Costs and fees

Who pays for aged care in Australia?

Updated 24 August 2026

Aged care in Australia is funded jointly by the Australian Government and the person receiving care. The government pays subsidies and supplements directly to registered providers, and the person receiving care contributes what they can afford, so aged care is not free for most people. How much a person pays depends on the type of help they need, the provider they choose, their financial situation, and the services they receive. In an aged care home, every resident pays a basic daily fee, capped at $66.80 a day on the rates current on My Aged Care at 23 August 2026. Above that fee, some residents pay a means-tested hotelling contribution and a means-tested contribution towards personal care, and residents who can afford it pay an agreed room price. The Australian Government pays some or all accommodation costs for people of lower means, and can cover fees entirely for people approved for financial hardship assistance. Clinical care is met in full by the government under the 1 November 2025 fee arrangements.

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Who funds aged care in Australia?

For each permanent care resident, the Australian Government pays the provider a daily basic subsidy under the AN-ACC funding model, short for the Australian National Aged Care Classification. That subsidy and the other subsidies and supplements paid to registered providers go directly to the aged care home, so the government's share of the cost never passes through a family's bank account.

Because government funding to providers keeps the cost of care affordable, a resident is not asked to cover the full cost of their services. Government-subsidised aged care means the Australian Government pays part or all of a person's aged care costs, and the person contributes where they can afford to. The resident's contribution is the second funding stream. It arrives as several separate amounts.

What does a resident pay in an aged care home?

Under the 1 November 2025 fee arrangements, the aged care costs a resident can be asked to pay include four main charges, and clinical care is not one of them.

• Basic daily fee. The basic daily fee is paid by every aged care home resident, regardless of their means. The fee equals 85% of the basic age pension's single person rate, which puts the maximum at $66.80 a day, or $24,382 a year. That maximum is the rate current on My Aged Care at 23 August 2026. The Schedule of fees and charges for residential care lists it as the maximum daily rate from 1 July 2026. The government indexes the fee on 20 March and 20 September each year, so the amount changes twice a year even when a resident's circumstances hold steady.
• Hotelling contribution. Some residents on the 1 November 2025 fee arrangements pay a hotelling contribution, which is means tested and limited to the value of the hotelling supplement, $22.15 a day. That limit is the rate current on My Aged Care at 23 August 2026 and the maximum daily rate in the Schedule from 1 July 2026. The government indexes the hotelling supplement in March and September each year. Where the means assessment places a resident's income and assets below the thresholds for the hotelling contribution, the Australian Government continues to pay the full hotelling supplement and the resident pays nothing towards it.
• Non-clinical care contribution. The non-clinical care contribution covers personal care: bathing, help with mobility, and lifestyle activities. The contribution leaves out clinical care costs entirely and carries a daily cap of $107.32. That cap is current on My Aged Care at 23 August 2026 and appears as the daily cap in the Schedule from 1 July 2026. The contribution also stops for good once a resident's total contributions reach $137,917.01 (indexed), or once 4 years of cumulative contributions have passed, whichever comes first. That lifetime amount is current on My Aged Care at 23 August 2026 and sits in the Schedule from 1 July 2026. Both the daily and lifetime caps change with indexation in March and September. Fees paid under the Support at Home program count towards that lifetime cap.
• Accommodation payment. Accommodation is the price of the resident's room, agreed in writing with the provider before entry. Whether the resident or the government pays that price depends on the resident's means.

Which set of rules applies to a resident depends on when they entered care. People who moved permanently into an aged care home by 31 October 2025 keep their existing resident fees and accommodation costs while they remain in care. People entering on or after 1 November 2025 fall under one of two fee arrangements. The first is the 1 November 2025 arrangements set out above. The second is the 1 July 2014 arrangements, which apply where the person is covered by the 'no worse off principle' through a Home Care Package approval that predates 13 September 2024. Under the 1 July 2014 arrangements the resident pays a means tested care fee of between $0 and $372.03 a day, capped at $35,910.43 a year and $86,185.23 in a lifetime. The maximum daily rate is stated from 1 July 2026 in the Schedule of fees and charges for residential care, and indexation changes both caps each March and September.

How does the means assessment decide what you pay?

The aged care means assessment decides what a resident pays by measuring their income and their assets. The result sets the means-tested part of the resident's fees and the share of accommodation costs the government pays. Services Australia carries out the assessment for most people, and the Department of Veterans' Affairs carries it out for people receiving a DVA means tested payment. Completing one is not mandatory, but a person who chooses not to complete a means assessment may be charged the maximum contribution rate.

For couples, the assessment counts half of their combined income and half of their combined assets, whoever earns the income and whichever name an asset is held in. A partner who stays at home therefore affects the assessed position of the partner entering care.

A resident's means status is set at the date they enter an aged care home and holds while they remain in that home, however their financial circumstances change afterwards. Selling an asset, receiving an inheritance or spending down savings after entry does not move a resident from one means status to another in the same home.

Who pays for the room in an aged care home?

Whether a resident pays for their own room in an aged care home, or the Australian Government pays some or all of it, is decided by the resident's means assessment. The room price is not a national rate. Every person entering an aged care home must agree the price of their room with the provider, in writing, before care starts. The Elderberry directory lists 2,590 aged care homes run by 708 providers, covering 224,493 places (pulled August 2026), so the price agreed depends on the provider chosen.

Where a person's income is below $35,521.20 a year and their assets are below $64,500.00, the Australian Government pays their full accommodation costs. Those income and asset amounts are current on My Aged Care at 23 August 2026 and change with indexation. For residents assessed as low means, the government pays the aged care home an accommodation supplement based on the outcome of the means assessment. The supplement reaches up to $72.30 a day, at the rates that took effect on 1 July 2026.

Residents who do pay for their own room have three options. The first is a refundable accommodation deposit (RAD), a lump sum paid upfront. When the resident leaves, the aged care home refunds what remains of that deposit. Where a person moved in on or after 1 November 2025, a retention amount may apply to that refund. The second is a daily accommodation payment (DAP), a non-refundable daily amount paid in place of the lump sum. The third is a combination of both. Paying for nursing home care does not have to be settled in a single step. The daily amount applies until a refundable deposit is paid, and the deposit can be paid in full or in part at any time after the resident enters care.

Do you have to sell your home to pay for aged care?

No. Selling the family home is one of several ways to fund accommodation costs in an aged care home. A family may use the home's value to pay the refundable accommodation deposit, or rent the home out to help cover the daily accommodation payment.

Keeping the home limits how much of it counts against the resident. For a resident who keeps the family home, the means assessment for residential aged care includes a capped value of $214,884.00, the cap as at 20 March 2026. Where the net market value of the house sits below that cap, the lower value is the amount included. For a couple, the rules treat each partner as owning half of the home. Half of the capped value, or half of the net market value where that is lower, counts as an asset for the partner entering care.

The home is not counted as an asset at all while a protected person lives in it. A protected person includes a partner, a dependent child, and an eligible carer or close relative who receives an Australian Government income support payment and meets the residency conditions for that home.

The Age Pension assets test is a separate test from the residential aged care means assessment. Selling the family home brings its value into the Age Pension assets test.

What happens if you cannot afford aged care?

People who cannot afford their aged care costs for reasons beyond their control can ask to be assessed for financial hardship assistance. Under that assistance, the Australian Government pays some or all of a person's contributions, fees and accommodation. Each application is assessed individually.

Eligibility to apply carries conditions. An applicant must have had their means assessed and must hold assets worth no more than $46,835.10, once unrealisable assets are set aside. The applicant must also not have exceeded the gifting limits published by My Aged Care. That asset figure is pegged to the annual basic age pension with supplements, at 1.5 times that amount, and is current on My Aged Care as accessed on 23 August 2026. The current amount and the current gifting limits sit on that page.

Financial hardship assistance does not extend to every charge. A resident cannot receive it for higher everyday living fees, for extra or additional service fees, or while living in a multi-purpose service. For help at home under the Commonwealth Home Support Program, a person who cannot afford to contribute towards their care will not miss out on the help they need.

Who pays for aged care at home?

The Australian Government funds two main home-based aged care programs, the Commonwealth Home Support Program and Support at Home, and the client contributes to each under different rules. Support at Home replaced two earlier programs on 1 November 2025: the Short-Term Restorative Care Programme and the Home Care Packages Program.

Under the Commonwealth Home Support Program, a person speaks to their provider and agrees the fees before services start, with no income and assets assessment. The client contributes to the provider for as long as they receive services, if they can afford it, and there are no exit fees.

Under Support at Home, the contribution depends on the service category. Clinical supports, including nursing and physiotherapy, attract no contribution and are funded in full by the government. Independence services, covering personal care and transport, attract a moderate contribution. Everyday living services, which include domestic help and gardening, attract the highest contributions. A person's pension status then sets where they sit within those categories: full pensioners make the lowest contribution, and the highest falls to self-funded retirees without eligibility for a Commonwealth Seniors Health Card.

Two further rules shape what a Support at Home client pays. From 1 October 2026, personal care services under Support at Home will be funded in full by the Australian Government, making approved personal care available at no out-of-pocket cost. Support at Home exempts the principal home from its asset tests, so a homeowner receiving care at home is not assessed on the value of the house they live in.

Common questions

What is the average daily cost of aged care in Australia?

No single daily figure applies to every resident. What a nursing home costs one person depends on the fee arrangements set by their entry date, the means-tested amounts their assessment produces, and the room price they agreed with their provider. Two residents in the same aged care home can therefore pay different daily totals.

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

No single bank balance decides what a person pays for aged care, because the means assessment counts their income and their assets together. A person whose income sits below $35,521.20 a year, with assets under $64,500.00, has their full accommodation costs paid by the Australian Government. Those amounts are current on My Aged Care at 23 August 2026 and change with indexation. A person applying for financial hardship assistance must hold no more than $46,835.10 in assets, leaving unrealisable assets aside. That asset figure is current on My Aged Care as accessed on 23 August 2026. Above those levels, the means assessment sets the size of the resident's contribution and the government pays part or all of the remaining cost. For someone going into a nursing home, what counts is the income and assets held at the date of entry. That means status then holds while the resident stays in the same home.

How do you avoid aged care fees?

Every aged care home resident pays the basic daily fee, regardless of their means, so no means assessment reduces that fee to zero. The means-tested amounts are the part that can fall to zero, and the means assessment is what takes them there. A resident assessed with income and assets below the thresholds for the hotelling contribution pays nothing towards it, because the Australian Government keeps paying the full hotelling supplement. Where a resident's assessed income and assets fall below the accommodation thresholds, the Australian Government meets the full accommodation cost. The non-clinical care contribution stops permanently once a resident's total contributions reach its lifetime cap. Declining the means assessment works in the opposite direction, because a person who does not complete one may be charged at the maximum contribution rate. Financial hardship assistance can cover fees the means assessment does not reduce. Where a person is approved for that assistance, the Australian Government pays some or all of their contributions, fees and accommodation. Moving assets out of reach carries a cost of its own, since a person who has exceeded the gifting limits is not eligible to apply for financial hardship assistance.

What is the difference between aged care and residential aged care?

Aged care is the family of government-funded programs for older people. Aged care covers help at home through the Commonwealth Home Support Program and Support at Home, and it covers aged care homes for people who need somewhere to live with care. Residential aged care is another name for aged care homes specifically. An aged care home suits an older person who is no longer able to live independently and needs continuing help with everyday tasks or health care. Residential aged care therefore names one program inside aged care, funded by the same mix of government subsidies and resident contributions.

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