Types of care

What is the difference between aged care and a nursing home?

Updated 24 August 2026

Government-funded aged care in Australia is delivered in three settings and service categories: residential aged care in aged care homes, in-home care, and flexible care. An aged care home is one setting inside that set, and it takes in an older person who is no longer able to live independently at home and who needs continuing help with daily tasks or with health care. An older person who can still live at home with some help is served by in-home care instead. The Australian Government uses two names for that one service, aged care home and residential aged care, and both names cover the same accommodation and care arrangement. The Elderberry directory lists 2,590 aged care homes across Australia at the August 2026 pull, each of them a place where residential aged care is delivered.

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What are the three types of aged care?

The three government-funded aged care categories are residential aged care, in-home care and flexible care. Where the care is delivered separates residential aged care from in-home care, and the support it covers separates flexible care from both.

• Residential aged care. Residential aged care is the care delivered inside an aged care home, so the older person's address changes when it starts. The aged care home supplies both the accommodation and the care under one arrangement.
• In-home care. In-home care keeps the older person at home and brings the help to them, including short-term support. It runs through two programs. The Commonwealth Home Support Program is entry-level help, for a person who mostly manages alone but needs help with a few everyday tasks such as cleaning, meals or transport. The Support at Home program covers ongoing needs: regular or more complex help, which can include personal care, nursing support, and help with daily activities.
• Flexible care. Flexible care covers support that is not offered in residential aged care or in-home care.

Terms such as retirement village and assisted living do not name any of those three government-funded categories.

What does an aged care home provide?

An aged care home supplies accommodation together with everyday living services such as catering, personal care, general health care, social activities, and access to nursing 24 hours a day.

A stay in an aged care home can be short or permanent. Short stays carry their own funding rule. Respite care supports an older person and their carer for short periods, and it can be provided in the person's home, the community or an aged care home. Residential respite is subsidised for up to 63 days of care in a financial year, including planned and emergency respite. An assessor can approve an extension of 21 days at a time. Those respite figures are published by My Aged Care and were accessed on 23 August 2026.

At the August 2026 pull, the Elderberry directory counted 224,493 places across the Australian aged care homes it lists.

Who can move into an aged care home?

Eligibility for a government-funded aged care home rests on assessed care needs plus age. The age threshold is 65, and it drops to 50 for Aboriginal and Torres Strait Islander people, and for anyone who is homeless or at risk of homelessness. The government subsidises these services on the basis of age, assessed need and personal situation.

Your financial position has no bearing on whether you are eligible for a government-funded aged care home.

The care assessment starts with an application. After you submit an application for an assessment, an assessment organisation calls you within 2 to 6 weeks. That call confirms your needs and arranges the face-to-face assessment. My Aged Care publishes the 2 to 6 week timeframe, accessed on 23 August 2026.

What does an aged care home cost?

Every resident of an aged care home pays the basic daily fee, whatever their means, and that holds at each of the 708 providers listed in the Elderberry directory at the August 2026 pull. The maximum basic daily fee is $66.80 a day, or $24,382 a year, based on current rates published by My Aged Care and accessed on 23 August 2026. The fee is pegged to the pension at 85% of the basic age pension's single person rate, and it is indexed by the government on 20 March and 20 September each year.

Beyond the basic daily fee, a person who moves into an aged care home on or after 1 November 2025 falls under one of two fee arrangements. People who were already receiving a Home Care Package and are protected by the "no worse off principle" stay on the 1 July 2014 fee arrangements.

• The 1 November 2025 fee arrangements. Clinical care is fully funded by the government in every aged care home under this arrangement. A means tested hotelling contribution applies, capped at the hotelling supplement rate of $22.15 a day. That supplement is itself means tested, and indexation moves it in March and September each year. A non-clinical care contribution applies as well, capped at $107.32 a day. The contribution stops at a lifetime cap of $137,917.01, or at 4 years of cumulative contributions, whichever point comes first. The daily cap and the lifetime cap are both indexed in March and September.
• The 1 July 2014 fee arrangements. A means tested care fee applies, between $0 and $372.03 a day. The fee is capped at $35,910.43 a year and at $86,185.23 across a lifetime. Those caps change with indexation in March and September.

Accommodation is charged on top of care. There are three ways to pay for it: a refundable accommodation deposit (RAD), a daily accommodation payment (DAP), or a combination of the two. The RAD is a lump sum paid upfront. The DAP is a non-refundable daily amount. Where income sits below $35,521.20 and assets sit below $64,500.00, the Australian Government covers your accommodation costs in full, and both thresholds shift with indexation.

Every fee, contribution and threshold amount in this section was published by My Aged Care and accessed on 23 August 2026. Check the current amount on My Aged Care before building a budget around any of them.

Do I have to sell my house to go into aged care?

No. The accommodation payment for an aged care home can be met without selling the family home. You may sell the family home or use its value to pay the RAD. You may also rent the home out to help cover the DAP. The daily payment runs until a refundable deposit is paid, and the RAD itself can be paid in full or in part at any point after entry into care. The decision to sell therefore does not have to be made before a resident moves in.

Keeping the home has a defined effect on the aged care means assessment. Keeping the family home puts a capped $214,884.00 into your means assessment, the figure as at 20 March 2026, or the home's net market value where that is lower. For couples, the cap is applied to each half. The home is not counted as an asset at all if 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 with you in the home for at least 2 years. Those rules are published by My Aged Care and were accessed on 23 August 2026.

The Age Pension treats the same house differently, so the two tests need to be read separately. A sold home puts its sale value inside the Age Pension assets test. A home you keep and do not rent out stays exempt from the Age Pension assets test for 2 years after the move into aged care, according to Moneysmart, last updated 18 August 2026.

Which setting the older person enters decides how the home is treated. Under the Support at Home program, which delivers in-home care, the principal home is exempt from the asset tests. In residential aged care, the capped home value is counted in the means assessment.

Common questions

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

Savings change only the amount you may have to pay for a government-funded aged care home, and they enter that calculation through the means assessment. Services Australia carries out the means assessment. The Department of Veterans' Affairs handles it for a person who receives a means tested DVA payment. For a couple, the assessment counts half of the combined income and half of the combined assets, whoever earned the income and whichever name an asset sits in. A means assessment is not mandatory, though anyone who skips it may be charged the maximum contribution rate.

What happens if you cannot afford aged care?

A resident who cannot meet aged care home costs, for reasons outside their control, may apply for financial hardship assistance. Where hardship assistance is granted, the Australian Government pays part or all of the aged care costs. Those hardship rules are published by My Aged Care and were accessed on 23 August 2026.

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

The Age Pension assets test sets a limit for each situation: $333,000 for a single homeowner, $600,000 for a single non-homeowner, $499,000 combined for a homeowner couple and $766,000 combined for a non-homeowner couple. Assets above the limit for your situation reduce the pension. From 1 July 2026, a part pension is cancelled once assets pass the cut off point for the situation. That cut off point is $733,500 for a single homeowner and $1,000,500 for a single non-homeowner. Services Australia last updated that page on 1 July 2026. The Department of Social Services reviews both the limits and the cut off points three times a year, in March, July and September.

How much is the full Age Pension in 2026?

The maximum total Age Pension is $1,200.90 a fortnight for a single person and $1,810.40 a fortnight for a couple combined, before tax. Those totals are the maximum basic rate plus the Pension Supplement and the Energy Supplement, as published by Services Australia on a page last updated 19 June 2026. The Department of Social Services adjusts the rates every 20 March and 20 September.

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