Navigating the cost of aged care in Australia can feel like one of life’s most stressful challenges. You want the best care for your loved one, but the complexity of the fees—from the basic daily fee to the means-tested calculations and accommodation costs—can be overwhelming.

This guide is designed to be your single source of truth. We will walk you through every fee, show you how to get an official estimate, and answer the real-world questions that cause the most confusion.

How to Estimate Your Aged Care Fees: The Official Calculator

Before we dive into the details, let’s address the main reason you’re here: calculating the cost.

The Australian Government provides an official tool to help you with this: the My Aged Care Fee Estimator.

  • What it is: An online calculator that provides an estimate of the fees and charges you might have to pay for both Home Care Packages and residential aged care.
  • Where to find it: My Aged Care - Fee Estimator
  • Why use it: While this guide will explain the components, the Fee Estimator is the best way to get a personalised calculation based on your specific financial situation.

Step-by-Step Guide: Understanding the Fee Process

Calculating your fees is part of a broader process. Here’s the journey from assessment to receiving care.

Step 1: The My Aged Care Assessment (ACAT)

Everything starts with an assessment from My Aged Care to determine your care needs and eligibility for government-funded services. This is not a financial assessment, but a clinical one. You can learn more at the My Aged Care website.

Step 2: The Formal Means Assessment

This is the critical financial step. You must complete a formal income and assets assessment through Services Australia or the Department of Veterans’ Affairs (DVA). This assessment determines what you will contribute to your care costs.

Step 3: Receive Your Fee Letter

Once the assessment is complete, you’ll receive a letter from Services Australia explaining the maximum fees you can be asked to pay. You will use this letter when making an agreement with your chosen aged care provider.

Demystifying the Costs: A Breakdown of Every Fee

Understanding the different fees is the key to managing your budget. Here’s what makes up the total cost.

Fee TypeWho Pays ItWhat It CoversKey Details & Official Source
Basic Daily FeeEveryone in government-funded aged care.Day-to-day living costs like meals, cleaning, laundry, and utilities.For residential care, it’s capped at 85% of the single person’s basic Age Pension. Source
Means-Tested Care FeePeople with income and assets over a certain threshold.A contribution towards the clinical cost of your care.This fee has annual and lifetime caps. For the latest caps, see the Dept. of Health Schedule of Fees.
Accommodation CostsResidents who can afford to contribute to their room cost.The cost of the room in the aged care facility.Paid as a RAD, DAP, or combination. The government may fully or partially cover this for residents with low means. Source

The Means-Tested Care Fee in Detail

This is an additional contribution based on your means assessment. There are annual and lifetime caps on how much you can be asked to pay.

  • Annual Cap: Changes with indexation.
  • Lifetime Cap: As of 1 July 2024, the lifetime cap is $82,347.13. Once you reach this cap, you cannot be asked to pay any more means-tested care fees.
  • Official Source: Services Australia - Means test for aged care

Accommodation Costs: RAD vs. DAP (Residential Care Only)

This is for your room in the aged care home. If the means assessment shows you can afford it, you will negotiate the room price with the provider. You have 28 days after moving in to decide how you’ll pay.

  • Refundable Accommodation Deposit (RAD): A lump-sum payment, like an interest-free loan to the provider. The balance is fully refunded to you or your estate when you leave.
  • Daily Accommodation Payment (DAP): A daily rental-style payment. The DAP is calculated using the unpaid RAD amount and a government-set interest rate (the Maximum Permissible Interest Rate, or MPIR).
  • Combination: You can choose to pay part of the RAD and pay the rest as a DAP.

Frequently Asked Questions

This is where we tackle the real-world questions and worries discovered from forums like Reddit and Whirlpool.

Will I have to sell my home?

This is the most common fear. The answer is: not necessarily. Your former home is exempt from the assets test for residential care indefinitely if your spouse or a ‘protected person’ continues to live there. If no protected person lives there, the home is included in the assets test, but its value is capped. As of July 2025, this capped value is around $201,231.20. It is crucial to get financial advice on this.

What happens if I can’t afford the fees?

If you are having difficulty paying your fees for reasons beyond your control, you can apply for financial hardship assistance. The government has provisions to ensure no one is denied care because they cannot afford it. You can find out more at the My Aged Care financial hardship assistance page.

Is the My Aged Care Fee Estimator accurate?

The estimator is a very good guide, but it is only an estimate. The final amount is determined by the formal means assessment from Services Australia and the specific room price you agree on with your provider.

What are the biggest mistakes people make?

The biggest mistake is not getting the means assessment done before starting to look for aged care. Not knowing your exact costs makes it impossible to choose a suitable facility. The second biggest mistake is not seeking independent financial advice from an expert in aged care.

How does my pension get affected?

The Age Pension is included in the income assessment. How your aged care fees affect your pension depends on your individual financial situation, including whether you pay for your accommodation as a lump-sum RAD or a daily DAP, as this changes your asset and income profile.

We’re Here to Help

Understanding aged care fees is the first step towards making confident decisions. While the system is detailed, it is designed to be fair and accessible.

At MD Home Care, we believe in empowering you with clear, straightforward information. We can help you understand your options and connect you with the right services.

If you have questions about aged care fees or need help navigating the system, contact MD Home Care today.