Residential Care — moving into an aged care home, costs, and what to expect

Residential aged care (an "aged care home" or "nursing home") provides accommodation, daily living support and personal and nursing care for people who can no longer manage at home. The fees changed under the Aged Care Act 2024 for anyone entering from 1 November 2025, so this guide reflects the current rules. The cost can look daunting at first, but there are caps, means testing and government support that bring it within reach for most people.

How to move into an aged care home

1. Get assessed. You need a comprehensive assessment through My Aged Care to be approved for residential care. Call 1800 200 422 to start. (See "Your aged care assessment: what will happen.")
2. Get a means assessment. Have Services Australia assess your income and assets. This decides how much you'll pay and whether the government helps with your costs. Do this before you move in, because without it you can be charged the full fees with no government help.
3. Find a home. Use the Find a provider tool on the My Aged Care website, tour a few, and compare care, feel, location, costs and availability.
4. Sort the costs and move in. Agree the fees and accommodation payment with the home, sign your agreement, and settle in.

What it costs

There are up to five possible costs. Some everyone pays, some depend on your means, and one is optional. The government fully funds your clinical and nursing care, so that isn't a separate fee.

These amounts are indexed (increased) on 20 March and 20 September each year, so treat them as a guide.

Paying for your room: RAD, DAP, or a mix

If your means assessment says you contribute to accommodation, you choose how to pay:

• A lump sum (RAD, Refundable Accommodation Deposit). A one-off refundable amount, a bit like a bond. The average is around $470,000, though it varies a lot by home and location.
• A daily payment (DAP, Daily Accommodation Payment). Instead of the lump sum, you pay a daily amount, a bit like rent. It's worked out from the room price using a government interest rate (7.96% as at April 2026). For example, a room priced at a $500,000 RAD works out to roughly $109 a day.
• A combination of both. Part lump sum, part daily payment.

One important change: when you pay a lump sum, the home now keeps a small amount each year (a retention of 2% a year, for up to five years). So you won't get the full lump sum back, and your refund is the amount paid minus those retentions.

What if I can't afford it?

This is where the safety nets matter:

• Low income and assets? If your means are below the set thresholds, the government pays your full accommodation costs, so you pay no RAD or DAP, and you'll generally only pay the basic daily fee.
• The care contribution is capped. The non-clinical care contribution has a daily cap and a lifetime cap. There's also an overall lifetime limit (around $135,000) on what you can be asked to contribute toward your care across home care and residential care combined. Once you reach it, you contribute no more.
• The basic daily fee is capped at 85% of the single basic age pension, so it rises only as the pension does.

What about the family home?

The family home is treated specially in the means assessment. Its value is capped (so only part of it counts), and it may be excluded altogether if a protected person, such as a spouse, still lives there. Because this is complex and the decisions are big, it's worth getting advice before selling or renting it out.

Please get a fee estimate, and advice

Aged care accommodation can involve very large sums, so don't go in blind:

• Use the residential care fee estimator on the My Aged Care website.
• Ask each home for a written fee estimate before you commit.
• Consider a financial adviser who specialises in aged care, especially around the RAD-versus-DAP decision and the family home.

This guide is general information, not financial advice, and your situation is unique.

Your rights don't change

Moving into a home doesn't mean giving up your independence or your say. The same Statement of Rights and quality standards apply, and you can raise concerns or make a complaint at any time. (See "Choice, dignity, respect: your rights in aged care")

Already in a home before 1 November 2025?

If you moved in permanently on or before 31 October 2025, your existing fee and accommodation arrangements continue, so the newer fees like the hotelling contribution don't apply to you.

Quick contacts

My Aged CareResidential Care 

• You need a comprehensive assessment to be approved, and a means assessment to work out your fees.
• Everyone pays the basic daily fee; other fees depend on your income and assets.
• Your room is paid by a lump sum, a daily payment, or both, and the home now keeps a small yearly retention.
• If your means are low, the government covers your accommodation, and caps protect everyone.
• Get a fee estimate and advice before you commit, especially about the family home.

This guide is general information, not personal or financial advice. Fees are indexed twice a year and rules can change, so confirm current figures on the My Aged Care website or by calling 1800 200 422.