Aged Care Costs in Australia

Various figures are quoted throughout this article. For the most up-to-date schedule of fees and charges, please visit the link to Services Australia at the bottom of this page.

One of the most common questions we are asked when considering residential nursing homes is around the aged care home costs and fees. Understanding fees and charges and the Income and Asset assessment process can feel a little overwhelming.

All new residents, prior to entering residential aged care, are assessed by The Commonwealth Government via Services Australia. This assessment will influence the residential aged care fees required for;

  • Basic Daily Nursing Home Cost – Covers day-to-day living expenses such as food, cleaning, utilities and laundry.
  • Means Tested Care Fee – This fee contributes to your cost of care.
  • Accommodation fees – Aged care nursing home costs will vary depending on the home and the type of room you choose.
  • Additional services fees – fees for services outside the scope of required services for residential aged care.

The Cost of Aged Care as a Basic Daily Fee  

All residents need to pay the basic daily fee. This fee is a contribution towards daily living expenses such as meals, cleaning, management, and laundry. The basic daily fee is 85% of the single person rate of the basic age pension. The government sets the price on 20 March and 20 September each year, changing in line with increases to the age pension. 

The current Basic Daily Cost of aged care is $56.87.

Means Tested Care Fee

The Means Tested Care Fee ensures that residents who have additional income and assets contribute to their medical costs including nursing and personal care. This aged care fee is not retained by the residence.

Residents will receive information regarding their Means Tested Care Fee obligations 14 days after the completion and lodgment of the “Permanent Residential Aged Care Request for a Combined Asset and Income Assessment”. If this assessment is not completed, then a higher Means Tested Care Fee may be levied until such time as the information is provided.

The Maximum Means Tested Care Fee that a resident can be asked to pay per year is $28,338.71 with a lifetime limit of $68,012.98.

Accommodation Payment

The Accommodation Payment is used to maintain and improve the accommodation and resident services. The accommodation payment is charged by the home depending on the value of the room. Different aged care homes have different costs for accommodation, and rooms within the same home can also be priced differently. 

The Commonwealth government may pay some or all of your accommodation payments based on your income and assets.

Paying the Full Accommodation Costs

If you need to pay the full cost of your accommodation, you can choose to pay with a lump sum, daily payment, or a combination of both. The following options may apply to you:

  • A lump-sum payment also called a Refundable Accommodation Deposit (RAD) is a lump sum provided to the home equal to the value of the room. This deposit is fully refundable when you (or your loved one) leaves our home.
  • The Daily Accommodation Payment (DAP). The DAP is calculated by applying an interest rate (referred to as the Maximum Permissible Interest Rate, or MPIR) to the agreed room price, and converting it to a daily amount. The Current MPIR is 6.31%.
  • A combination of both. Some of the room costs may be paid by a Refundable Accommodation Deposit, with the balance converted to a daily payment amount.


For a room price of $500,000, you could choose to pay:

  • A $500,000 fully-refundable deposit
  • $500,000 x 6.31% = $56.87 daily payment
  • A combination of a deposit and daily payment

Paying Partial Accommodation Costs

Your income and assets assessment may entitle you to a government aged care fees subsidy for some or all of the accommodation costs. If the full cost of accommodation is not covered, you will be asked to pay a contribution towards these costs. This contribution is referred to as a daily accommodation contribution (DAC). The DAC can also be paid as a lump sum referred to as a Refundable Accommodation Contribution (RAC).

Additional Services

Some homes offer services that supplement the normal aged care requirements. These services could be entertainment options such as subscription television, internet, additional food or beverages, or outings. The services are generally charged either per use or bundled together as an added daily fee. Not all homes offer additional services.

For further information regarding the Schedule of Fees & Charges please contact our Admissions team by either:

Cost of Aged Care in Sydney

Heritage Care has six aged care homes in Sydney.

Heritage Pennant Hills

Heritage Kingswood

Heritage Illawong

Heritage Botany

Heritage Queanbeyan

Heritage the Manor

Cost of Aged Care in Melbourne

There are four Heritage Care nursing homes in Melbourne.

Heritage Gardens

Water Gardens 

Chomley House

Heritage Epping

For an up to date schedule for the cost of aged care homes, please visit the following link: Schedule of Fees and Charges for Residential and Home Care | Australian Government Department of Health.