Updated on 1 July 2026
When families start asking, How Much Is Aged Care? there’s often a mix of concern, confusion, and urgency behind that question. And with the major reforms that took effect on 1 November 2025, it’s completely understandable, the cost of aged care has shifted in many ways and its expensive compared to before.
As an Aged Care Specialist Financial Advisor, I’ve supported families through both pre- and post-2025 changes, each with their own goals, financial pressure points, and emotional realities. Seeing how these reforms play out in real situations has given me practical insight into what genuinely helps families make confident decisions.
In this blog, I’ll break down how much aged care is now under the new rules and outline the key strategies every family should understand before making any commitments, so you can approach this stage of life with clarity and confidence.
How Much is Aged Care in Australia Now?
Aged care costs in Australia generally fall into four key categories, and the 1 November 2025 reforms have changed how these fees are assessed and applied. How much you pay comes down to your assets, your income, and the aged care provider you select. Below is a clear breakdown of what each cost involves and what has changed.
1. Basic Daily Care Fee (BDCF) + Hotelling Supplement Contribution (HSC)
Every resident pays this fee, which covers the day-to-day essentials provided by the aged care home, including meals, cleaning, laundry, heating and cooling.
The Basic Daily Care Fee is set at 85% of the basic Age Pension, which is currently $66.80 per day,or $24,382 per year. Like the pension itself, this amount is indexed and increases every March and September.
A few important points to keep in mind:
- The BDCF can be charged up to seven days before you move into care.
- It continues to apply even when a resident is on social leave or hospital leave.
The New Hotelling Supplement Contribution (HSC)
One of the most significant changes introduced on 1 November 2025 is the Hotelling Supplement Contribution.
HSC is an additional daily fee applied to residents with:
- Assessable assets above $238,000, and/or
- Assessable income above $95,400.
The HSC is calculated as:
- 7.8% of assessable assets above $238,000, or
- 50% of assessable income above the threshold.
The contribution is capped at a maximum of $22.15 per day (indexed).
Residents with assets above $290,453 will pay the maximum HSC, which is charged in addition to the Basic Daily Care Fee.
2. Non-Clinical Care Contribution (NCCC)
The NCCC is the new means-tested fee that covers non-clinical care services such as bathing, dressing, mobility assistance, meals, cleaning, and lifestyle activities. This fee applies to residents who enter aged care on or after 1 November 2025.
How much you pay depends on your income and assets. The contribution is calculated as:
- 7.8% of assets above $532,055, or
- 50% of income above $139,048, or
- A combination of both,
- Capped at a maximum of $107.32 per day.
You will only pay the NCCC until you reach one of these limits (whichever comes first):
- You’ve contributed $137,917.01 (indexed) in total, or
- You’ve been in aged care for 4 years.
Below is a summary of how the means-tested aged care fees differ depending on when you enter residential care.
3. Accommodation Cost
The accommodation cost is what you pay for your room in an aged care home, and for many residents, it represents the largest financial commitment when entering care.
The current Refundable Accommodation Deposit (RAD) cap is $750,000. This is the maximum amount aged care providers can generally charge as an upfront fee for accommodation.
The DAP is calculated by applying the government-set Maximum Permissible Interest Rate (MPIR) to the unpaid portion of the RAD. From 1 July 2026 to 30 September 2026, the MPIR is 8.43% per annum.
What this means in daily costs:
- On a RAD of $550,000 (before changes), the daily cost is around $127 per day.
- On a RAD of $758,627 (after changes), the daily cost rises to around $173 per day, which is roughly $16,790 more per year.
You can choose to pay your accommodation cost in three ways:
- Full RAD (lump sum)
- Full DAP (daily payment)
- A mix of both (part lump sum, part daily)
4. Higher Everyday Living Fee (HELF)
The Higher Everyday Living Fee (HELF) is an optional daily fee available to residents who enter aged care on or after 1 November 2025. This fee applies when you choose a higher standard of everyday living services above what is normally provided in either permanent or respite residential aged care.
These upgraded services vary between providers but can include things like:
- Wi-Fi access
- In-room television
- Streaming subscriptions
- Premium meal options
- Hairdressing or beauty services
If you decide you want any of these enhanced services, you’ll need to sign a separate HELF agreement with your aged care provider outlining what you will receive.
Respite residents can also access HELF services (if offered), using the same agreement process as permanent residents. The only difference is that your HELF agreement automatically ends when your respite stay finishes. If you later transition to permanent care, you would simply enter a new HELF agreement at that time.
If you had an additional service fee agreement before 1 November 2025, it could remain in effect on the same terms until 31 October 2026.
In summary, these are the key aged care cost types that determine what you will pay:
- 1 November 2025 fee arrangements – basic daily fee, hotelling contribution, non-clinical care contribution, higher everyday living fee
- 1 July 2014 fee arrangements – basic daily fee, means tested care fee, additional service and extra service fees (until 31 Oct 2026)
3 Key Aged Care Strategies Every Family Should Know
1. Understand Exactly How Your Assets and Income Will Be Assessed
Small differences in timing, ownership, or structure can completely change what you pay, especially under the new thresholds.
Before making any major decisions, such as selling your home, accessing investments, gifting money, or moving funds between accounts, it’s essential to have a clear picture of your assets and income. A proper assessment helps you understand exactly how much you’ll contribute, what counts toward the means test, and how to optimise your position.
Getting this right can make a big difference to your pension entitlements, daily care fees, and the overall affordability of your care.
2. Don’t Rush to Sell the Family Home
For most families, the home is the biggest financial decision when entering aged care. You have several options like selling, renting, keeping it, or even accessing its equity and each one has very different impacts on fees, pension entitlements, and your long-term wealth.
Here’s what to keep in mind:
- Selling the home gives you immediate funds for the RAD, but it increases your assessable assets and may reduce your age pension.
- Renting it out can create income, but rent is counted in means testing and comes with ongoing property costs.
- Keeping the home and using other assets (like super or savings) to pay the RAD allows you to preserve the property for estate planning, but you need to ensure you have enough cash flow for ongoing fees.
- Using a reverse mortgage can free up equity without selling, but the interest compounds and reduces the eventual estate value.
- Gifting or transferring the home may trigger Centrelink gifting rules, stamp duty or tax implications, and can affect aged care fees if not planned carefully.
Because the home is so central to aged care planning, it’s important to compare all scenarios financially and emotionally before deciding what works best for your family.
3. Use the Right Mix of RAD and DAP to Manage Cash Flow
Choosing how to fund aged care is rarely a straightforward decision. Paying the full RAD might be the right move for some families, but for others, a better outcome comes from paying only a portion now and covering the rest through DAP. The way you balance RAD and DAP directly affects your cash flow, your age pension eligibility, your investment position, and ultimately your long-term care costs.
The right mix depends entirely on your financial position, your goals, and how you want to structure your estate for the future.
Example: to show how powerful the right RAD/DAP strategy can be, here’s a simple example of how we helped a family. As Margaret’s Alzheimer’s progressed, their daughter Sarah became worried about her mum’s increasing care needs and the pressure it was placing on her dad, John.
They had a $300,000 RAD to consider. We compared every option with them:
- Paying the full $300,000 RAD
- Paying a part RAD of $150,000 and the rest as DAP
- Paying no RAD at all and covering the full DAP
- Having their daughters pay the RAD on their behalf
After modelling each scenario, the best outcome was clear:
- Paying the full $300,000 RAD themselves was the best outcome.
Why this was the best option?
- A RAD isn’t counted as an assessable asset for Centrelink.
- By paying it in full, they moved $300,000 out of the assets test.
- This meant they became eligible for the full Age Pension.
If they paid a smaller RAD or none, they would have kept more assets in their names. Those assets would be deemed as income, leading to lower pension payments and higher care fees.
If the daughters paid $100,000 each, it would lower their pension and raise their care fees, leaving them worse off.
Below is a visual overview of the strategy we used to optimise aged care costs and protect the family’s financial position.
This example shows why modelling the right RAD/DAP mix is so important. The numbers don’t always play out the way families expect and the and the best strategy is the one that balances cash flow, pension benefits, and long-term planning.
If you’re interested, you can read their full story here.
How Yield’s Aged Care Advisors Can Support You?
Aged care fees and funding options have become increasingly complex, especially with the reforms introduced on 1 November 2025. Every family’s situation is unique, and small differences in assets, income, or timing can have a big impact on how much you pay for aged care.
We work with families to:
- Assess your assets and income to understand how fees will apply to your situation.
- Model different RAD and DAP strategies to optimise cash flow, pension entitlements, and long-term planning.
- Explain optional services and fees such as NCCC and HELF, so you know what you’re paying for.
- Plan the best strategy for your family home to protect your estate, fund aged care, and maintain your lifestyle.
- Advise on your other investments and superannuation to structure them in the most effective way for aged care and supporting your loved ones.
- Assist in finding the best aged care provider that aligns with your situation, preferences, and care needs.
If you or a loved one is planning for aged care or trying to find out how much is aged care, I’m here to help. Book Your free initial consultation with me, Leah Newman, a Certified Aged Care Specialist and we can explore the best options for you and your family.
