For a general explanation of how accommodation costs are determined, available payment options and changes effective from 1 November 2025, refer to accommodation costs for residential aged care.
Payment rules that are based on entry date
Some accommodation payment rules differ depending on when a resident enters care.
Entering care before 1 November 2025
Residents entering care before 1 November 2025 must choose how they want to pay for their accommodation within 28 days of entering care.
If they choose to pay by lump sum (in full or part):
- their provider must give them up to 6 months to pay it
- until it’s paid, they must pay the accommodation cost as daily payments.
If they choose to pay by daily payments (in full or part):
- their provider cannot charge for more than one month in advance
- they can pay a lump sum at any time.
Residents who have paid a partial lump sum can top up a lump sum at any time.
Entering care from 1 November 2025
Residents entering care on or after 1 November 2025 are not required to choose how they want to pay for their accommodation within 28 days.
If they choose to pay a refundable lump sum:
- they must pay daily payments or contributions until they pay the lump sum
- if paying by daily accommodation payments (DAPs), indexation may apply
- they can top up or pay the lump sum at any time.
Providers must refund the remaining balance of the lump sum (which excludes retention deductions and other deductions) when a resident permanently leaves their care.
Managing daily payments and lump sums
Providers must manage accommodation payments in line with a resident’s preferences and regulatory requirements.
Deducting daily payments from lump sums
If a resident asks, their provider must deduct daily payments from the paid lump sum.
If this reduces the lump sum balance, the provider may require the resident to maintain the agreed accommodation payment or contribution. This can be done by:
- increasing their daily payments
- topping up the lump sum
- a combination of both.
Applying DAP indexation
DAPs paid by residents who DAP indexation applies to are indexed periodically. Providers must apply the updated rate when indexation occurs.
Applying RAD and RAC retention
If refundable accommodation deposit and contribution (RAD and RAC) retention applies to a resident:
- their provider must deduct retention amounts from the lump sum
- the resident cannot be required to maintain the agreed accommodation amount when it reduces due to retention deductions.
Reporting RAD balances
Under the new Aged Care Act, providers are required to report RAD balances monthly as part of their subsidy claim.
Managing accommodation bonds
Different arrangements apply to accommodation bonds paid under the pre 1 July 2014 accommodation arrangements.
Explaining accommodation costs to residents
It is good practice for providers to ensure that residents understand their accommodation costs – both the amounts they are charged and how these are reflected in their accommodation agreement.
Providers can use the understanding fees for aged care homes fact sheets to explain fees and accommodation costs to residents.
Collecting accommodation costs
Providers must not ask a resident to pay accommodation costs before they enter care. All residents have the right to choose a payment method that suits their circumstances.
Daily accommodation costs (a charge, DAP or DAC) are calculated on a daily basis. However, how often the resident is invoiced is up to the provider.
If a resident pays accommodation costs as a daily amount (in full or part), the provider may request payment up to one month in advance. Any amount paid more than one month in advance must be refunded. Interest may also apply when refunding overpaid amounts.
Reviewing and updating accommodation costs
Providers must ensure they’re charging the correct accommodation costs for each resident.
Some accommodation amounts, such as the maximum DAC, are advised by Services Australia, while others, such as the RAC, must be calculated by the provider.
Learn about:
- how accommodation payments (RADs and DAPs) are calculated
- how accommodation contributions (RACs and DACs) are calculated
- how accommodation bonds and charges are set.
1 July 2014 and 1 November 2025 accommodation arrangements
Services Australia regularly updates the means assessments and fee calculations for residents on the 1 July 2014 and 1 November 2025 accommodation arrangements to account for:
- their financial circumstances changing
- their cost of care changing
- indexation of means testing thresholds
- reaching the annual or lifetime cap on their means tested fee.
This can result in changes to a resident’s:
Residents who have had their means assessed must notify Services Australia notify Services Australia or the Department of Veterans' Affairs of any changes to their assets or income to ensure they are charged the correct fees.
Under the new Aged Care Act, new mandatory reporting will require providers and all residents to report changes within 28 days.
Learn about keeping income and asset information up to date.
Accommodation costs can also vary when a resident:
- gets financial hardship assistance
- opts in to new fee arrangements.
Services Australia will send the provider, the resident and their nominee a new fee advice letter if there is a change to their accommodation contribution. The provider may owe the resident a refund as a result.
The DAC amount in the letter assumes the resident pays fully by DAC. If the resident has paid any amount as a RAC (even if the current RAC balance is zero), the provider must recalculate the DAC to reflect that.
Pre-1 July 2014 accommodation arrangements
For residents who pay an accommodation bond or charge, these amounts are set when the resident enters care.
Services Australia will send a letter to the provider, the resident and their nominee if there is a change to the bond or charge amount.
Late payments
Payments and contributions
Providers may charge interest on DAPs and DACs if they have been outstanding for more than one month.
The accommodation agreement must include:
- the interest rate that will be charged for late payments
- a statement that the rate will not exceed the maximum permissible interest rate (MPIR).
Bonds and charges
Providers may charge interest on:
- accommodation bonds that are not paid by the due date
- accommodation charges that have been outstanding for more than one month.
The relevant agreement (bond or charge) must include:
- the due date for payment
- the interest rate for late payments
- for accommodation bonds, the rate must not exceed the MPIR
- for accommodation charges, the rate must not exceed twice the lower deeming rate.
See interest rates in the Schedule of Fees and Charges for pre-1 July 2014 residents.
If accommodation costs are not paid
If a resident has not paid any agreed accommodation costs within 42 days of the due date for reasons within their control, their provider can ask the resident to leave.
Before doing so, the provider must first find suitable alternative accommodation for the resident.
Learn about exiting residents from residential aged care.
Residents experiencing financial hardship can apply for hardship assistance, or their provider can do so on their behalf. Financial hardship assistance can help to pay the basic daily fee, means tested fees and daily accommodation payments.
Refunding overpaid amounts
Providers must refund any overpaid accommodation costs to the resident.
If the refund is not made within 28 days of either:
- becoming aware of the overpayment, or
- receiving a written request from the resident
then interest must be paid on the overpaid amount.
For interest calculations, refer to:
- the Aged Care Rules under the Aged Care Act 2024
- Section 75 of the Fees and Payment Principles 2014 (No. 2)
If a provider charges more than the maximum accommodation payment amount without a valid RAD approval, they must refund the overcharged amount plus interest.
Accommodation costs on day of departure
On the day a resident permanently leaves an aged care home, their provider can charge an accommodation payment, bond or charge (if applicable).
These can only be charged if the provider delivers the services they are intended to cover on that day.
The provider cannot charge an accommodation contribution.
This is because no aged care subsidy or supplements are payable to the provider 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 aged care home to another on the same day. The provisions still apply when a person departs an aged care home and does not enter another.
Managing fees
Learn about managing fees.
Managing fees for optional services
Learn about managing higher everyday living, additional and extra service fees.
Contacts
Residential aged care fees contact