Costs and fees

How do you pay for nursing home care?

Updated 24 August 2026

Paying for a nursing home in Australia means paying three separate amounts: a basic daily fee that every resident pays, means tested contributions towards daily living and care, and the price of the room. Residents choose how the room is paid for, either as a refundable deposit, as non-refundable daily payments, or as any combination of the two. The Australian Government pays the rest of the cost of care directly to the provider.

The basic daily fee is capped at $66.80 a day, or $24,382 a year, on current rates as at 23 August 2026. The rate equals 85% of the basic age pension's single person rate, and the government adjusts the fee on 20 March and 20 September each year. A means assessment of income and assets determines whether a resident pays anything towards accommodation. A resident with income under $35,521.20 and assets under $64,500.00 has their full accommodation costs paid by the Australian Government. Those amounts are current as at 23 August 2026 and change with indexation.

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What fees does an aged care home charge?

An aged care home charges three streams of fees: a basic daily fee, means tested contributions, and a price for the room. The government sets the basic daily fee, a means assessment sets the contributions, and the home sets its room prices. Together they make up the aged care costs a resident is charged.

• The basic daily fee. Every aged care home resident pays the basic daily fee, regardless of their means. My Aged Care publishes its current maximum along with the indexation dates that change it.
• Means tested fees and contributions. What a resident contributes towards daily living and care depends on their means assessment and on which fee arrangements apply to them. Under the 1 November 2025 fee arrangements the contributions are a hotelling contribution and, for some residents, a non-clinical care contribution. The 1 July 2014 fee arrangements instead carry a single means tested care fee.
• Accommodation. The room carries its own price, agreed in writing with the provider before entry, and paid either as a refundable lump sum or as daily payments.

Residents on the 1 November 2025 fee arrangements are not charged for clinical care, which the government funds in full. Where a resident pays no means tested fees at all, the government funds the whole cost of their care and pays their provider directly. Where a resident does pay a means tested fee as well as the basic daily fee, the government covers the remainder.

Which fee rules apply depends on when you entered care

A resident who moved into an aged care home on or after 1 November 2025 pays under the 1 November 2025 fee arrangements. Anyone who entered before that date, along with protected Home Care Package holders, stays on the 1 July 2014 fee arrangements under the no worse off principle. Their resident fees and accommodation costs stay the same while they remain in care, unless they opt in to the newer arrangements.

The rates below are the current rates published by My Aged Care as at 23 August 2026. The government changes them with indexation in March and September each year.

Residents on the 1 November 2025 fee arrangements can be asked for two means tested contributions:

• The hotelling contribution. The hotelling contribution is a means tested contribution towards daily living services, capped at the hotelling supplement, which is $22.15 a day. A resident's means assessment decides whether they are asked to pay the contribution at all, or whether the government keeps paying the full hotelling supplement in their place.
• The non-clinical care contribution. A resident whose means assessment results in them paying the full hotelling contribution may also be asked to contribute towards their non-clinical care. The contribution leaves out clinical care costs and carries a daily cap of $107.32. It stops permanently once a resident's total contributions reach $137,917.01 (indexed), or once they have paid it for 4 cumulative years, whichever comes first, and fees paid under Support at Home count towards that lifetime total. From that point the government pays the full cost of the resident's non-clinical care.

Residents on the 1 July 2014 fee arrangements pay one means tested amount instead, the means tested care fee. That fee falls between $0 and $372.03 a day, depending on the means assessment, and it is capped at $35,910.43 in a year and $86,185.23 over a lifetime.

These caps apply only to means tested fees and contributions. A resident who reaches a cap keeps paying the basic daily fee, the accommodation costs and any other fees they have agreed.

How do you pay for the room in an aged care home?

A resident meets the agreed room price in one of three ways: as a refundable deposit paid in a lump sum, as non-refundable daily payments, or as any combination of the two. The price itself is agreed in writing with the provider before entry. A resident and their provider can negotiate and agree a lower price, and a home cannot charge more than its published price for that room. From 1 July 2026 to 30 June 2027 the maximum accommodation payment a provider can charge without approval is $789,686, as published by the Department of Health and Aged Care. That maximum is indexed on 1 July each year, and charging above it requires approval from IHACPA, the Independent Health and Aged Care Pricing Authority.

Room prices differ by home and by room. The Elderberry directory counts 224,493 aged care places across Australia (pulled August 2026), and the amount a resident pays is the price written into the agreement for their room.

The three options differ in what a resident gets back when they leave the home:

• A refundable deposit (RAD or RAC). The resident pays an amount as a lump sum, and the balance is refunded when they leave the aged care home. Any amounts deducted from the lump sum are not refunded. Anyone who first enters residential aged care from 1 November 2025 onwards and pays a refundable deposit, in full or in part, has 2% per annum of the balance retained by the provider. Retention stops entirely after 5 years.
• Non-refundable daily payments (DAP or DAC). Daily payments work like rent payments, and they are not refunded when the resident leaves care. The daily payment is the maximum permissible interest rate (MPIR) applied to the agreed room price, divided by 365. The MPIR that applies to a resident's daily accommodation payment is fixed at the date they agree a room price with their provider. For people who first enter care on or after 1 November 2025, providers raise the daily accommodation payment with indexation on two dates each year, 20 March and 20 September. That indexation does not apply to daily accommodation contributions.
• A combination of the two. A resident can combine a refundable lump sum with daily payments to meet the room price, and can split the combination any way they choose.

The choice does not have to be made at the door. A resident cannot be asked to choose their payment option before they move into an aged care home. Until a refundable lump sum is paid, the resident pays by non-refundable daily payments, and the lump sum can be paid in full or in part at any time after entering care.

Is aged care means tested?

Yes. Aged care home contributions and accommodation assistance are means tested, and the assessment determines how much a resident pays and how much the Australian Government contributes. For most people Services Australia carries out the means assessment. The Department of Veterans' Affairs carries it out for people who receive a means tested payment from DVA.

• Completing the assessment. Completing a means assessment is not mandatory. A person who chooses not to complete one can be charged at the maximum contribution rate.
• Couples. The assessment includes half of a couple's combined income and assets. It does not matter which partner earns the income or whose name holds the asset.
• Money in the bank. The assessment applies a deemed rate of income to financial assets, so what an asset actually earns is not counted.
• Gifts. A gift larger than $10,000 within the last financial year stays in the assessment, and so does anything above $30,000 across the last five financial years. Money given away in those amounts is still counted as a financial asset. My Aged Care published those gifting limits as at 23 August 2026.

Do you have to sell the family home?

No. Where a resident keeps the family home, the means assessment counts it at $214,884.00 or at the house's net market value, whichever is lower. That capped figure applies as at 20 March 2026. The home is not counted as an asset at all if a protected person occupies it, such as 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 2 years.

Moneysmart sets out the home as one source of accommodation money among several. A family may sell the home or use its value to pay the refundable deposit, or rent the home out to help cover the daily accommodation payment. Because daily payments run until a refundable deposit is paid, and the deposit can be paid in full or in part at any time after entry, a decision about the home can wait until after the move.

A family member is not prevented by the new Aged Care Act from paying part or all of a resident's accommodation costs. A refundable lump sum still counts as the resident's own asset under the aged care means assessment, including where a family member provides the money.

What happens if you cannot afford aged care?

Financial hardship assistance covers people who cannot afford their aged care costs for reasons beyond their control. Where a person is eligible, the Australian Government pays some or all of their contributions, fees and accommodation.

To be eligible to apply, a person must have had a means assessment, must own no more than $46,835.10 in assets, leaving out unrealisable assets, and must not have exceeded the gifting limits. The asset limit equals the annual basic age pension with supplements multiplied by 1.5, as published by My Aged Care at 23 August 2026. Applications go to Services Australia on form SA462, the Aged Care Claim for financial hardship assistance, and Services Australia assesses them within 28 days.

Common questions

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

No single bank balance decides what a resident pays, because the means assessment combines money in the bank with the rest of a resident's income and assets. Money in the bank counts as a financial asset, with a deemed rate of income applied to it. One threshold does speak directly to a bank balance: the Australian Government pays a resident's full accommodation costs where income sits under $35,521.20 and assets under $64,500.00. Those are the current amounts as at 23 August 2026, and they change with indexation.

What is the average cost of nursing home care in Australia?

Aged care home fees are set per resident and per room, so what a nursing home costs is read from three published inputs. The first is the basic daily fee, at a maximum of $66.80 a day on current rates as at 23 August 2026. The second is the room price, which each home publishes and which cannot exceed $789,686 between 1 July 2026 and 30 June 2027 without IHACPA approval. The third is the means tested amount, set by the resident's means assessment under whichever fee arrangements cover them. Some residents on the 1 November 2025 fee arrangements pay a hotelling contribution of up to $22.15 a day. Those paying the full hotelling contribution can also be asked for a non-clinical care contribution of up to $107.32 a day. Residents on the 1 July 2014 fee arrangements pay a means tested care fee of between $0 and $372.03 a day. Those rates are current as at 23 August 2026. The Elderberry directory lists 2,590 aged care homes run by 708 providers (pulled August 2026), each publishing its own room prices.

How much do you have to pay to get into a nursing home?

No lump sum has to be paid to move in. The room price must be agreed in writing with the provider before entry, and a resident cannot be asked to choose their payment option before they move in. The choice between a refundable lump sum and daily payments can be settled after entry.

Can you avoid aged care fees?

No. The basic daily fee applies to every resident of an aged care home, whatever their means. Giving money away does not reduce a means assessment either, because gifts above the gifting limits are still counted as a financial asset. Declining the means assessment raises what a resident pays, because skipping it can leave a person charged at the maximum contribution rate. The relief that does exist is written into the rules: the annual and lifetime caps on means tested fees and contributions, the income and asset thresholds at which the government pays full accommodation costs, and financial hardship assistance.

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