the facility earning no interest — though it is refunded in full on exit.
Annual and lifetime caps
The government caps the means-tested care fee to ensure no one pays a disproportionate amount for care. There are two caps — one annual and one lifetime — and understanding them can change your financial planning significantly.
| Cap | Amount | What it means |
|---|---|---|
| Annual cap | $35,910.43/yr | Maximum MTCF payable in any one financial year |
| Lifetime cap | $86,185.23 | Cumulative total across all aged care services ever received |
Once you reach the lifetime cap, your means-tested care fee drops to $0 for the rest of your time in care. This is significant for long-stay residents. At the maximum annual fee of $35,910.43, the lifetime cap is reached in approximately 2 years and 5 months — meaning residents who stay longer than this will see a meaningful reduction in ongoing costs.
How to reduce your fees
There are several legitimate strategies to reduce aged care costs. Some are straightforward, others require professional advice. Here are the five most impactful.
- Pay the full RAD to eliminate the DAP. At the current MPIR of 8.43%, a $550,000 RAD eliminates $46,365 per year in DAP costs. If you can fund the RAD from home sale proceeds or other capital, this is often the single most effective cost-reduction strategy — and the RAD is fully refunded on exit.
- Understand home exemption timing. The family home is exempt from the asset test for up to 2 years if vacated and not rented. Selling or renting too early can push up the means-tested care fee immediately. See our Family Home guide for the full rules.
- Be aware of the gifting rules. Centrelink counts gifts over $10,000 in a single financial year (or $30,000 over a rolling five-year period) as still belonging to the person for asset test purposes. Transferring assets to family members before entering care rarely reduces fees.
- Compare facilities. RAD prices vary enormously between facilities in the same area — sometimes by hundreds of thousands of dollars. Comparing two or three facilities can save a significant amount in accommodation costs. All RAD prices are published on the My Aged Care website.
- Get professional advice. An accredited aged care financial adviser can model different scenarios specific to your situation. The cost of advice (typically $2,000 to $5,000) can save tens of thousands over the course of a stay. Look for advisers accredited by the Aged Care Steps or similar professional bodies.
Next steps
Aged care planning is stressful, especially when you are making decisions quickly for a parent or partner. You do not need to understand everything at once — but taking these steps early will help you feel more in control.
- Get a personalised estimate — use our free aged care cost calculator to see what fees will actually apply to your situation.
- Read the detailed guides on the topics that matter most to you: means-tested care fee, RAD explained, couples rules, or the family home.
- Request a means assessment from Services Australia (phone 1800 227 475) to get your official fee advice letter.
- Consider an aged care financial adviser if your situation involves significant assets, a family home, or couple-specific complications.