Costs and fees

What happens if you can't afford aged care?

Updated 24 August 2026

If you cannot afford aged care in Australia, you still get care. Government-subsidised aged care is granted on age, care needs and situation, and an aged care assessment settles which program a person qualifies for. Where the costs are beyond what a person can pay for reasons outside their control, the Australian Government can meet some or all of their contributions, fees and accommodation through financial hardship assistance. Services Australia pays that money straight to the aged care provider as a fee reduction supplement. Below the means assessment free areas, the government already covers a residential aged care resident's accommodation cost in full. The capped contributions also stop for good once a lifetime cap is reached. The practical answer runs in order: complete the means assessment, take up every other government payment the person is entitled to, then lodge a hardship claim with Services Australia for whatever gap is left.

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Can you be refused aged care because you cannot afford it?

No. Under the new Aged Care Act an older person has a right to an assessment that is fair and accurate in identifying which funded aged care services they need. That person also has a right to receive the care they need at the time they need it. The Statement of Rights binds providers too, who must ensure their actions are consistent with it.

Two short-term care programs show how the rule works in practice.

• Residential respite care. A residential respite resident pays a basic daily fee and nothing else. A respite provider cannot charge means tested contributions or accommodation costs at all. Services Australia can grant financial hardship assistance towards that basic daily fee.
• Transition care after a hospital stay. Access to transition care is not affected by a person's ability to pay fees. Under the Transition Care Programme, care delivered at home or in the community carries a maximum fee of $13.75 a day from 1 July 2026. Care delivered in a residential setting carries a maximum fee of $66.80 a day. My Aged Care expresses those two fees as 17.5% and 85% of the single age pension.

What every aged care resident pays, and what the government covers

Every resident of an aged care home pays the basic daily fee, whatever their means. The fee is set at 85% of the basic age pension paid to a single person, and the government reindexes it every 20 March and 20 September. From 1 July 2026 the basic daily fee is capped at $66.80 a day under the Department of Health, Disability and Ageing Schedule of fees and charges for residential care. The basic daily fee is the floor of what an aged care home costs. Accommodation payments and the means-based contributions sit on top of it.

The division between what the government pays and what a resident pays is settled by the aged care means assessment. For a resident assessed as low means, the government pays an accommodation supplement to the provider, capped at $72.30 a day from 1 July 2026. The resident may be asked to hand over some or all of that amount as an accommodation contribution. A resident who can afford their room is expected to pay for it. For people with fewer means, the government pays some or all of the accommodation cost.

Low means status is fixed on the day a person enters a particular aged care home. Means status is not revisited while the resident stays in that same home, whatever happens to their finances afterwards. Moving to a different aged care home requires a new means assessment. The first home a person enters therefore carries their means status for the whole of their stay, which makes the choice of home a financial decision as well as a care decision. The Elderberry directory lists 2,590 aged care homes, run by 708 providers and covering 224,493 places across Australia, pulled August 2026.

How much money can you have before you have to pay for care?

No single bank balance switches aged care fees on or off. Three separate thresholds do three different jobs, and each one measures something different.

• The annual income free area and the asset free area. These two amounts decide whether the government covers a residential aged care resident's accommodation cost in full. Where a resident's income sits below $35,521.20 a year and their assets below $64,500.00, the Australian Government covers the whole accommodation cost. Both amounts apply from 1 July 2026 under the Schedule of fees and charges for residential care, and indexation changes both amounts.
• The home exemption cap. This cap decides how much of a former family home is counted as an asset in the residential aged care means assessment. Where a person keeps the family home, the amount counted is the home exemption cap, which was $214,884.00 on 20 March 2026. Where the house is worth less than the cap, its net market value is counted instead. Value above the cap is left out, so an expensive house does not produce an unlimited assessed asset.
• The hardship asset threshold. This threshold decides who can claim financial hardship assistance. A person's assets must not exceed $46,835.10 once unrealisable assets are set aside, a figure My Aged Care equates to one and a half times the annual basic age pension including supplements. Services Australia treats the threshold as current at 20 March 2026 and indexes it in March and September each year.

The Age Pension assets test limits are a different instrument again. They set the point above which the Age Pension starts to reduce below the full rate. The income free area, the asset free area and the home exemption cap feed the residential aged care means assessment instead. None of the three thresholds above removes the basic daily fee, which applies to every resident of an aged care home regardless of means.

What happens if you run out of money in an aged care home?

Financial hardship assistance is the mechanism for a resident who cannot afford their aged care costs for reasons beyond their control. An eligible person has some or all of their contributions, fees and accommodation paid by the Australian Government. The payment is a fee reduction supplement, built for older people in financial hardship who cannot contribute to what their care costs.

Services Australia pays a granted hardship claim to the aged care provider on the resident's behalf. How much is paid turns on the resident's situation. The resident still pays whatever costs remain after the supplement is applied.

What financial hardship assistance covers depends on which fee arrangements apply to the resident. Under the 1 November 2025 fee arrangements it reaches the basic daily fee, the hotelling contribution, the non-clinical care contribution and accommodation costs. For the 1 July 2014 fee arrangements, My Aged Care lists the basic daily fee, the means tested care fee and accommodation costs, in any combination.

Which aged care fees stop at annual and lifetime caps?

Two of the means-based contributions in residential aged care are capped: the non-clinical care contribution, for residents on the 1 November 2025 fee arrangements, and the means tested care fee, for residents on the 1 July 2014 arrangements.

• The non-clinical care contribution, under the 1 November 2025 arrangements. The non-clinical care contribution is capped at $107.32 a day, and it ends when the resident's total contributions reach $137,917.01 or after four cumulative years of contributions, whichever happens first. Both figures apply from 1 July 2026 under the Schedule of fees and charges for residential care, and both caps are indexed twice a year, on 20 March and 20 September. Contributions a person paid earlier for aged care count towards the lifetime cap.
• The means tested care fee, under the 1 July 2014 arrangements. The means tested care fee is capped at $372.03 a day, $35,910.43 a year and $86,185.23 over a lifetime, all three from 1 July 2026 under the Schedule of fees and charges for residential care. Reaching the annual cap for a given year ends that fee for the rest of the year.

Once a lifetime cap is reached, the resident cannot be asked to pay any more of that contribution.

Who can get financial hardship assistance?

Financial hardship assistance is open to people whose assessable assets sit at or below the hardship asset threshold. Services Australia tests further conditions before it grants a claim, including whether the applicant can get financial assistance from another government program first.

• Whether an asset is unrealisable. An asset can be assessed as unrealisable where its owner can neither sell it nor borrow against it. A house that has sat unsold on the market for at least six months is the example My Aged Care gives. An unrealisable asset is left out of the hardship asset threshold, so a person whose money is locked inside an asset they cannot convert can still qualify.
• Whether assets have been gifted away. Gifting above the free areas makes a person ineligible for financial hardship assistance. Services Australia tests the gifting limits over a five financial year window that reaches back well before the year of the claim.
• What income is left after essential expenses. My Aged Care states that an aged care home resident left with more than 15% of the basic age pension after essential expenses may not be eligible for financial hardship assistance. A resident below that 15% line may instead be eligible for a full fee reduction supplement. For a Support at Home participant the same 15% line reduces the supplement to a partial one. My Aged Care quotes the 15% as $165.05 a fortnight. That page gives no effective date for the dollar amount, and the basic age pension behind it is indexed in March and September.

How to apply for financial hardship assistance

Applying for aged care financial hardship assistance runs through Services Australia in five steps.

1. Get a current calculation of the cost of care. Services Australia needs an up-to-date aged care calculation of the person's cost of care before it can assess a hardship claim.
2. Lodge form SA462. A person applies by completing form SA462, the Aged Care Claim for financial hardship assistance, and lodging it with Services Australia. The claim needs supporting evidence with it, including evidence of the applicant's expenses over the previous three months.
3. Let Services Australia check other government help first. Services Australia checks whether the applicant qualifies for financial assistance elsewhere before it grants hardship assistance towards aged care costs. That check covers whether the person has taken steps to access any pension, benefit or income support payment open to them.
4. Wait up to 28 days for the decision. Services Australia assesses the application within 28 days of receiving it and sends the outcome by letter. That timeframe is published on the My Aged Care financial hardship assistance page, retrieved 23 August 2026.
5. Re-claim before the assistance expires. Financial hardship assistance is granted for a set period. Services Australia's guidance on how long a grant lasts tells anyone who needs ongoing help to claim again before their current assistance ends, because otherwise they may have to meet their own costs while the new claim is checked. My Aged Care states the timing differently for a person already in care and receiving financial hardship assistance: that person does not need to re-apply until the current determination expires.

Support at Home participants are treated differently while a claim sits with Services Australia. A Support at Home participant owes no contributions while their application is being processed. A successful application backdates the fee reduction subsidy to the date of application.

How do you avoid selling the house to pay for a nursing home?

A person moving into residential aged care is not required to sell the family home to pay for it. Four rules limit what the home does to their costs.

• Only a capped amount of the home is counted. The home exemption cap, or the net market value of the house where that is lower, is the most the residential aged care means assessment can include, whatever the property is worth.
• A protected person takes the home out of the assessment. A home is not counted as an asset where a protected person occupies it. A protected person includes a partner, a dependent child, or a carer who is eligible for an Australian Government income support payment and has lived in the home with the resident for at least two years.
• The Age Pension assets test exempts the home for two years. A person who keeps the family home and does not rent it out keeps it outside the Age Pension assets test for two years from the date they moved into aged care. That two-year exemption comes from Moneysmart, last updated 18 August 2026. Selling the home puts its value back into the Age Pension assets test.
• Nobody has to pay a lump sum for a room. An aged care home cannot ask a person to pick their accommodation payment option before they move in. Until a refundable lump sum is paid, the resident pays non-refundable daily payments instead. The aged care means assessment counts a refundable lump sum as the resident's own asset, even where a family member provides the money.

A person who keeps the family home can also borrow against it. Services Australia's Home Equity Access Scheme lends against equity in Australian real estate, taking that property as security for the loan. The scheme is open to people who have reached Age Pension age. The loan is voluntary and not taxable, and it carries a no negative equity guarantee. Services Australia describes the current interest rate as 3.95% per annum, which compounds fortnightly against the loan balance until the whole loan is repaid. The page carrying that rate was last updated 5 September 2025 and gives no effective date for the rate itself, so a family should confirm the figure with Services Australia before relying on it.

How do you avoid aged care fees?

The higher everyday living fee is the aged care fee a resident can decline. The basic daily fee, accommodation costs and the means-based contributions are compulsory, and they are lowered through the means assessment and financial hardship assistance.

• The higher everyday living fee. A provider must not agree or charge a higher everyday living fee before the person has entered care. It cannot be made a condition of entry, and it cannot be used to secure a room. A 28-day cooling off period applies, so a resident can cancel or vary their higher everyday living services inside that period without a cancellation fee.
• Extra service fees and additional service fees. Financial hardship assistance cannot be paid towards extra and additional service fees, or towards the higher everyday living fee. My Aged Care adds one further exclusion. Hardship assistance is not available to a person living in a multi-purpose service.

Common questions

What happens to elderly people who run out of money?

An older person who runs out of money keeps getting aged care, and free government financial help is available before anything is decided. Two places inside Services Australia supply that help. Services Australia's Financial Information Service is free and open to everyone, and its officers explain how to make informed financial decisions. Appointments are booked by calling 132 300 and saying "Financial Information Service" when asked the reason for the call. Services Australia's Aged Care Specialist Officers also give free financial information.

How can I legally reduce assets for aged care?

The lawful ways to reduce assessable assets for aged care are the ones already written into the rules. Two of them are the exclusion of unrealisable assets from the hardship asset threshold and the cap on how much of the family home the residential aged care means assessment counts. Giving assets away is not a lawful reduction. A person is ineligible for aged care financial hardship assistance after gifting more than $10,000 in any one financial year, whether the current year or one of the four before it. The same disqualification applies after gifting more than $30,000 across five financial years, being this financial year plus the previous four. Those limits sit on the My Aged Care financial hardship assistance page and the Services Australia eligibility page, last updated 21 May 2026. Hiding assets carries its own price. Completing a means assessment is optional, and a resident with "means not disclosed" status loses government support for accommodation costs and for the contributions the means assessment would otherwise set. That resident can be charged the maximum contribution rate.

How much money can I have in the bank and get the full Age Pension?

A single homeowner can hold $333,000 in assessable assets and still be paid the full Age Pension, and a single non-homeowner $600,000. A homeowner couple can hold $499,000 combined and a non-homeowner couple $766,000 combined. Services Australia calls those amounts the assets test limits, and they count a person's assessable assets rather than their bank balance alone. Once assessable assets pass the limit that applies to a person's situation, the Age Pension starts to reduce below the full rate. The Department of Social Services reviews the limits three times a year, in March, July and September. The Services Australia assets test page carrying them was last updated 1 July 2026.

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Tell us the area and care needs; we match you with rated aged care homes and real availability.

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