Costs explained
What a place in an aged care home costs
There are four parts to the bill, and a fifth that is optional. One is the same for everyone, two depend on your parent's income and assets, one depends on the room and how you pay for it, and the optional one is extras agreed after moving in.
- Everyone Basic daily fee $68.93 Same for everyone. Meals, cleaning, laundry.
- Depends on means Hotelling contribution up to $22.15 Up to this much, set by the income and assets test.
- Depends on means Non-clinical care up to $109.45 Up to this much, and stops at a lifetime cap.
- Depends on the room Daily payment for the room $64.12 Only on the part of the room price not paid as a lump sum.
The room price: $550,000
$275,000 lump sumRefundable when your parent leaves, less 2% a year for up to 5 years. Guaranteed by the government.
$275,000 not paid× 8.51% ÷ 365 = $64.12 a day, the room's daily payment above.
Work out the monthly bill
Pick a room or type its price, choose how much to pay up front, and add rough income and assets if you like. You get the monthly total, every line of it, and what happens to the lump sum over five years.
The parts of the bill, in plain English
1. Basic daily fee: $68.93 a day
Everyone pays it. It covers everyday living such as meals, cleaning and laundry, and is set by the government as a share of the single age pension.
2. Hotelling contribution: up to $22.15 a day
Means-tested. People with higher income or assets pay towards the cost of meals, cleaning, laundry and utilities, on top of the basic daily fee.
3. Non-clinical care contribution: up to $109.45 a day
Means-tested, for help such as showering and lifestyle activities. It stops for good once either of two things happens: your parent has been charged it on 1,460 days (four years, not necessarily in a row), or their total reaches the lifetime cap of $140,652.80. What they paid towards Support at Home services before moving in counts towards that cap (Aged Care Act 2024, section 279(5)). Nursing and clinical care itself is paid for by the government. Old and new rules side by side
4. The room: a lump sum, a daily payment, or both
The room price is a refundable accommodation deposit (RAD). Whatever is not paid as a lump sum is charged as a daily accommodation payment (DAP): the unpaid amount × 8.51% ÷ 365. Until a lump sum is paid, the daily payment applies.
For people who moved in from 1 November 2025, the home keeps 2% of the lump sum each year, for up to 5 years. The rest is refunded when your parent leaves, and the refund is guaranteed by the Australian Government. How the 2% is worked out
Lump sum or daily payment?
The same room costs the same either way: the daily payment is the interest the home charges on whatever is not paid as a lump sum. Paying more up front means a lower daily bill but less money in the bank, and from November 2025 the 2% a year retention applies to the lump sum. Many families pay part of each while a house is sold. The calculator shows any split, and the government's free Financial Information Service (Services Australia, 132 300) can talk it through.
5. Optional extras (higher everyday living fee)
A home may offer extras above the standard every resident gets, such as a wider menu, wine with dinner or Wi-Fi, for a daily fee. It can only be offered after your parent has moved in, it is never a condition of getting a place, it must be in writing item by item, and it can be changed or ended without a fee in the first 28 days. Few homes publish the price, so ask for it in writing. How HELF works
The government pays some or all of the room when your parent's means-tested amount (worked out by Services Australia from income and assets) is under $73.73 a day. As a rough guide for a single person: with income near the pension and assets under $66,500, it pays all of the room; it keeps paying part until assets reach about $219,858. Services Australia works out the exact figure, and the calculator shows it once you add income and assets.
Where these numbers come from
The government updates most of these rates on 20 March and 20 September, the interest rate each quarter, and the caps for people under the older rules on 1 July and 1 October. The figures here are from the department's schedule that started on 20 Sep 2026, and the interest rate set from 1 Oct 2026. The calculator uses the same table.
- Schedule of fees and charges for residential care from 20 September 2026, Department of Health, Disability and Ageing.
- The retention rule is set under the Aged Care Act 2024: RAD and RAC retention, Department of Health, Disability and Ageing.
Guides
- Higher everyday living fees (HELF), explained
- RAD retention: the 2% a year kept from a lump sum, explained
- RAD or DAP: lump sum or daily payment for an aged care room
- The aged care means test, explained
- When the government pays for the room
- Choosing an aged care home: questions to ask
- Aged care fees: the old and new rules side by side
For your parent's own figures, ask Services Australia for an income and assets assessment, or call My Aged Care on 1800 200 422.