Stepping into aged care brings many changes, and one of the biggest is understanding the costs. In Australia, government-subsidised aged care is offered under a clear fee structure set by the Commonwealth.
But knowing what each fee covers, how they’re calculated, and how to plan smartly can feel overwhelming.
This guide is here to unpack everything: daily fees, means-tested fees, accommodation payments, and practical ways to manage affordability without compromising care or comfort.
The government subsidises most residential aged care through direct payments to providers on behalf of eligible residents. The payment system is known as the Aged Care Funding Instrument (ACFI). These subsidies cover care staff and nursing services.
Residents contribute through a combination of basic daily fees, means-tested fees, and accommodation payments (if applicable).
Importantly, only care-related costs are subsidised. Extra services—such as a private room, extra therapies, haircuts, or premium Wi‑Fi might attract additional fees charged by the aged care home.
Every resident in a government–funded residential aged care facility pays the BDF. This fee covers daily living care, nursing, meals, cleaning, utilities, and support services. In July 2025, the BDF is $63.82 per day (indexed twice a year - 20 March and 20 September).
The good news? The BDF is capped at 85% of the pension rate for full pensioners, which means most people pay less than the full amount. Centrelink automatically calculates any concession or reduction based on your eligibility.
This fee comes into play if your income or assets exceed the thresholds set by Centrelink. It's calculated annually or when your income changes significantly.
A simplified breakdown:
Your care provider will let you know your MTCF monthly or quarterly; typically it’s collected by deduction from the BDF payment or billed separately.
Accommodation costs in aged care depend on your room type. Some facilities charge high-end-style fees, while others provide modest shared rooms without extra cost.
You decide which suits you—either a large upfront RAD or spread payments via a daily accommodation payment. A hybrid option lets you pay part RAD and part DAP.
Facilities must declare room prices and show what features or amenities justify the cost. For example, a private ensuite in a garden wing will cost more than a standard shared room.
| Fee Type | Who Pays? | Amount | How It’s Paid |
|---|---|---|---|
| Daily Care Fee | All residents | $63.82 pd | Mthly Direct Debit |
| Means-Tested Care Fee | If income/assets exceed thresholds | Capped at ~$36,000/year | Mthly Direct Debit |
| Accommodation Payment | Based on room selection | RAD up to ~$750,000; DAP ~$150/day | Upfront RAD or Mthly DAP |
| Additional Service Fees | Optional extras | Varies by service | Monthly billing |
When deciding RAD vs DAP, consider:
Many families use advisers or accountants to run comparisons—based on life expectancy, investment returns, estate goals and comfort with daily charges.
If you leave care due to recovery or move for other reasons, refundable RAD amounts are returned minus any legal deductions for outstanding accommodation charges or utility adjustments. If the resident passes away, payment is made to their estate or nominated beneficiaries, via the probate process.
While Commonwealth systems aim to be transparent, some costs may surprise:
Always request a written schedule of fees and compare multiple providers before deciding.
Moving to a new room, different facility or upgrading to private amenities can change your fees significantly. Ask:
Often families worry about “what’s happening to our loved one’s money” especially if they’re paying large RADs. Transparency is key:
You can request Centrelink reviews if your income or assets change significantly. You could also appeal provider decisions such as in cases of overcharging.
No, not necessarily. Many families use the Pension Loans Scheme or sell later to pay RAD. Part-payment options allow flexibility.
Yes - you can move in and pay DAP temporarily while you wait or save to make a RAD payment.
Yes - if your income or asset levels drop below thresholds, or if you transfer into full pension status.
By law, refunds must be made within 14 days, though many providers meet that requirement faster.
Meet Marg and Bill, aged-care residents who navigated these options independently:
These decisions gave them peace of mind both in care support and in financial planning.
Commonwealth aged care fees are designed to be transparent and fair—but sorting through care fees, means tests, accommodation charges and calculation methods takes time and support.
By understanding your fee obligations, using the support options available, and seeking advice when needed, you can make confident decisions that balance quality care, independence and sensible financial planning.
At Silver Lifestyle, we aim to offer seniors and families clarity, tools and reassurance—so the move into aged care is based on choice, not uncertainty.