When someone you love needs residential aged care, the costs can look like one confusing total. In reality, the amount is made up of separate fees for everyday living, care, accommodation and any optional extras.
The exact amount depends on the person’s entry date, income and assets, the home they choose, the agreed room price and any optional services. This guide explains the structure without pretending that one figure applies to every family.
Which fee arrangement applies?
There are currently two main residential aged care fee arrangements. Most people entering permanent care on or after 1 November 2025 are covered by the newer arrangements. People who entered earlier generally remain under the 1 July 2014 arrangements, and some people are protected by the no-worse-off rules.
The main fee types
Basic daily fee
Contributes to ordinary daily living services such as meals, cleaning, laundry and utilities.
Means-based contributions
Depending on the applicable arrangement, this may be a hotelling contribution, non-clinical care contribution or means tested care fee.
Accommodation costs
The cost of the room, paid as a refundable lump sum, daily payment or combination.
Higher everyday living fee
Additional or higher-standard everyday living services chosen under a separate agreement.
1. Basic daily fee
Every permanent resident pays the basic daily fee. The maximum is set at 85% of the single basic Age Pension rate and is indexed in March and September.
2. Means-based contributions
Services Australia uses the person’s income and assets to determine whether an additional contribution applies. Under the 1 November 2025 arrangements, this may include the hotelling contribution and non-clinical care contribution. Under the earlier arrangements, the care-related amount is generally the means tested care fee.
Not everyone pays these contributions. The fee advice letter confirms the assessed amounts.
3. Accommodation costs
Accommodation is separate from care. The resident and provider agree on a room price in writing. Depending on the means assessment, the resident may pay the full agreed price or receive government assistance and pay an accommodation contribution.
The accommodation amount can generally be paid as a refundable lump sum, non-refundable daily payments or a combination.
4. Optional higher everyday living services
These services must be explained in a separate agreement and cannot be required to secure a room. The resident should understand what is included, whether they can use it and how the agreement can be varied or cancelled.
How do you find the actual amount?
- Confirm which fee arrangement applies.
- Identify the home and proposed room price.
- Complete the residential aged care means assessment.
- Review the Services Australia fee advice letter.
- Check the accommodation agreement and any optional service agreement.
- Compare the total daily, monthly and accommodation cost at a stated date.
Why fees can change
Government rates and thresholds are indexed, provider prices can change, and a person’s assessed contributions can change after updates to their personal or financial circumstances. A useful fee calculation should therefore state the date, inputs and assumptions used.
Need help understanding your figures?
Aged Care Fee Experts provides plain-English fee calculations, accommodation comparisons and practical Services Australia support without recommending financial products or telling families what decision to make.
Book a Complimentary Initial ConsultationOfficial sources used
- My Aged Care – Aged care home costs and fees
- My Aged Care – Means assessments for residential aged care
- My Aged Care – Understanding accommodation costs
Government rates and thresholds change. The source pages should be checked again when a calculation is completed.
General information only: This guide does not provide financial, legal or tax advice. Outcomes depend on individual circumstances, provider agreements and the rules, rates and thresholds applying at the relevant time.