Understanding residential aged care costs

This page describes the different costs associated with residential aged care. 

Nominating a representative

You may choose to authorise someone to be your nominated representative when dealing with us. A nominated representative can be a partner, adult relative, trustee, agent, legal representative or organisation.

You can set up a nominated representative using MyService or by complete form Appointing a third party to represent a DVA client.

For more information visit the nominated representative webpage.

Please note that this form only authorises representation with DVA. Other government departments or services may require you to create other arrangements.

Information on representation arrangements for other departments can be found on the Help accessing aged care services page.

What are residential aged care fees?

The Australian Government subsidises residential aged care to provide affordable, accessible care for older people.

Before you enter permanent residential care, you should have your means assessed to see if you’re eligible for Australian Government assistance with fees and accommodation costs.

The fees you pay will depend on the outcome of your means assessment and what you agree on with your aged care provider.

All your fees must be clearly written in your resident or service agreement, accommodation agreement and the optional higher everyday living fee agreement.

DVA has special financial arrangements for former prisoners of war and recipients of the Victoria Cross, although there may still be some fees that is their responsibility to pay.

For more information visit the support for former prisoners of war page.

The new Aged Care Act

The way people contribute to the cost of their aged care changed on 1 November 2025 when the new Aged Care Act came into effect.

This change impacts everyone who accesses aged care services. My Aged Care

To find out more about these changes, go to What the new Aged Care Act means for you | Australian Government Department of Health, Disability and Ageing, or call My Aged Care on 1800 200 422.

Under the new Aged Care Act, you may need to pay some or all of these fees:

• basic daily fee
• hotelling contribution
• non-clinical care contribution
• accommodation costs
• higher everyday living fee.

The ‘no worse off’ principle

There are a number of protections in place for people who were already receiving aged care before 1 November 2025. 

How these protections apply to you depends on when you started or were approved for aged care services, and the type of services you are receiving.

• If you were in permanent residential care on or before 31 October 2025, your fee arrangements would have stayed the same from 1 November 2025, unless you chose to opt-in to the new arrangements.
• If you were approved for the Home Care Packages Program on or before 12 September 2024 and then enter residential care, you will continue paying fees under the existing fee arrangements. This applies even if you entered residential care after 1 November 2025. However, the new accommodation payment arrangements apply to anyone who entered residential care post 1 November 2025.

Basic daily fee

All residents pay this fee for daily living services, including meals, cleaning, laundry and utilities.

The maximum fee is set at 85% of the single basic age pension. This fee increases in March and September each year in line with the age pension.

Hotelling contribution

This fee is part of the 1 November 2025 fee changes.

People who can afford to will contribute more towards their daily living costs through a hotelling contribution. This fee covers daily living costs such as meals, cleaning and laundry.

Services Australia will tell you if you need to pay a hotelling contribution and if so, how much you need to pay. This is based on your means assessment.

The maximum amount changes with indexation in March and September.

Non-clinical care contribution

This fee is part of the 1 November 2025 fee changes.

People who need to pay the maximum hotelling contribution may also need to pay a non-clinical care contribution. This fee contributes to personal care costs such as bathing and mobility assistance.

Services Australia will tell you if you need to pay a non-clinical care contribution and if so, how much you need to pay. This is based on your means assessment.

The maximum amount changes with indexation in March and September. Daily and lifetime caps apply.

Means tested care fee

This fee is part of the 1 July 2014 fee changes and will continue to be assessed for those that entered on or before 31 October 2025.

People who can afford to contribute towards their cost of care will do so through a means tested care fee. This fee is based on your means assessment so it’s different for everyone.

Services Australia will tell you if you need to pay a means tested care fee and if so, how much you need to pay.

The maximum amount changes with indexation in March and September. Annual and lifetime caps apply.

Estimate your fees

Visit My Aged Care for current fee rates. You can also get an estimate of your aged care fees using the aged care home fee estimator.

Accommodation costs

Agreeing on a room price

You must agree on a room price with your provider and enter into an accommodation agreement before moving into an aged care home. How much you pay will also depend on your means assessment.

Aged care homes must publish their maximum room prices in the Find a provider tool. You can negotiate a lower price.

If you are eligible for assistance, the government will pay some or all of your accommodation costs to your provider. If not, you will need to pay the price that you agreed with your provider.

Payment options

You can choose to pay your accommodation costs as:

• a lump sum refundable deposit that is refunded when you leave care, less any retention amounts and any fees that you agree to draw down from it, or
• a daily payment that is not refunded when you leave care, or
• any combination of lump sum and daily payment.

A lump sum payment for accommodation can be either:

• a refundable accommodation deposit (RAD), if you need to pay the agreed room price
• a refundable accommodation contribution (RAC), if you are eligible for assistance.

If you first entered permanent residential aged care on or after 1 November 2025, then the following arrangement also applies:

• RAD/RAC retention – if you pay a lump sum, your provider deducts and keeps a small amount (calculated at 2% per annum) of your lump sum balance. This amount is not refunded when you leave care. After 5 years in care, no further retention amounts will be deducted.

A daily payment for accommodation can be either:

• a daily accommodation payment (DAP), if you need to pay the agreed room price
• a daily accommodation contribution (DAC), if you are eligible for assistance.

If you first entered permanent residential aged care on or after 1 November 2025, then the following arrangement also applies:

• DAP indexing – if you pay by DAP, this amount will increase due to indexation in March and September each year. Indexation does not apply to daily accommodation contributions (DAC) paid by residents eligible for government assistance with their accommodation costs.

Until you pay a lump sum, you will pay the daily payment. You can pay a lump sum at any time after you enter care.

A lump sum payment is considered an asset for aged care purposes. This means it is counted in your means assessment and may affect your hotelling contribution, non-clinical care contribution and means tested care fees.

If you choose a combination payment, you can choose to draw your daily payment from your paid lump sum. Over time, this will increase your daily payment unless you top up the lump sum.

Your provider may also agree to draw other fees from the lump sum, like your basic daily fee.

Higher everyday living fee

The higher everyday living fee (HELF) is an optional fee for people who choose to receive higher quality everyday living services. It can be charged for services that are of a higher quality or in addition to those your aged care home must provide.

The specific services, and the fees for each, are agreed between you and your provider after you enter care. You can’t be asked to pay for a service you are unable to use.

After agreeing in writing, you have 28 days to change your mind and cancel your higher everyday living agreement. The agreement is reviewed by you and your provider at least once a year to ensure you still want and can still make use of the services.

Prior to 1 November 2025, you may have entered into an agreement to pay either Additional Service Fees or Extra Service Fees. No new additional or extra service fee arrangements can be entered from 1 November 2025.

Existing Extra Service Fee and Additional Service Fee arrangements can continue until 31 October 2026 for people who agreed to these fees prior to 1 November 2025.

Read more about aged care home costs and fees and accommodation costs on the My Aged Care website.

Help accessing aged care services

It’s no secret aged care can be confusing and it’s often difficult know where to start. You don’t have to do it alone.

There are many services available through the government as well as independent services that can support you on your aged care journey.

The Help Accessing Aged Care Services page provides information on available support. There are also further support services to help you understand and navigate aged care.

You can explore these options by visiting the Getting support in aged care webpage on the My Aged Care website.

Other pages we think may interest you

• Aged care resources
• Preparing for your future residential care need
• Residential aged care means testing
• Residential aged care and your income support payment
• Supporting you in aged care
• Accessing DVA supports and services in aged care
• Accessing mental health support and staying connected
• Carer support
• Raising an aged care concern
• The new Aged Care Act