Australian Aged Care Fees Explained
Residential aged care in Australia has three main cost components. They stack on top of each other, and the means-tested fee is the only one that varies with your wealth.
1. Basic daily fee
85% of the single basic age pension. Indexed in March and September. Around $63.50/day in early 2026 (~$23,200/yr). Everyone pays this regardless of income or assets.
2. Means-tested care fee
A daily contribution toward care, calculated from your income and assets by Centrelink/DVA. 50% of income above ~$33,309/yr plus 17.5% of assets above $206,663. Capped at $34,311.45/yr and $82,347.55 lifetime. People with low income and assets pay nothing here.
3. Accommodation: RAD vs DAP
RAD (Refundable Accommodation Deposit): a lump sum, refundable when you leave. Often $400,000–$700,000 depending on the room and provider. DAP (Daily Accommodation Payment): the daily equivalent, calculated as RAD × MPIR ÷ 365. The Maximum Permissible Interest Rate (MPIR) is set quarterly — around 8.3% in early 2026. You can pay all-RAD, all-DAP, or any combination.
Example: $500,000 RAD ≈ $114/day DAP at 8.3% MPIR. Over 5 years that's about $208,000 in DAPs — vs the $500,000 sitting refundable. The right choice depends on whether you'd otherwise sell the family home, your pension entitlement (RAD is exempt from pension assets test), and your estate plan.
What's not in this calculator
Optional extras (premium services like wine with meals, larger room — $0 to $100/day on top), respite or short-stay care (different fee structure), home care packages (different model entirely), and the new contributions under the 1 July 2025 Aged Care Act for residents entering after that date. For a binding fee schedule, get one from each provider you're considering and the Centrelink Combined Assets and Income Assessment.
Get qualified advice. Aged care decisions interact with the age pension, capital gains tax on the family home, granny-flat arrangements, and estate planning. The Department of Health's My Aged Care service has a fee estimator, and an aged care financial planner typically pays for themselves on a decision this size.