Managing fees and accommodation costs for residential aged care

Collecting, reviewing and managing fees is part of managing a residential aged care home. If a resident entered care before 1 July 2014, there are different fee rules.

How to collect fees and accommodation costs

The fees you agree on with a resident depend on:

  • when they enter care
  • their financial situation
  • whether they enter for residential respite care or permanent care.

You cannot ask a resident to pay fees before they enter your care. The only exceptions are: 

  • a booking fee for residential respite care
  • the basic daily fee paid by a permanent resident on pre-entry leave.

Once the resident has entered a resident agreement, you can ask them to pay fees no more than 1 month in advance. This applies to all types of fees and accommodation costs paid as a daily amount. Any fees paid more than 1 month in advance must be refunded, in accordance with Section 11 and Section 75 of the Fees and Payments Principles 2014 (No. 2).

Fees and accommodation costs are calculated daily, but how often the resident is asked to pay is a decision for you.

Accommodation costs

If the resident chooses to pay their accommodation costs in full or in part by a refundable lump sum:

  • you must give them 6 months to pay
  • the resident pays by daily payments until they pay the lump sum
  • you must refund the balance of the lump sum when the resident permanently leaves your care. 

If the resident asks, you must deduct their daily amount from their paid lump sum. Where this reduces the lump sum balance, you can require the resident to maintain the agreed accommodation payment or accommodation contribution. They can do this by:

  • paying increased daily payments
  • topping up the lump sum
  • a combination of both.

If a resident has asked you to hold onto an amount of money more than the total allowable under the Aged Care Act 1997, it is considered a loan. 

This means it:

  • counts as an assessable financial asset for the resident (subject to deeming) 
  • is liable to risk if the provider goes into liquidation. 

Lump sum amounts paid to cover accommodation costs are protected by the Accommodation Payment Guarantee Scheme. But these protections do not extend to lump sums paid to or held by you for any other purpose. 

Before entering into this type of arrangement, both parties should seek independent legal and financial advice.

Reviewing fees

You must ensure you’re charging the correct fees.

The basic daily fee changes in line with the age pension in March and September each year.

Services Australia regularly reviews permanent residents’ fees to account for:

  • changes in residents’ financial circumstances or cost of care
  • changes due to indexation
  • changes to the accommodation supplement the service is eligible for due to its refurbishment status and build date.

This can result in changes to a resident’s:

Permanent residents should notify Services Australia or the Department of Veterans' Affairs of any significant changes to their assets or income to ensure their fees can be set correctly.

After a review, Services Australia will either:

  • send you and the resident (or their nominee) a letter if there is a change to the resident’s fees – you may owe the resident a refund as a result
  • not send a letter if there is a change only to the basic daily fee – it is your responsibility to advise residents of changes to this fee.

If the maximum accommodation contribution changes for a resident who has paid a refundable accommodation contribution (RAC), you must recalculate their daily accommodation contribution (DAC).

Late fees and accommodation costs


The resident agreement must outline how you deal with late and unpaid fees, and include either:

  • the rate of interest you will charge for late payments
  • a method to work out the interest amount.

Accommodation costs

You may charge interest on daily accommodation payments (DAP) and daily accommodation contributions (DAC) that have been outstanding for more than 1 month.

The accommodation agreement must include the rate of interest you will charge for late accommodation payments. You cannot charge more than the maximum permissible interest rate (MPIR)

Pre 1 July 2014 accommodation costs

You may charge interest on accommodation bonds that residents did not pay on the due date. You must include the due date and the rate of interest you will charge for late payments in the accommodation bond agreement. You cannot go above the MPIR.

You may charge interest on accommodation charges that have been outstanding for more than 1 month. You must include the rate of interest you will charge for late payments in the accommodation charge agreement. You cannot go above twice the lower deeming rate.

View these interest rates in the Schedule of fees and charges for pre 1 July 2014 residents.

If fees are not paid

If a resident has not paid any agreed fees or accommodation costs within 42 days of the due date for reasons within their control, you can ask the resident to leave. 

You must first find alternative accommodation for the resident.

Read more about exiting residents from residential aged care.

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.

Refunding overpayments

You must refund fees or accommodation costs to a resident if they paid more than they needed to.

You must pay interest on overpaid amounts of accommodation payment or accommodation contribution if you do not refund them within 28 days of either:

  • becoming aware of the overpayment
  • receiving a written request for the refund of the overpayment from the resident.

For interest calculations see Section 75 of the Fees and Payment Principles 2014 (No. 2)

If you have charged an accommodation payment higher than $550,000 without a valid RAD approval, you must refund the overcharged amount plus any interest. For more information read these fact sheets on the Aged Care Quality and Safety Commission website: 

Managing additional service fees

You can charge for some additional care or services that benefit the resident directly, if the resident agrees. 

You must:

  • record additional service fees in the resident agreement and provide an itemised account of additional care and services fees
  • only charge the resident while they can access and benefit from the additional services they’ve agreed to pay for.

This is different to extra services fees, which only providers with extra service status can charge.

Any fees you charge residents must be consistent with aged care legislation. You must not charge additional service fees for certain services and activities.

If you have wrongly charged or are charging for these types of services and activities, you must cease immediately and refund amounts charged. 

Residents or their families who have been charged additional service fees that are not permitted should talk to you in the first instance. If they are not happy with the response, they should contact the Aged Care Quality and Safety Commission.

Fees on day of departure

On the day a resident permanently leaves your service, you can charge:

You can only charge these fees if you provided the resident with the services they are intended to cover on their day of departure.

You cannot charge:

This is because no aged care subsidy or supplements are payable to your service on the resident’s day of departure. These provisions prevent the residential care subsidy from being paid twice for a resident who moves from one service to another on the same day. The provisions still apply when a person departs one service and does not enter another.

Learn more

Read more about:

Full requirements

For full legislative details see: 


Residential aged care fees contact

Email us for policy information about fees and accommodation costs for residential aged care.
Date last updated:

Help us improve

If you would like a response please use the enquiries form instead.