Costs and fees

How does the aged care means test work?

Updated 24 August 2026

The maximum means tested care fee in residential aged care is $372.03 a day, and the most any resident can be asked to pay in means tested care fee is $35,910.43 in a year or $86,185.23 across a lifetime, under the 1 July 2014 fee arrangements. Those are the current rates published by My Aged Care, retrieved 23 August 2026. The means tested care fee varies from resident to resident, runs from $0 to $372.03 a day, and some residents pay none of it. Residents under the 1 November 2025 fee arrangements pay two means tested amounts instead: a hotelling contribution capped at $22.15 a day, and a non-clinical care contribution capped at $107.32 a day. Services Australia decides which of those amounts you pay by assessing your income and your assets. The basic daily fee sits outside the means test and is charged to every aged care home resident regardless of means.

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Which aged care fees are means tested, and which are not

The basic daily fee is not means tested, and the means tested care fee, the hotelling contribution, the non-clinical care contribution and your accommodation costs all are. Which of those means tested lines you face depends on whether you entered residential aged care under the 1 July 2014 or the 1 November 2025 fee arrangements, so the two sets of means tested amounts never fall on the same resident. Each line sits inside what an aged care home costs a resident.

• The basic daily fee is not means tested. Every resident of an aged care home pays the basic daily fee, whatever their means, which puts it on the bill in all 2,590 homes the Elderberry directory lists across 708 providers and 224,493 places (pulled August 2026). The basic daily fee rate equals 85% of the basic age pension's single person rate, and the government re-indexes it every 20 March and 20 September. At current rates, retrieved 23 August 2026, the basic daily fee tops out at $66.80 a day, which is $24,382 across a year. The rate follows the pension, so a self funded retiree and a full pensioner in the same home pay the same basic daily fee.
• The means tested care fee is means tested, under the 1 July 2014 fee arrangements. My Aged Care puts the means tested care fee between $0 and $372.03 a day, at current rates retrieved 23 August 2026. The fee is different for everyone and not every resident pays it, because the amount follows the means assessment result. Annual and lifetime caps limit the means tested care fee on top of that daily range.
• The hotelling contribution and the non-clinical care contribution are means tested, under the 1 November 2025 fee arrangements. A resident under the 1 November 2025 fee arrangements pays these two means tested amounts in place of the means tested care fee. The hotelling contribution is capped at the hotelling supplement, $22.15 a day at current rates retrieved 23 August 2026. The non-clinical care contribution is capped daily at $107.32 at those same rates. Each cap limits the amount that can be charged on any single day, and the means assessment sets where inside that range your own contribution lands.
• Accommodation costs are means tested through your low means status. The means assessment decides who pays for aged care in Australia for the accommodation line. The Australian Government covers your accommodation costs in full when your income sits below $35,521.20 and your assets below $64,500.00, at current rates retrieved 23 August 2026. Your low means or not low means status is fixed by the income and assets you hold on the day you enter an aged care home. It holds while you remain in that home, whatever happens to your finances afterwards.

Which of these fee arrangements applies to you depends on when you entered residential aged care. My Aged Care states that people entering residential aged care from 1 November 2025 fall under one of two different types of fee arrangements. The 1 November 2025 arrangements consist of the basic daily fee, the hotelling contribution, the non-clinical care contribution and a higher everyday living fee. The 1 July 2014 arrangements use the means tested care fee. Each of these amounts is a separate line in the cost of aged care, and only some of them respond to what you own.

Who does the aged care means assessment, and what happens after it?

Services Australia performs the aged care means assessment for most people, and the Department of Veterans' Affairs handles it for anyone receiving a means tested DVA payment. The assessment uses form SA457 if you are a self funded retiree, or form SA485 if you are a pensioner who owns your home. Services Australia collects your income and asset details on that form and returns a result that sets your contribution.

Completing a means assessment is not mandatory. If you choose not to complete one, My Aged Care states that you can then be asked to pay at the maximum contribution rate, and that anyone who withholds the information pays at the highest rates. Declining to disclose your income and assets to Services Australia also classifies you as means not disclosed, which removes your eligibility for government support with accommodation costs. A resident with modest means who declines therefore pays as though they held substantial means, on both the care line and the accommodation line.

Once your assessment is complete, Services Australia sends you a fee advice letter setting out the fees you will be asked to pay. A pre-entry fee advice letter expires 120 days after the date of your assessment, so an assessment completed well before you move in can lapse before you use it. That letter carries the numbers you work with when you decide how to pay for an aged care home place.

Your obligation continues after the assessment. You must tell Services Australia or DVA about any change in your personal or financial circumstances, and you have 28 days to do it. From 1 November 2025 that reporting is a legal requirement. Reporting inside the 28 days protects you as well: if you report a change in time, any resulting fee increase will not be backdated.

What counts as an asset in the aged care means assessment?

All of your assets are considered in the residential aged care means assessment, with special rules applying in some situations. The assessable list includes bank, building society and credit union accounts, superannuation, investment property, household contents and personal effects, and any refundable accommodation deposit you have already paid to an aged care home. Rules then convert those holdings into an assessed amount, and these are the main ones.

• Financial assets are assessed on a deemed rate of income. The assessment applies a deemed rate of income to your financial assets, so the interest a bank account actually earns is left out of the calculation. A term deposit paying below the deemed rate is assessed as though it earned the deemed rate, and a high performing investment is assessed the same way.
• Couples are assessed on half the combined total. The assessment includes half of your combined income and half of your combined assets, whoever earns the income and whichever partner's name holds the asset. Moving an asset into a partner's name before entry leaves the assessed amount unchanged.
• The family home counts only up to a capped amount. If you keep your family home, the means assessment includes it at its net market value, up to a ceiling of $214,884.00 that applied as at 20 March 2026. A home worth well above the ceiling is assessed at the ceiling.
• A protected person removes the home from the assessment entirely. Your home is not counted as an asset at all while a protected person occupies it. A protected person includes a partner or dependent child, and a carer who is eligible for an Australian Government income support payment and has been living with you in the home for at least 2 years.
• Recent gifts still count. A gift of more than $10,000 within the last financial year counts, and so does more than $30,000 given across the last five financial years. Either amount stays in the means assessment as a financial asset. Services Australia states that giving income or assets away may still leave them counting in your income and assets tests, and that selling something for less than its worth is treated the same way.

How much money can you have in the bank for aged care?

No single bank balance decides your aged care fees. The means assessment reads your bank accounts as one input among all your assets. Bank, building society and credit union accounts are treated as financial assets and assessed at a deemed rate of income, so the balance affects both the income side and the asset side of the calculation.

Two amounts do act as thresholds. If your income is below $35,521.20 and your assets below $64,500.00, at current rates retrieved 23 August 2026, the Australian Government pays your full accommodation costs. Above either of those amounts the government stops paying your accommodation costs in full, and you contribute towards them. My Aged Care states that both the income amount and the asset amount change with indexation.

Is there a cap on aged care fees in Australia?

Yes. Under the 1 July 2014 fee arrangements the means tested care fee is capped at $35,910.43 a year and $86,185.23 over a lifetime, at current rates retrieved 23 August 2026. The Department of Health and Aged Care states that reaching the annual cap sets a resident's means tested care fee to zero. Payment restarts each year on the anniversary of the resident's first entry into aged care. Any income tested care fee you already paid on a Home Care Package prior to 1 November 2025 counts against both caps.

Three qualifications sit on those caps. First, indexation moves both caps on 20 March and on 20 September every year. The cap amount that binds you is whichever one is current on the day you reach it. Second, the caps bite only on means tested fees and contributions: a resident who has reached the cap keeps paying the basic daily fee, plus accommodation costs and any other fees agreed with the home. Third, the 1 November 2025 arrangements cap on a different pattern. The non-clinical care contribution carries no annual cap at all, so nothing resets each year in the way the means tested care fee does. What ends the non-clinical care contribution is the lifetime figure: contributions stop once they total $137,917.01, an indexed figure at current rates retrieved 23 August 2026, or once 4 years of cumulative contributions have accrued, whichever comes first.

Residents who entered care before 1 July 2014 pay an income tested fee. The income tested fee carries its own daily cap, fixed at 135% of the basic age pension single rate, which is $106.10 a day at current rates retrieved 23 August 2026. That daily cap limits the income tested fee charged on any single day. The annual and lifetime caps apply to the means tested care fee under the 1 July 2014 arrangements.

Is Support at Home means tested?

Yes. Home care under the Support at Home program is means tested through a separate income and assets assessment, and My Aged Care states that you need one to work out how much you contribute towards Support at Home services. The Support at Home assessment applies the same principle as residential care, that your contribution rises with your assessed means, through a different instrument.

One difference matters most for people deciding whether to stay at home. The Support at Home program exempts your principal home from its asset tests. In the residential aged care means assessment, the same house is counted up to $214,884.00, the ceiling in force as at 20 March 2026, unless a protected person occupies it.

Common questions

How can I legally reduce assets for aged care?

The residential aged care means assessment closes the obvious routes. Gifts beyond $10,000 in a single financial year, or beyond $30,000 over five financial years, remain in the assessment as a financial asset. Assets held in a partner's name are covered too, because the assessment counts half of a couple's combined income and assets, whoever holds them.

Two legitimate levers exist. Keeping the family home unrented after you move into aged care exempts it from the Age Pension assets test for 2 years. That exemption applies to your pension, and the aged care means assessment continues to apply its own home ceiling. Your low means status for aged care is also locked at your date of entry, so decisions made before entry carry weight that later decisions lose. Moneysmart states that professional financial advice can help you weigh the options against each other, and that you can contact a Financial Information Service officer at Services Australia for more information.

How much money can I have if I go into a care home?

Your income and assets set the size of your contribution, and the residential aged care means assessment is the instrument that converts them into it.

What your fees follow is the assessed amount, not your bank balance. Because the assessment counts the family home only up to $214,884.00 as at 20 March 2026, and leaves the home out altogether while a protected person lives in it, two residents holding the same total wealth can be assessed at different amounts depending on what that wealth consists of.

What happens if I cannot afford my aged care fees?

You can apply for financial hardship assistance. My Aged Care states that hardship assistance is open to residents who cannot meet aged care home costs for reasons outside their control.

Where do the current rates come from?

The Schedule of Fees and Charges for Residential Care is where the fees, charges, interest rates and thresholds for residential aged care are listed. The Department of Health and Aged Care publishes it, and the latest published schedule applies from 1 July 2026.

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