De-mystifying Aged Care

The journey into residential aged care begins with an essential first step - registering for an Aged Care Assessment through the My Aged Care website. A comprehensive assessment will be done by a clinical assessor to approve you for Support at Home, Respite, and/or Permanent Residential Care.  The next step is to complete the Aged Care Means Assessment which will determine your contribution towards your care.

From 01 November 2025, a Single Assessment System replaces ACAT/ACAS and RAS.  It covers both home care & residential care.  It's designed to streamline the process and includes support plans and regular reviews.

The aged care means assessment determines how much you pay for your Contribution towards your Home Care Fees, Permanent Care Accommodation, Means Tested Care Fee, Hotelling Supplement and Non-Clinical Care Contribution. This assessment is based on your income and assets.

Yes, the Australian Government provides substantial financial support towards aged care services and while this support covers a significant portion of care costs, Support at Home receivers and Permanent Residential Care recipients may still have to make contributions towards the costs depending on their financial situation.

No—they serve very different purposes.

 • Retirement Villages:

  ○ Designed for independent living and lifestyle enhancement

  ○ Offer amenities like gyms, social clubs, and community events

  ○ Entry is a lifestyle choice, not a clinical or care-based decision

  ○ Contracts can be terminated on medical grounds if a resident’s care needs exceed what the village can provide

  ○ Financial contributions are not fully refundable and are often returned only after a new resident occupies the unit

 • Residential Aged Care Facilities:

  ○ Provide 24/7 clinical care for individuals with higher support needs

  ○ Entry is based on an a care needs assessment

  ○ Accommodation payments like the Refundable Accommodation Deposit (RAD) are government-guaranteed and fully refundable

  ○ Residents receive structured care, meals, and support services

From 01 November 2025, the Support at Home program replaces the existing Home Care Packages. 

It offers:

• Tailored in-home care based on assessed needs
• Faster access to services
• Separate funding for equipment and home modifications
• Special pathways for restorative, end-of-life, and culturally safe care

Once you move into permanent residential aged care, your Home Care Package ends. These packages are designed to support people living independently at home, so they no longer apply once you're receiving full-time care in a facility.

Once approved, a person can access up to 63 days (with extensions of 21 days in certain circumstances) of respite care each financial year. Respite proves to be a valuable service to give carer's a break or as a trial period to assess a residential care service.  There are no means-tested care fees or accommodation fees payable during the stay.

If you are living at home with your partner and then move into residential care permanently, you will be assessed as Illness Separated and you and your partners age pension payments may increase.  If it is necessary to rearrange your assets to cover your fees this may result in a change to your assessable assets and income and your pension may change.

The Accommodation or Room Fee is set by the Service Provider and is payable in one of 3 ways:

• Paid as a lump sum - Refundable Accommodation Deposit (RAD): If there have been no fees or retention amounts deducted from the RAD, the RAD payment is fully refundable when the resident leaves the facility.
• Paid as a daily fee - Daily Accommodation Payment (DAP):  Calculated on the outstanding Accommodation/Room fee at the relevant interest rate set by the Government and charged daily.
• Paid as a combination of RAD and DAP: A partial lump-sum payment (RAD) is made, with the remaining balance paid by daily payment (DAP).

• Under $750,000: Facilities have the discretion to set their own Accommodation Payment without approval.
• More than $750,000: Facilities must seek approval from the Aged Care Pricing Commissioner.

Room prices are often affected by supply and demand and in some instances, facilities maybe willing to reduce the RAD.  It's worth discussing pricing with the service provider directly .

If you entered  care between July 2014 and 31 October 2025 the provider is required to refund the RAD paid in full, unless you have made an arrangement  with the provider to deduct fees from the RAD.  From 01 November 2025, any new resident entering care will have an amount of 2% of the paid RAD deducted per year for a maximum of 5 years in addition to any fees requested to be deducted from the RAD.

Yes, you can contribute to another person's Refundable Accommodation Deposit (RAD)—but it’s important to understand how doing this will affect their Age Pension and Aged Care Fees and what happens in the event of their death as it may have negative consequences.

Yes, you can.  From 01 November 2025, when a person enters care, their contract will assume that a DAP is paid.  If at any stage they wish to make a lump sum contribution (RAD payment) the service provider is obliged to take the payment and recalculate the DAP payable.

Residents who entered care prior to 01 November 2025 will not have retention amounts deducted from the RAD they have paid.

Residents entering care after 01 November 2025 will have 2% per annum deducted from the reducing RAD balance for a maximum period of 5  years.

Yes. The Refundable Accommodation Deposit (RAD) only covers the cost of the room. There are still daily care and service fees that must be paid—usually billed monthly by the aged care facility.  You can pay these daily fees out of your bank account or your can choose to have them deducted from your RAD.

The Basic Daily Care Fee is a standard charge that all residents in Australian government-subsidised aged care homes pay to cover everyday living costs like meals, cleaning, laundry, and utilities. 

The Means Tested Care Fee is a government-mandated contribution towards the cost of clinical care and payable to the Service Provider. This fee is determined through an assessment of the resident’s assets and income and is individually calculated. 

The Means Tested Care Fee is payable by existing resdients in Aged Care at 31st October 2025 and grandfathered residents. 

The Hotelling Contribution is an additional daily payment to a service provider to help cover the cost of everyday living services like catering, cleaning, and laundry.  This fee is determined through an assessment of the resident’s assets and income and is individually calculated.

From 01 November 2025, the Hotelling Supplement (HC) is payable by new residents who are not grandfathered. There is no cap applicable to this fee.

The Non-Clinical Care Contribution is a daily fee payable to the service provider to help cover personal care services like showering, dressing, and feeding.  This fee is determined through an assessment of the resident's assets and income and is individually calculated.

From 01 November 2025, the Non-Clinical Care Contribution (NCCC) is payable by new residents who are not grandfathered.  It is means tested and replaces the previous Means Tested Care Fee.  It has a lifetime cap of $130,000 (indexed) or 4 years. 

The Higher Everyday Living Fee (HELF) is an optional unbundled fee that aged care residents can choose to pay for upgraded daily living services—like premium meals, enhanced lifestyle programs, or better furnishings—beyond the standard government-funded care.

The Extra Services Fee is a bundled fee charged by for Higher-quality meals, accommodation features and lifestyle extras such as entertainment or outings. 

The Extra Services Fee is to be replaced by the unbundled and optional Higher Everyday Living Fee (HELF) from 01 November 2025.

No.  If a person does not have sufficient cash assets to pay the RAD, they may choose to sell their home in order to come up with a lump sum to fully or partially pay a RAD.  Alternatively, they can pay a daily fee known as a Daily Accommodation Payment (DAP).

If you do not submit the cost of care form you will be charged the maximum daily fees. In some situations, lodging the cost of care form may not be required—or even beneficial.

A Low Means Resident is someone who qualifies for government support with aged care accommodation and clinical care costs due to their limited financial resources. This classification can significantly reduce the cost of entering residential aged care.

A Fully Supported Resident is someone who qualifies for maximum government assistance when entering residential aged care due to limited financial means.

When assessing aged care fees and pension entitlements, Centrelink treats couples as a single financial unit. This means that:

• All assets and income — regardless of whose name they’re held in — are considered jointly owned for assessment purposes.
• Centrelink will then allocate 50% of the total value to each partner, even if one partner holds all assets in their name.

While gifting assets may seem like a way to reduce your means-tested care fees, Centrelink and the Department of Veterans’ Affairs (DVA) apply strict rules to prevent this strategy from being misused.

A protected person is someone who lives in your home and meets specific criteria under the aged care asset assessment rules. If your home is occupied by a protected person, it may be exempt from asset testing when calculating aged care fees—potentially reducing your costs significantly.

From 01 November 2025 "grandfathering" protects individuals already receiving aged care services. It means:

• Current permanent care residents will experience no changes to their daily fees
• Those approved for a home care package or receiving home care at 12 September 2024 will maintain their existing fee arrangements whilst they continue to receive the new Support at Home.  When they then move to permanent residential care, they will maintain the "old" means testing arrangements to determine their Means Tested Care Fee.

Yes—we can.  Residential aged care in Australia is regulated under the Federal Aged Care Act 2024, which means the same rules and standards apply nationwide, regardless of which state or territory.

General advice gives you information about financial products or services, but it doesn’t consider your personal goals, financial situation, or needs. That means it’s not tailored to you. Before acting on general advice, it’s important to think about whether it suits your circumstances.

Personalised (or personal) advice is financial advice that takes into account your individual goals, financial situation, and needs. It’s tailored to you, and a reasonable person would expect the adviser to have considered your personal circumstances before making recommendations