Understanding Age Care Fees & Costs
When entering a permanent residential aged care facility, residents face several types of fees that contribute to their overall cost of care. The basic daily fee helps to cover the costs of daily living like meals, cleaning, laundry, heating and cooling. At the same time, additional charges may apply based on individual circumstances and chosen accommodation.
From 1 October 2025, the non-clinical care contribution (NCCC) will replace the means-tested care fee as a contribution towards non-clinical care costs, representing a significant change in how aged care costs are structured.
Types of Fees and Potential Costs
| Fee Type | Description | Current Rate (2025) | Who Pays |
|---|---|---|---|
| Basic Daily Fee | Standard resident contribution covering daily living costs like meals, cleaning, laundry, heating and cooling | $63.82 per day | All residents |
| Non-Clinical Care Contribution (NCCC) | Replaces the means-tested care fee from 1 October 2025, with a contribution towards non-clinical care costs | Up to $101.61 per day (capped) | Based on the assets and income assessment |
| Accommodation Payment | Room and board costs | Varies significantly by facility and location | If income above $84,812.52 or assets above $206,663.20, pay full accommodation cost |
| Refundable Accommodation Deposit (RAD) | Lump sum payment for accommodation | The average RAD in Australia is about $470,000, but prices can vary greatly | Higher asset residents (negotiable) |
| Daily Accommodation Payment (DAP) | Daily rental equivalent of RAD | Based on 7.78% MPIR - e.g., $500,000 RAD = $106.58 per day | Alternative to RAD |
| Extra Services Fee | Premium accommodation, meals, and additional services | Varies by facility | Optional - depends on chosen facility and services |
Important Cost Considerations
- From 1 October 2025, the maximum room price you can be charged without approval increased to $758,627.
- From 1 October 2025, Aged care facilities will retain 2% of the RAD per year, for up to five years, from the time the deposit is paid.
- If you're worried that you may not be able to afford your care costs, you can ask to be considered for financial hardship assistance.
Professional financial advice
We can work with you to explain the specific costs based on your individual circumstances, assets, income, and the type of facility you are considering. While aged care facilities can provide initial guidance and day-one fee estimations based on your current financial situation, they are limited in scope and cannot offer comprehensive long-term financial advice or multi-year strategies, particularly for complex scenarios such as when one partner passes away or when your financial circumstances change significantly over time.
A qualified financial adviser can significantly improve your financial outcomes in aged care through three key strategies:
Asset Structuring and Protection: An adviser can help restructure your assets to reduce your assessed value for aged care means testing, potentially lowering your accommodation payments and care fees while protecting wealth for your family's inheritance.
Cash Flow Optimisation: By analysing your income streams, investments, and pension entitlements, an adviser can develop strategies to maximise your cash flow, determine the most cost-effective payment methods (such as choosing between RAD and DAP), and ensure you maintain financial security throughout your care journey.
Tax Planning and Centrelink Maximisation: Professional guidance can help optimise your tax position, maximise Age Pension entitlements, and navigate the complex interactions between aged care fees, taxation, and social security benefits to minimise your overall financial burden.
For those seeking initial guidance, you can also receive free financial information through Services Australia or contact the Financial Information Service for basic aged care financial planning support.
To speak to our team about your Age Care needs, click here