Scenario A: Full pensioner, no home (Mario)
Income $32,000 · Assets $15,000
- Government covers accommodation.
- Basic daily fee: $66.80/day.
- Means-tested contributions: $0 under current circumstances.
- Optional extras only if chosen.
Fees & funding
Aged care fees, made clear
Aged care costs are confusing, and the rules changed in November 2025. Here is how residential fees work in Australia, with the parts that matter explained simply. When you are ready, we will sit down and work out exactly what it means for your family.
What you pay for
The four parts of an aged care fee
Almost every fee is built from the same handful of parts. Once you can see them laid out, the whole thing gets a lot less daunting.
Basic daily fee
A daily fee that every resident pays towards everyday living, such as meals, laundry and cleaning. It is set by the Australian Government as a percentage of the age pension and changes when the pension does.
Means-tested care fee
An extra contribution towards the cost of your care. Whether you pay it, and how much, depends on an income and assets assessment carried out by Services Australia or the Department of Veterans’ Affairs. Many residents pay little or nothing.
Accommodation cost
What you pay for your room. This can be paid as a refundable lump sum (a RAD), a daily payment (a DAP), or a combination of both. Accommodation is government-regulated and based on room size.
Everyday living fees
Optional additional services some residents choose, such as certain extras above the standard offering. These are always optional and explained up front, never a surprise.
Which rules apply
Which fee arrangements apply to me?
One of two different sets of fee arrangements applies if you enter residential aged care on or after 1 November 2025. Which one you fall under shapes the fees and contributions you may be asked to pay.
1 November 2025 fee arrangements
Basic daily fee, hotelling contribution, non-clinical care contribution, and a higher everyday living fee.
1 July 2014 fee arrangements
Basic daily fee, means-tested care fee, and a higher everyday living fee.
If you were receiving a Home Care Package, or were approved and waiting for one, on or before 12 September 2024 and you later move into residential care, you are protected by the no worse off principle and will pay fees under the 1 July 2014 arrangements. Otherwise, the 1 November 2025 arrangements apply. Everyone entering permanent care may also be asked to pay towards their accommodation costs.
The kinds of fee
What fees might I have to pay?
The fees and how much you pay depend on your entry date and circumstances, your income and assets as assessed in your means assessment, the care you need, and the room price agreed with us.
Basic daily fee
An amount that all aged care home residents pay for everyday living, such as meals, laundry and utilities. Everyone pays this fee.
Means-tested contributions
Extra contributions based on your means assessment. From 1 November 2025 this can include a hotelling contribution towards everyday living costs, and a non-clinical care contribution (NCCC) towards care such as bathing, mobility and lifestyle activities.
Accommodation costs
An amount towards the full cost of your room, depending on your means assessment. This can be paid as a RAD or DAP (or, for some, a DAC or RAC) if you are eligible.
If you enter permanent care on or before 31 October 2025, your current resident fees and accommodation costs stay the same while you remain in care, unless you opt in to the 1 November 2025 arrangements.
The accommodation cost
RAD or DAP, explained
RAD Refundable Accommodation Deposit
A refundable lump sum you pay for your room, like a bond. It is returned in full when the resident leaves, less any amounts you have agreed to draw from it, and it is government-guaranteed up to the legislated limit.
DAP Daily Accommodation Payment
A daily rate for your room instead of a lump sum, a bit like rent. You can also split the two, paying part as a RAD and the rest as a DAP. We will help you decide what suits you.
Room types and accommodation
Room types and accommodation payments
The Willows has 40 beds across four room types. Each room type has a maximum Refundable Accommodation Deposit (RAD), shown below. Your own accommodation cost depends on your room and your means assessment, and we will confirm it with you in person.
Room type Rooms Refundable Accommodation Deposit
Single 5 $400,000
Double 5 $380,000
3 Bed Ward 3 $360,000
4 Bed Ward 4 $340,000
RAD retention. From 1 November 2025, RAD and RAC retention may apply for eligible residents. These amounts are non-refundable and reduce the maximum RAD a provider can hold. The retention rate is set in legislation at 2% per annum (applied as a daily rate). After 5 years in care, retentions can no longer be deducted.
Daily Accommodation Payment (DAP). A DAP is worked out as DAP = Room price × MPIR ÷ 365. For example, $400,000 × 7.69% ÷ 365 = $84.27 per day. The MPIR (Maximum Permissible Interest Rate) will be indexed in March and September each year.
These examples are general information only and are not financial advice. Please seek independent financial advice.
What moves the figure
What affects your fees
A few things change what a family ends up paying. Knowing them up front takes some of the worry out of the paperwork.
- Your income and assets (how your home is counted matters).
- Whether a partner stays living in your home (a protected person).
- Your agreed room price and how you pay (RAD, DAP, or a mix).
- Indexation dates (for example, the DAP is reviewed on 20 March and 20 September).
Tip. Services Australia sends a fee advice letter after your means assessment, setting out your maximum fees.
These examples are general information only and are not financial advice. Please seek independent financial advice.
Getting started
Three steps to knowing your costs
The Willows does not run the government assessments, but we will help you navigate every step and make sense of what comes back.
1
An ACAT assessment
Register with My Aged Care and arrange a free ACAT assessment. This confirms the level of care your loved one is eligible for. The Willows does not run these assessments, but we will help you understand the process.
2
A means assessment
Complete an income and assets assessment with Services Australia (Centrelink) or the Department of Veterans’ Affairs. This determines your means-tested care fee and any help you may receive with accommodation.
3
We sit down together
Bring it all to us. A member of the family will walk you through exactly what your costs would be at The Willows, clearly and patiently, with no pressure to decide.
Residents are welcome to keep their own doctor, so a familiar GP can stay part of your loved one’s care.
Worked examples
Comparing two residents
Real situations make the figures easier to picture. Here are two residents with very different means, and how their fees come out. Yours will be confirmed in your own fee advice letter.
Scenario B: Self-funded, owns home (Sakura)
Income $52,000 · Assessable assets $554,884
- Means-tested amount: $121.33/day (income $22.92 + assets $98.41).
- Basic daily fee: $66.80/day.
- Contributions: Hotelling $22.15/day; Non-clinical $26.88/day.
RAD $400,000
DAP $87.23/day (indexed)
Mix $200k RAD + $43.62/day DAP
Note. Lifetime cap applies to non-clinical care contribution.
These examples are general information only and are not financial advice. Please seek independent financial advice.
Part-pensioners compared
Two part-pensioners, side by side
How the family home is treated makes a real difference. These two examples share the same income but reach very different outcomes.
Scenario C: Part-pensioner, partner at home (Julie)
Assessable income $44,000 · Assets $78,000
- Means-tested amount: $19.42/day.
- Basic daily fee: $66.80/day.
- Accommodation contribution: DAC $19.42/day (or RAC/DAC).
- Example: $40,000 RAC gives DAC $11.04/day.
- Means-tested contributions: $0 under current circumstances.
Scenario D: Part-pensioner, moving out (Raj)
Assessable income $44,000 · Assets $292,884
- Means-tested amount: $92.70/day.
- Basic daily fee: $66.80/day.
- Means-tested contributions: Hotelling $20.40/day; Non-clinical $0.
RAD $400,000
DAP $87.23/day (indexed)
Mix $100k RAD + $65.42/day DAP
These examples are general information only and are not financial advice. Please seek independent financial advice.
A couple, together
When both partners enter care
If Julie and Raj move in together, the path they choose for the family home changes the numbers. Here are three ways the same couple could be assessed.
Keep home; Raj pays DAP
- Julie's DAC $72.30/day
- Contributions $20.40/day
Sell home; proceeds in bank
- Each assets $378,000
- MTA $107.38/day
- Contributions $35.08/day
- Julie's DAC $72.30/day
Sell home; pay RAD for Raj
- Similar contributions
- RAD excluded from pension asset test but counted for aged care assets
Exact figures come from your Services Australia fee advice letter.
These examples are general information only and are not financial advice. Please seek independent financial advice.
Paying for your room
Accommodation payments explained
Your room can be paid three ways. Each is set out below, followed by the formula used to work out a Daily Accommodation Payment.
RAD
Refundable lump sum; agreed deductions may apply (RAD retention).
DAP
Non-refundable daily payment; indexed twice yearly.
Combination
Part RAD reduces the DAP; the DAP can be drawn from the RAD.
The MPIR (Maximum Permissible Interest Rate) will be indexed in March and September each year. These examples are general information only and are not financial advice. Please seek independent financial advice.
Your own number
Get your personal figure
The examples above are general. To get the figure that applies to your family, three steps with Services Australia give you a fee advice letter setting out your maximum fees.
1
Keep your details up to date
Make sure your Centrelink and Services Australia details are current, so your assessment reflects your real circumstances.
2
Apply for a cost-of-care calculation
Apply online for "Aged care calculation of your cost of care", or call Services Australia on 1800 227 475.
3
Receive your fee advice letter
You will receive a fee advice letter setting out your maximum fees. Bring it to us and we will walk through exactly what it means at The Willows.
These examples are general information only and are not financial advice. Please seek independent financial advice.
Common questions
Fees, answered simply
How are aged care fees worked out?
Fees are made up of a basic daily fee that everyone pays, a means-tested care fee based on your income and assets assessment, and an accommodation cost based on your room. Your personal fees depend on an assessment by Services Australia or the Department of Veterans’ Affairs, so they are different for every family. We are happy to walk you through your situation.
What is a RAD?
A RAD is a Refundable Accommodation Deposit, a lump sum you pay for your room. It is fully refundable when the resident leaves, less any amounts you have agreed can be drawn from it. It is guaranteed by the Australian Government up to the legislated limit.
Can I pay daily instead of a large lump sum?
Yes. Instead of a RAD lump sum you can pay a DAP, a Daily Accommodation Payment, which is a daily rate for your room. You can also pay part as a lump sum and the rest daily. We will help you weigh up what suits your circumstances.
Will Centrelink look at our income and assets?
Yes. Services Australia (Centrelink) or the Department of Veterans’ Affairs carries out an income and assets assessment to work out your means-tested care fee and any assistance with accommodation. This is a separate step from the ACAT care assessment.
What changed on 1 November 2025?
New aged care fee arrangements took effect on 1 November 2025. Depending on your means assessment, fees may now include a basic daily fee, hotelling and non-clinical care contributions, accommodation costs, and optional higher everyday living fees. We can explain how these apply to you and point you to the right Services Australia or DVA assessment.
Does someone need Power of Attorney to handle fees?
It helps to have a Power of Attorney or an authorised representative in place so a trusted family member can manage payments and paperwork. If you do not have this arranged yet, we can point you in the right direction.
Fees are personal. Let us walk you through yours.
Every family’s situation is different, and the paperwork can feel overwhelming. Call us and a real person, often a member of the family, will talk it through with you. No pressure, no rush.
Fees, funding & visiting Come and see for yourself.
Come and see for yourself.
The kettle’s on.
Choosing a home for a parent is a big, often sudden decision. Leave your details and we will be in touch to arrange a visit, walk you through the government fees so they are easy to understand, and answer every question – no pressure, no rush.
Visiting
Welcome until 8pmCome as often as you like – your family is ours
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Someone from our family will call you to arrange a time to visit. The kettle’s on.