About fee and accommodation arrangements
Different types of fee and accommodation arrangements can apply to residents.
A resident’s fee arrangements determine the:
- means tested fees they pay
- means testing thresholds, taper rates and caps that apply to them.
Currently there are 2 different fee arrangements that can apply to residents. From 1 November 2025, this will increase to 3 different fee arrangements.
A resident’s accommodation arrangements determine:
- what they pay for their accommodation
- the payment options they can choose from
- whether refundable accommodation deposit or refundable accommodation contribution (RAD or RAC) retention and daily accommodation payment (DAP) indexation apply to them.
Currently there are 2 different accommodation arrangements that can apply to residents. From 1 November 2025, this will increase to 3 different accommodation arrangements.
Upcoming changes under the new Aged Care Act
New fee and accommodation arrangements will be introduced when the new Aged Care Act commences on 1 November 2025.
Our understanding fees for 1 November 2025 fact sheet outlines the fees a resident may be asked to pay for permanent residential care under the new fee arrangements. You can use it to explain the new arrangements to residents who will be entering care and to current residents who are considering opting in.
Which arrangements apply
When a resident enters your care, Services Australia will send you and the resident a fee advice letter. The letter won’t specify which set of arrangements apply (e.g. ‘1 July 2014 fee/accommodation arrangements’) to the resident. Instead, it will state which fees apply to them and the amounts they must pay.
It will also state whether a resident pays an:
- accommodation payment (amount agreed between you and the resident)
- accommodation contribution and the amount payable
- accommodation bond (amount agreed between you and the resident)
- accommodation charge and the amount payable.
Contact Services Australia if you have questions about which fee or accommodation arrangements apply to a resident.
Providers are responsible for charging their residents the correct:
- types and amounts of fees
- types of accommodation costs.
Arrangements won’t always match
From 1 November 2025, a resident’s fee arrangements and accommodation arrangements won’t always match. For example, the 1 November 2025 accommodation arrangements can apply to a resident on the 1 July 2014 fee arrangements.
Their accommodation arrangements might not change when their fee arrangements do.
Pre-1 July 2014 fee arrangements
The pre-1 July 2014 fee arrangements apply to residents who entered care before 1 July 2014 and:
- didn’t opt in to the 1 July 2014 fee arrangements
- didn’t exit residential care for more than 28 days (other than on approved leave) between 1 July 2014 and 1 November 2025
- don’t choose to opt in to the 1 November 2025 fee arrangements.
They will remain on these fee arrangements unless they choose to opt in to the current fee arrangements.
A resident on these fee arrangements may pay:
- a basic daily fee (at one of 3 rates)
- an income tested fee
- fees for optional services.
1 July 2014 fee arrangements
This fact sheet can help explain these fee arrangements to your residents:
Understanding fees for aged care homes – 1 July 2014 fee arrangements
Who they apply to
There are 3 scenarios where a resident may be on the 1 July 2014 fee arrangements.
1. They enter care on or after 1 July 2014 and before 1 November 2025
A resident will be on these fee arrangements if they enter care on or after 1 July 2014 and before 1 November 2025 and:
- didn’t exit residential care for more than 28 days (other than on approved leave) between 1 July 2014 and 1 November 2025
- don’t choose to opt in to the 1 November 2025 fee arrangements.
2. They entered care before 1 July 2014 and opted in to these arrangements
A resident will be on these fee arrangements if they entered care before 1 July 2014 (that is, they were on the pre-1 July 2014 arrangements) and chose to opt in to the 1 July 2014 arrangements.
Residents cannot opt in to the 1 July 2014 fee arrangements from 1 November 2025. They can, however, choose to opt in to the new 1 November 2025 fee arrangements.
3. They are covered by the ‘no worse off’ principle
A resident will be on these fee arrangements if they enter care on or after 1 November 2025 and were receiving a Home Care Package, or approved and waiting for a package, on 12 September 2024.
They will remain on these fee arrangements unless they choose to opt in to the new 1 November 2025 fee arrangements.
Fees under these arrangements
A resident on the 1 July 2014 fee arrangements may pay:
1 November 2025 fee arrangements
This fact sheet can help explain these fee arrangements to your residents:
Understanding fees for aged care homes – 1 November 2025 fee arrangements
Who they apply to
The 1 November 2025 fee arrangements will apply to residents who enter care on or after 1 November 2025.
Fees under these arrangements
A resident on the 1 November 2025 fee arrangements may pay:
- a basic daily fee
- a hotelling contribution
- a non-clinical care contribution
- fees for optional services.
Pre-1 July 2014 accommodation arrangements
A resident on the pre-1 July 2014 accommodation arrangements who has assets above the minimum asset value on the day they entered care may contribute to their accommodation costs through a bond or charge.
1 July 2014 accommodation arrangements
A resident on the 1 July 2014 accommodation arrangements may contribute to their accommodation costs through an accommodation payment or contribution.
RAD/RAC retention and DAP indexation do not apply to residents on these accommodation arrangements.
1 November 2025 accommodation arrangements
A resident on the 1 November 2025 accommodation arrangements may contribute to their accommodation costs through an accommodation payment or contribution.
RAD/RAC retention and DAP indexation will apply to residents on these accommodation arrangements in most circumstances.