How Much Does a Nursing Home Cost in Australia?
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Paying for an aged care home: a plain-English guide
The Short Answer — What a Typical Family Actually Pays
For most Australian families, moving a loved one into a residential aged care home (nursing home) involves three distinct fee components, regulated by the Federal Government.
Typical Annual & Daily Costs Snapshot
~$24,382 / year. Covered 100% by the Age Pension. $0 room deposit, $0 means-tested care fee.
Basic daily fee + partial daily room rental or partial RAD lump sum. Small means-tested fee if assets allow.
Full room cost + means-tested care fee co-contribution based on income and assets.
The basic daily fee is $66.80 a day. Your home is counted, not taken — and only up to $214,884. What you'll actually pay, what happens if you can't afford it, and why your children aren't liable.
Will You Have to Sell the House?
You almost certainly do not have to sell the house.
Your home is counted, not taken — and only up to $214,884.
How the Family Home is Counted for Aged Care Means Testing
When Services Australia calculates your aged care assets test, the family home receives unique protective concessions under Commonwealth guidelines:
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Capped Home Value Rule Maximum $214,884 Counted
Even if your family home is worth $1,500,000 or $3,000,000, Services Australia only counts a maximum capped amount of $214,884 toward your aged care asset assessment.
-
Protected Person Exemption $0 Counted (Completely Exempt)
Your home is 100% EXEMPT from the aged care asset test ($0 value counted) if a protected person (such as a spouse or eligible carer) continues living in the home.
Options for the Family Home
Keep the Home Empty or for Family
The home's assessable value is capped at $214,884. You pay the Daily Accommodation Payment (DAP) out of existing cash, pensions, or superannuation without selling.
Rent Out the Family Home
Rental income generated is counted under the Income Test (affecting Age Pension and Care Fees), but the house asset value remains capped at $214,884.
Sell the Home to Pay a RAD
Selling turns the property into liquid cash. Using that cash to pay a Refundable Accommodation Deposit (RAD) eliminates the ongoing daily DAP interest fee.
Pay DAP directly out of RAD Balance
You can pay a partial RAD deposit and instruct the nursing home to draw down the remaining DAP interest directly from your RAD balance over time.
Two different clocks
The Age Pension and aged care fees are assessed using different rules for the same house. For aged care, an empty home is counted at the capped value from day one. For the Age Pension assets test, an empty home is exempt for two years, then counted at full market value.
That two-year exemption expires quietly. On the second anniversary of entering care, a part pension can reduce sharply or stop altogether. If a partner stays in the home, the two-year clock does not start until they leave. Put a reminder in the calendar for month twenty-one.
What If You Can't Afford It? (The Safety Net)
There are hard caps on what you can be charged plus a hardship safety net; and adult children have no legal liability for a parent's care fees.
Supported Resident Safety Net
If your total assessable assets are below the government threshold, you receive financial support and the government subsidises your accommodation costs.
Financial Hardship Assistance
If you hold illiquid assets but cannot meet daily fees without severe financial hardship, you can apply to Services Australia for official Financial Hardship Assistance.
How to apply for hardship assistance
Apply using form SA462 through Services Australia. A decision usually comes within 28 days. Tell your provider the day you apply — they can pause your contributions while it is assessed. Assets you genuinely cannot sell or borrow against can be excluded from the threshold if you document them. You will not be removed from care while an application is being processed.
Services Australia aged care line: 1800 227 475
Who Pays — The Government's Share vs Yours
Residential aged care funding is a co-contribution model split between the Commonwealth Government and the resident:
🏛️ The Government's Share
The Commonwealth subsidises personal care, clinical nursing care, medication administration, and specialized health support for residents.
👤 The Resident's Share
The resident contributes toward everyday living costs, room accommodation, and optional extra services:
- Basic Daily Fee: Meals, utilities, laundry, cleaning ($66.80/day)
- Accommodation: Room deposit (RAD) or daily rental (DAP)
- Care Fee Co-contribution: Assessed based on income and assets
The Three Fees, Plainly
Basic Daily Fee
The basic daily fee is set at $66.80 a day for every resident in Australian residential aged care. It covers meals, cleaning, laundry, heating, cooling, and utilities.
Accommodation (RAD or DAP — and why you can choose)
This covers the physical room and facility accommodation. Non-supported residents pay the published room price set by the facility. You can choose to pay in three ways:
1. RAD (Refundable Accommodation Deposit)
A lump-sum deposit. The balance is refunded when you leave care or die, less any retention amount. Backed by the Australian Government's Accommodation Payment Guarantee Scheme.
2. DAP (Daily Accommodation Payment)
A daily payment calculated based on the room price and standard interest rate.
3. Combination Payment
Pay a partial RAD deposit and a reduced daily DAP payment on the remaining balance.
Why You Have 28 Days Post-Entry to Decide
Under federal rules, you do not need to pay a lump sum upfront on admission. You have 28 days after moving in to choose whether to pay RAD, DAP, or a combination.
Hotelling and Non-Clinical Care Contributions
Residents who entered care from 1 November 2025 may pay two separate means-tested contributions, assessed by Services Australia. The hotelling contribution is capped at $22.15 a day. The non-clinical care contribution is capped at $107.32 a day and stops at the earlier of a lifetime cap of $137,917.01 or four years of paying it. Clinical care is fully funded by the government and is never means tested. All these amounts are indexed on 20 March and 20 September each year; the rates shown apply from 20 March 2026.
Residents who entered care before 1 November 2025 pay the earlier means tested care fee instead, under grandfathered rules that are generally more generous.
Nursing Home vs Retirement Village
Residential Aged Care Homes (Nursing Homes) provide 24/7 personal and clinical care, whereas Retirement Villages (Independent Living Units) offer independent housing for active seniors under separate commercial agreements.
| Feature | Nursing Home (Residential Aged Care) | Retirement Village (Independent Living) |
|---|---|---|
| Primary Purpose | 24/7 personal & clinical nursing care for frail seniors | Independent lifestyle housing for active retirees |
| Government Assessment | Aged Care Assessment Required | No Assessment Required |
| Entry Payment Structure | RAD (Refundable Deposit) or DAP daily payment | Entry Contribution / Leasehold Purchase Price |
| Deposit Protection | Government Guarantee Scheme | Subject to State Real Estate Agreements |
Do your children have to pay?
There is no legal obligation in Australia for adult children to pay their parents' aged care fees. No filial responsibility law exists here. Fees are assessed on the resident's own income and assets — and, if they have a partner, on the couple's combined position, but never on the children's.
Families often choose to help. That is a personal decision, not a legal duty, and if the money is a loan rather than a gift it should be documented properly, because it will matter to the estate later.
Where to get help — free
| Organization / Line | Phone | Details |
|---|---|---|
| Services Australia aged care line | 1800 227 475 | Fee assessments, hardship applications |
| Financial Information Service | 132 300 | Free, independent, not selling anything |
| My Aged Care | 1800 200 422 | Assessments, provider search, fee estimator |
| Older Persons Advocacy Network | 1800 700 600 | Free advocacy if something isn't right |
| Aged Care Quality and Safety Commission | 1800 951 822 | Complaints about fees or care |
Frequently Asked Questions
What happens to the Refundable Accommodation Deposit (RAD) when a resident passes away or leaves?
For residents who entered care from 1 November 2025, the provider may retain 2% of the deposit balance each year for up to five years — a maximum of 10%. The remaining balance is refunded to the resident or their estate when they leave care or die, within the timeframes set in legislation. The refund is backed by the Australian Government under the Accommodation Payment Guarantee Scheme, which repays the balance if a provider becomes insolvent.
Can a nursing home increase the RAD or room price after I move in?
No. The RAD price and daily equivalent (DAP rate) are permanently locked in by your Accommodation Agreement on the date of your admission. A provider cannot increase your agreed room price during your stay, even if they raise prices for future incoming residents.
Do I have to pay the RAD before moving into a nursing home?
No. Under the Aged Care Act, you have 28 days post-entry to decide how you wish to pay for accommodation (100% RAD lump sum, 100% DAP daily payment, or a combination). During those initial 28 days, you simply pay the daily DAP rate.
Is my RAD deposit safe if the nursing home provider goes bankrupt?
Yes. The Australian Government operates the Accommodation Payment Guarantee Scheme. If an approved provider becomes insolvent, the Commonwealth repays the resident's deposit balance directly to the resident or their estate.
How does renting out the family home affect aged care fees?
Net rental income received from the family home is counted under the income test for your aged care contributions and the Age Pension. However, the capital value of the home itself remains capped at the standard limit ($214,884 in 2026) for the assets test, rather than its full market value.
Sources: Schedule of Fees and Charges for Residential Care (Department of Health, Disability and Ageing, 20 March 2026); My Aged Care; Services Australia.
Last reviewed: 2 August 2026.
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