Fees for permanent residential aged care

Current rates

Post 1 July 2014 fee arrangements

A resident entering your service for permanent care may pay up to 5 types of fees:

• a basic daily fee
• a means tested care fee
• accommodation costs
• an extra service fee
• additional service fees.

See the residential aged care fee scenarios for examples of how fees are worked out for people with different financial circumstances.

Read about fees for people who entered residential aged care before 1 July 2014.

Opting in to post 1 July 2014 fee arrangements

Residents who entered care before 1 July 2014 and are transferring into your care can either: 

• stay on their pre 1 July 2014 fee arrangements
• opt in to the post 1 July 2014 arrangements, as long as they do this before they enter your service.

Read about fees for people who entered residential aged care before 1 July 2014, including opting in to the post 1 July 2014 fee arrangements.

Explaining fees to your residents

You must ensure that residents in your aged care home understand the fees in their agreements and the amounts they are charged. 

You can provide a copy of the Understanding fees for aged care homes fact sheet to help explain fees to your residents.

Agreeing on and recording fees

Before a person enters your care you must: 

• discuss and agree on any fees 
• include the agreed fees in the resident agreement, accommodation agreement and extra services agreement (these can be one document)
• agree on a room price (whether they pay the agreed amount will depend on their means assessment). 

Advising fees

Submitting an Aged Care Entry Record will notify Services Australia a resident has entered your care. 

Services Australia will send you and the resident a letter advising the maximum fees you can ask them to pay. 

This letter will provide amounts only for fees set by the Australian Government or worked out in the means assessment. That is, the:

• basic daily fee
• means tested care fee
• accommodation contributions (for residents with low means status who do not pay the agreed room price). 

You must also advise your residents about your other fees as applicable, including:

• accommodation payments (for residents without low means status who pay the agreed room price)
• extra service fees 
• additional service fees. 

If additional or extra service fees apply, you must agree on these amounts with your residents.

Basic daily fee

You can ask every resident in your aged care home to pay the basic daily fee. This fee is called a ‘standard resident contribution’ in aged care legislation. The fee helps to cover the costs of daily living like meals, cleaning, laundry, heating and cooling.

The maximum fee is 85% of the single basic age pension. The fee amount changes with the pension rate every March and September.

The Department of Veterans' Affairs may pay the basic daily fee for former Prisoners of War (POWs) and Victoria Cross (VC) recipients. Find out more about payment of the basic daily fee to ex-POW and VC holders.

Means tested care fee

The means tested care fee is a contribution that some residents pay toward their cost of care. It is paid in addition to the basic daily fee. This fee is different for everyone. Services Australia will advise you and the resident of the amount payable in a fee advice letter.

Means tested care fees are calculated based on a person’s:

• means assessment (income and assets)
• cost of care (adjusted basic subsidy and primary supplements).

The Australian National Aged Care Classification (AN-ACC) funding model has not changed the means assessment process for residents. A resident’s means tested care fee is still limited by their cost of care. 

Services Australia regularly reviews residents’ means tested care fees. This ensures each resident is paying the right fee for their circumstances.

A resident’s means tested care fee may change when:

• their financial circumstances change
• the means testing thresholds are indexed
• there is a change to the cost of their care.

Services Australia will send you a letter if there is a change to the fee. You may owe the resident a refund as a result.

Interim fees

You may wish to start collecting fees while waiting for a resident’s means assessment. Interim fees are set by you, not by the government. 

You can use the My Aged Care fee estimator or the residential aged care fee scenarios to decide an appropriate interim means tested care fee for the resident. 

Once Services Australia completes the means assessment, you will need to adjust the resident’s fees to ensure they have paid the correct amount.

Read more about charging interim accommodation costs.

Annual and lifetime caps

Annual and lifetime caps limit how much a person can pay in means tested care fees. 

The caps are indexed in March and September each year. The cap amount that applies for a resident is the amount current at the time the resident reaches the cap.

Once a resident reaches the annual cap, their means tested care fee is reduced to zero. They start paying the fee again on the next anniversary of the date they first entered aged care. Services Australia will let you know when the resident reaches their annual cap, and when their means tested care fee can start again.

Services Australia will let you know when a resident reaches their lifetime cap. Once a resident reaches the lifetime cap, the government pays the full cost of their care. The resident will pay no more means tested care fees.

A resident may have paid an income tested care fee for Home Care Package before they moved into an aged care home. The amount they have paid in income tested care fees will count toward their annual and lifetime caps.

These caps only apply to means tested care fees. Residents still need to pay the basic daily fee and any accommodation costs.

Accommodation costs

Agreeing a room price

All residents must agree to an accommodation price before they enter care. The agreed price cannot be more than your published maximum accommodation payment amount for that room, but you can agree a lower amount. This includes prices published on My Aged Care, your own website, and in any printed materials.

From 1 January 2025, the maximum room price you can charge without approval will increase from $550,000 to $750,000. This amount will then be indexed yearly from 1 July 2025, in line with changes to the Consumer Price Index.

You cannot increase the price for residents already in your care.

Approvals for higher room prices

To publish or charge a refundable deposit over $750,000 (or the equivalent daily payment), you must have current approval from the Independent Health and Aged Care Pricing Authority (IHACPA). To publish a room price over the maximum, you must input your approval details on the My Aged Care Service and Support Portal.

Approvals from IHACPA last for up to 4 years. You must renew your approval before it expires if you wish to keep charging a higher amount.

Means assessment determines type of accommodation costs

Whether you can ask the resident to pay the agreed amount will depend on their means assessment.

Services Australia will let you and the resident know if:

• the resident must pay the agreed accommodation price 
• the government will pay some or all of the resident’s accommodation costs through the accommodation supplement.

If the resident is eligible for government support with some of their accommodation costs, they will need to pay an accommodation contribution determined by Services Australia. They can choose to pay this as either:

• a refundable accommodation contribution (RAC)
• a daily accommodation contribution (DAC)
• a combination of both.

If the resident is not eligible for government support with their accommodation costs, they will need to pay the agreed room price as an accommodation payment. They can choose to pay this as either:

• a refundable accommodation deposit (RAD)
• a daily accommodation payment (DAP)
• a combination of both.

Residents choose how they pay

Residents must choose how they pay for accommodation within 28 days of entering care. 

You cannot ask a resident to pay a security deposit or any amount of their accommodation costs as a lump sum RAD or RAC before they enter your service. 

It is up to the resident how they choose to pay. If they don’t choose within 28 days of entering your service, you can only ask them to pay by daily payments (DAP or DAC).

A resident can also choose to pay or top-up a refundable deposit at any time after entering into an accommodation agreement.

In the accommodation agreement, you must record:

• the resident’s date of entry to your care
• the agreed room price for the resident’s accommodation
• all possible accommodation payment and accommodation contribution arrangements for the resident.

Read about:

• managing fees and accommodation costs 
• charging accommodation payments and contributions for residential aged care.

Extra service fee

If your aged care home has extra service status you can offer residents a bundle of extra services and charge an extra service fee. Extra services are hotel-type services, such as:

• better-than-average accommodation
• higher-quality food
• non-care services, like recreational and personal interest activities.

You may have extra service status for your whole service or individual rooms in the service. You can only charge an extra service fee to residents who occupy an extra service room.

IHACPA approves extra service fees. Providers must set out these fees in an extra services agreement. 

If you have extra service status, you can charge GST for any item included in the extra service package that is not GST-exempt.

Additional service fees

If the resident agrees, you can charge additional service fees for services not outlined under Schedule 1 of the Quality of Care Principles 2014. This includes:

• services you are not otherwise required to provide under Schedule 1, such as alcohol options with dinner, hairdressing services, wi-fi and pay TV
• services substantially better than the standard that you must provide under Schedule 1.

If you are charging additional service fees, you must give the resident an itemised account of the services and their costs. This should list the individual services and their costs. It’s not enough to group services together or give a total cost.

The frequency of providing the itemised account should be:

• agreed with the resident
• in a reasonable timeframe – for example, monthly if you charge fees every month
• only while the resident is accessing the agreed additional services.

When you can’t charge additional service fees

You must ensure any fees you charge to residents are consistent with aged care legislation.

Providers cannot charge additional service fees for:

• specified care and services outlined in Schedule 1 of the Quality of Care Principles
• services or activities that are part of the normal operation of an aged care home
• services required as part of your provider responsibilities
• services already covered by the payment of an extra service fee or an accommodation payment.

You cannot charge fees for ‘asset replacement’ or ‘capital refurbishment’, including:

• maintenance inside and outside the aged care home
• any repairs or replacements needed because of normal wear and tear
• general refurbishment of the resident’s room after they have left the aged care home
• services or activities that are part of the general operation of the aged care home
• services or activities that are required to deliver care to the resident
• employment of administration staff whose job mainly involves the general running of the aged care home
• capital costs, asset management or replacement.

The Aged Care Quality and Safety Commission (ACQSC) may receive information about additional service offerings and additional service fees, including through its complaints process.

If you are not meeting your additional care and service responsibilities, the ACQSC may respond by:

• issuing directions to ensure you make improvements to address the concern
• taking necessary compliance and enforcement action.

Read more about managing fees and accommodation costs, including what to do if you have charged or are charging fees that are not permitted.

Difference between extra service fees and additional service fees

You need extra service status and approval from IHACPA to charge extra service fees, but not to offer and charge for additional services.

Extra services and additional services are not like for like. You cannot offer some items that may be allowed under an extra service fee arrangement as an additional service fee. 

When setting additional service fees, refer to Schedule 1 of the Quality of Care Principles for items you must supply to the resident at no additional charge.

When fees can vary

Fees can vary when:

• a resident goes on temporary leave
• a resident gets financial hardship assistance
• a resident who entered care before 1 July 2014 is transferring into your care and chooses to be assessed under the post 1 July 2014 fee arrangements
• your accommodation supplement rate changes
• rates are indexed
• a resident’s cost of care (AN-ACC class and/or eligibility for primary supplements) changes
• a resident reaches their annual or lifetime caps on the means tested care fee.

Services Australia will tell you of these changes after each review of fees.

Residents in financial hardship can apply for help, or you can do so on their behalf. Financial hardship assistance can help to pay the basic daily fee, the means tested care fee and daily accommodation payments.

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