Fees and costs
Basic daily fees, means-tested care fees, additional services and accommodation costs.
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Residential aged care FAQs
Frequently Asked Questions About Residential Aged Care
Residential aged care can be confusing, especially when families need to make decisions about fees, accommodation payments, the family home, Centrelink and cashflow.
Use these FAQs as a starting point — then get personalised advice before making major financial decisions.
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These are the most common questions families ask when someone is moving into residential aged care.
The family home
Whether you need to sell the home and how the decision may affect fees and pension.
Jump to home FAQsRAD and DAP
Lump sum payments, daily payments, refunds, security and accommodation choices.
Jump to RAD/DAPPension and forms
Age Pension, DVA, means assessments and where to get practical help.
Jump to pension/helpFees and costs
How much will residential aged care cost?
Fees can feel confusing because different charges have different purposes. The exact amount depends on the resident’s income, assets, accommodation choice and care provider.
How much will I pay if I move into residential aged care?
When someone moves into residential care, they may be asked to contribute towards their accommodation, everyday living costs and care costs. The government also pays a large part of the costs for many residents.
The main fee categories are:
- Accommodation payment: Pays for the room and accommodation. It may be paid as a lump sum, daily payment, or combination.
- Basic daily fee: A contribution towards daily living costs such as meals, cleaning, laundry and general care.
- Means-tested care fee: An additional care contribution based on income and assets, if applicable.
- Additional or extra service fees: Optional or agreed extras offered by the provider.
The best way to understand the likely cost is to model the resident’s actual income, assets, accommodation price and home decision.
Does the aged care home I choose affect how much I pay?
Yes, the aged care home can affect accommodation costs because each provider sets room prices for different rooms and services. A larger room, newer facility, preferred location or additional amenities may have a higher room price.
The basic daily fee is generally set by government rules rather than the individual provider. The means-tested care fee depends on the resident’s income and assets, not simply the facility chosen. Additional or extra service fees can vary between providers.
What are additional service fees?
Additional service fees are charges for extra services above standard care and accommodation. Depending on the provider, these may include things such as enhanced meals, entertainment, lifestyle services, hairdressing, pay TV, wine with meals or other extras.
Some extra services are optional, while others may be attached to a particular room or service package. Always ask the provider for a clear schedule of additional fees before signing.
What happens if I use up my savings and can no longer afford care?
If income or assets reduce, the amount payable for means-tested care may also change. Some residents may qualify for government assistance or hardship provisions if circumstances beyond their control mean they cannot meet fees.
Before accepting a place, it is important to check whether the resident can afford the RAD, DAP, care fees and personal expenses over time. Financial advice can help model whether money is likely to last under different options.
Before you accept a room
Check whether the resident can afford the full aged care cost, not just the room price
The RAD or DAP is only one part of the decision. Families should also consider means-tested care fees, personal expenses, Centrelink/DVA changes, home costs and cashflow over time.
The family home
Do I have to sell the home when moving into aged care?
The family home is often the biggest and most emotional financial decision. The right answer depends on cashflow, pension, aged care fees, tax, estate plans and family circumstances.
Do I have to sell my home when I move into aged care?
No, you are not automatically forced to sell the home when moving into residential aged care. Some families sell the home to fund a RAD or improve cashflow. Others keep the home so a spouse or protected person can continue living there, or rent it to generate income.
The choice may affect aged care fees, Age Pension, tax, estate planning and available cashflow. It is worth modelling the alternatives before selling or committing to a payment strategy.
Should we rent the home instead of selling it?
Renting may help generate cashflow, but it can also create tax, maintenance, insurance and Centrelink or aged care assessment considerations. Rental income may help pay fees, but it does not automatically mean renting is better than selling.
The answer depends on the property, family goals, the resident’s other assets, likely length of care and whether a spouse or protected person is involved.
What if a spouse or protected person still lives in the home?
If a spouse, partner or certain protected person continues living in the home, different assessment rules may apply. A protected person may include a qualifying carer or close family member who has lived in the home for a required period and meets income support criteria.
This is a situation where advice is particularly important because the decision may affect accommodation costs, pension entitlement and longer-term family planning.
Before selling the home, compare:
- Full RAD using sale proceeds
- Full DAP while retaining the home
- Part RAD and part DAP
- Renting the home to support cashflow
- Age Pension and aged care fee impacts
- Tax, maintenance and estate planning issues
RAD and DAP
Accommodation payment FAQs
When someone enters permanent residential aged care, the room price is usually paid as a RAD, DAP or combination. The right option depends on the resident’s full financial position.
What is a Refundable Accommodation Deposit (RAD)?
A Refundable Accommodation Deposit, or RAD, is a lump sum paid to the aged care provider for the resident’s accommodation. Paying a RAD can reduce or remove the daily accommodation payment, but it also ties up capital that may otherwise be used for cashflow, investments or family needs.
A RAD is generally refundable when the resident leaves care or passes away, less any permitted deductions, unpaid fees or any applicable retention under the rules that apply.
What is a Daily Accommodation Payment (DAP)?
A Daily Accommodation Payment, or DAP, is a daily payment made instead of paying the full accommodation amount as a lump sum. It works like paying interest on the unpaid room price.
DAP can preserve cash in the short term, but it is not refundable and can place ongoing pressure on cashflow.
Can I pay part RAD and part DAP?
Yes. Many families choose a combination strategy, paying part of the accommodation amount as a RAD and paying DAP on the unpaid balance. This can reduce the daily cost while keeping some capital available for flexibility.
This is often worth modelling where the family is unsure whether to sell, rent or keep the home.
What if I cannot afford the accommodation payment?
If the resident has low income and assets, they may qualify as a low-means resident and receive government support for accommodation. In that case, the amount payable towards accommodation may be based on their assessable income and assets.
If you think low-means rules may apply, you should complete the relevant assessment and ask the chosen provider whether a supported place is available.
If I pay a RAD, how secure is the money?
RADs paid to approved residential aged care providers have government-backed protections. This is designed to protect residents if an approved provider cannot repay the RAD.
You should check that the provider is an approved aged care service and read the accommodation agreement carefully.
If I pay a RAD, when is it refunded?
If the resident permanently leaves care, transfers, or passes away, the RAD is generally repaid according to aged care rules and the accommodation agreement. If the resident passes away, the RAD is usually repaid to the estate, often after probate or required estate documentation is provided.
The amount repaid may be reduced by permitted deductions, unpaid fees, requested deductions or any applicable RAD/RAC retention rules. Families should not assume every dollar will always return without checking the resident’s agreement and the rules that apply.
Pension, forms and help
Centrelink, DVA and getting advice
Moving into care can change how income and assets are assessed. This is where aged care advice can help turn general rules into a plan for your family.
Will I still receive Age Pension after moving into aged care?
You may still receive Age Pension or DVA payments after moving into aged care, but the amount can change. It depends on the resident’s income, assets, relationship status, home ownership and how accommodation payments are structured.
If the resident is part of a couple, pension assessment and payment rates may change when one or both members enter care. If the former home is kept, sold, rented or used to fund a RAD, different assessment outcomes may apply.
Do I need to update Centrelink or DVA?
Yes. Centrelink or DVA should be updated when circumstances change, including moving into residential aged care, selling the home, renting the home, paying a RAD, changing bank balances or changing income.
Failing to update information can lead to incorrect pension payments, aged care fees or later adjustments.
Where can I get help to make aged care decisions?
You can access general information from My Aged Care, Centrelink, DVA and aged care providers. However, those sources usually cannot give personalised financial advice about what is best for your family’s full situation.
A qualified aged care financial adviser can help compare options for RAD/DAP, the family home, cashflow, Centrelink/DVA, tax, estate planning and how long money may last.
When should we seek financial advice?
Ideally, seek advice before signing major accommodation documents, selling the home, paying a RAD, or choosing a DAP strategy. Advice is especially valuable if the family home, superannuation, pensions, investments, tax, estate planning or family disagreement are involved.
Getting advice
General information answers the rules. Advice applies them to your family.
Residential aged care decisions can affect cashflow, Centrelink or DVA payments, aged care fees, taxation, estate planning and family outcomes.
We help families compare the options so decision-makers can understand the consequences before committing.
Aged care advice can help with:
- How to pay for accommodation
- RAD, DAP and part RAD/part DAP comparisons
- Whether to sell, rent or keep the home
- Age Pension or DVA implications
- Cashflow and affordability projections
- Tax and estate planning considerations
- Family decision-making and attorney support
Useful next steps
Read more about the decisions behind these FAQs
These pages go deeper into the aged care decisions families ask about most.
RAD vs DAP in Aged Care
Learn how lump sum and daily accommodation payments work before choosing a strategy.
Aged Care Advice Costs
Understand our fixed-fee advice packages and when different advice levels may apply.
Aged Care Financial Planning Services
See how we help families compare home, accommodation, cashflow, Centrelink and fee decisions.
Still unsure what applies to your family?
Book a free introductory call to discuss where you are in the aged care process, what decisions are urgent and whether personalised aged care financial advice is appropriate.
General information warning: This page provides general information only and does not take into account your objectives, financial situation or needs. Aged care rules, fees and rates can change. You should seek personalised advice before making financial decisions.