What will aged care cost?

Set at 85% of the single Age Pension, so a pensioner can always pay it from the pension. It covers meals, laundry, cleaning and the day-to-day running of the home. About $25,159 a year. No means test, no negotiation.

Every home publishes a price for each room type, up to $789,686 without special approval. Whether you pay it at all depends on the means assessment: low-means residents pay little or nothing and the government pays the home instead. If you do pay, you choose how:

• A lump sum (the "refundable accommodation deposit", RAD). Refunded when the resident leaves, less a retention of 2% a year of the balance, calculated daily, for at most 5 years. On a $550,000 room that is about $11,000 a year.
• A daily payment (DAP) instead: the room price multiplied by a government interest rate, currently 8.51% (1 October to 31 December 2026), divided by 365. The same $550,000 room is about $128.23 a day. Nothing is refunded, and the daily amount rises with inflation each March and September.
• A mix: part lump sum, and the daily payment on whatever is unpaid. Many families pay what they can as a lump sum, and the rest daily.

Under the current rules there is no deadline to choose: daily payments apply until a lump sum is paid, and a resident can pay one later. Try your own figures in the calculator.

Services Australia assesses the resident's income and assets (the letter described in what a home will ask you for) and tells the home how much, if anything, the resident contributes to two things the government otherwise pays for:

• Hotelling contribution, towards food and utilities: between nothing and $22.15 a day.
• Non-clinical care contribution, towards help with bathing, mobility and the like: between nothing and $109.45 a day, with a lifetime cap of $140,653 or 4 years of paying it, whichever comes first. Clinical care, nursing and medication, is never charged to the resident.

Roughly: a full pensioner with assets under $66,500 pays neither. The family home counts towards assets only up to $219,858, and not at all while a partner or a protected person lives in it. Beyond that the contributions rise with means up to the maxima above. The exact amount needs the real figures, and the government's estimator does it properly:

Open the My Aged Care fee estimator

It asks for annual income, assets, and the value of the home if owned, stores nothing, and gives a guide rather than an official statement. The official statement comes with the Services Australia letter.

Some homes offer a "higher everyday living" package: a wine list, a hairdresser, a bigger television. It is a separate agreement, it can be cancelled within 28 days without penalty, and a home may not make it a condition of getting a room.