Aged care homes are required to provide at least a minimum standard of care and level of service. Some aged care homes have funding arrangements with the Australian Government. A home that isn’t funded (or part-funded) by the Australian Government, is regulated by the state government instead.

But what does an aged care home cost?

What are the costs?

A room price

You will need to decide on a room price. The home sets the room prices, but you may be able to negotiate. The amount you pay and the amount the government pays towards the room price depends on your income and assets.

According to*, the average amount charged as a room price nationally was approximately $440,000 in April 2021. Of course, this can vary significantly between homes.

You have a choice in how you will pay this room price, or ‘accommodation amount’. You can pay for your accommodation as:

  • an upfront refundable lump sum. Known as a Refundable Accommodation Deposit (RAD). The balance of your deposit is refunded to you or your estate when you leave the home. You may also drawdown on your upfront refundable lump sum payment to meet other aged care costs.
  • a rental-style daily payment. Known as a Daily Accommodation Payment (DAP), it is a regular payment (often charged monthly) based on a daily interest rate.
  • a combination of both. For example, you could pay 20% of the room cost upfront and then pay a rental-style payment for the interest on the remaining 80%.

In spite of what you might have heard, you may not need to sell your home to move into an aged care home, but what is best for your finances is a very personal decision.

We recommend you speak to a financial planner with experience in the area of aged care or to a Services Australia (Centrelink) Financial Information Service Officer for more information about what may apply in your situation.

If you have a partner, any lump sum you pay for your aged care could affect their means-tested care fees or accommodation cost.

Ongoing costs

On top of the room price, and whether the home is regulated by the federal or state government, there are costs every resident pays:

  1. A basic daily fee (up to a daily maximum)
  2. Care fee (up to a daily maximum, and up to a maximum over your lifetime. This cost is means tested)

Are there extra costs?

There are extra costs which may apply. The home must advise of these costs in advance. You will not be asked to pay for anything you have not agreed to. The government doesn’t subsidise these costs so you will need to pay the whole cost of these yourself:

  1. Additional service fees
  2. Extra service fees

Additional services are things that many aged care homes provide which you pay for as you use them. They are designed to give you a higher standard of living and can include things like hairdressing appointments, your preferred brand of toiletries and so on.

Some aged care homes have an ‘extra service’ status and charge extra service fees. Extra service is typically a higher standard of hotel-type service, including higher quality linen, a la carte menus, wine with dinner and higher quality room furnishings. The extra service status can apply to certain rooms or the whole home. The extra services typically come in a bundle and, if you are in an extra service room, you will have to pay the fee whether you use the services or not.

Ask if the aged care home has ‘extra service’ status, what is included if they do, and the fee they charge for this.

Subsidised care

Anyone may be eligible for a government subsidised place in a care home. An assessment of your needs determines your eligibility. The assessment will include, in part, whether you can stay in your own home. Therefore, your financial situation doesn’t determine your eligibility, but it will determine the amount you have to contribute towards your aged care home place.

So, what does it actually cost?

Sadly, this question is a lot like ‘how long is a piece of string?’. There are many, many variables. The outcome of your means test, the costs that the aged care home charge for accommodation, for standard services and for any extra or additional services all interact to give you a personalised cost.

What does an aged care home cost? You can use the estimator on to see the daily fees which could apply to you.

Getting personalised information

The cost of aged care is as highly personalised as the services you require. We strongly recommend you get financial advice. Services Australia has Financial Information Service Officers who are extremely knowledgeable in this area and can help you get all the right information. They are impartial and, while they can’t give advice, they will help you understand the different options.

Speak to them in person by appointment. Simply call 132 300 and say “Financial Information Service” when asked why you are calling.

Watch their video about the service they provide.

Read more about them here:


The has some examples of different scenarios impacting on a person’s aged care costs. The examples include a self-funded retiree, a full pensioner and a part-pensioner.

See the page here: (towards the bottom of the page).

You can find out more about the different support services available on our Social Services page.


*this statistic comes from

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