The four layers of an aged care bill
Australian residential aged care fees look complicated because four different charges with different rules are printed on one invoice. Untangle them once and every quote you receive afterwards becomes readable. The four layers are:
- The basic daily fee — paid by every resident, set at a fixed percentage (85%) of the single basic Age Pension, adjusted whenever the pension changes in March and September. Nobody negotiates this and no assessment affects it.
- Means-tested contributions to care — what you contribute towards the cost of your own care, based on the means assessment described below. Under the framework in force since 1 November 2025, this appears as contributions towards non-clinical care costs; clinical care is fully government-funded for new residents, which is a genuine improvement over the old means-tested care fee for many families. Contributions are capped both per day and by a lifetime limit, after which they stop.
- Accommodation — the room, paid as a refundable accommodation deposit (RAD), a daily accommodation payment (DAP) or a combination. Residents with low means do not pay a market room price; the government pays or tops up the accommodation instead (the "supported resident" route).
- Extra and additional services — optional charges for things beyond the standard offer: a premium room package, hairdressing, wine with dinner. Read this schedule line by line; it is the layer with the most pricing creativity.
What the means assessment looks at
The assessment, run by Services Australia (or DVA for veterans), combines income and assets into a single means figure that determines two things: how much you contribute to care, and whether the government helps with accommodation.
Income
Counted income includes the Age Pension itself, superannuation income streams, rent, dividends and deemed income on financial assets. Deeming applies its usual fiction: financial assets are assumed to earn set rates regardless of what they actually earn.
Assets
Counted assets include bank accounts, shares, investment property, superannuation balances and — the big one — a refundable accommodation deposit already paid. Personal effects and prepaid funeral arrangements are treated concessionally.
The family home — the rule everyone asks about
The home is exempt entirely while a "protected person" lives in it: a spouse or partner, a carer who has lived there for at least two years and is eligible for an income-support payment, or a close family member who has lived there for at least five years and is eligible for income support. If no protected person lives there, the home is counted — but only up to a capped amount, not at market value. A $2 million house and an $800,000 house are counted at the same capped figure. The cap is indexed; check the current value on My Aged Care before making any decision about selling.
Supported, partially supported, or paying the market price
The means figure sorts residents into three broad situations. Below a lower threshold, you are a fully supported resident: the government pays your accommodation and your care contributions are nil or minimal — homes must keep a proportion of places for supported residents, so do not let anyone tell you low means mean no options. Between the thresholds, you are partially supported: you pay an accommodation contribution (not the advertised room price) and moderate care contributions. Above the upper threshold, you pay the published room price (RAD/DAP) and the capped care contributions.
Two protections apply to everyone. Contributions are capped per day, and a lifetime cap stops care contributions permanently once total payments reach it — after that, the government carries the care cost even if you remain in care for years. Time spent contributing under a Support at Home package at home now counts towards the same lifetime cap, which matters for the many families who use home care first.
Should you even lodge the means assessment?
Yes, and early. The form (SA457 or its digital equivalent) can be lodged before you have chosen a home, and the result letter tells you exactly which of the three situations applies — which changes which rooms and homes are realistic. Families who skip the assessment are treated as "means not disclosed" and charged as if they were at the top of the scale. The only households that sensibly skip it are those certain they are full market-price payers and comfortable being charged accordingly.
A worked example (illustrative figures)
Maria, 86, widowed, owns her home outright; her daughter has lived elsewhere for years. She has $180,000 in savings and a part Age Pension. Because no protected person lives in the house, it is counted at the capped amount. Her means put her above the accommodation-support thresholds, so she will pay a negotiated room price — say $450,000 as RAD, funded by selling the house — plus the basic daily fee, plus daily non-clinical care contributions that will stop once she reaches the lifetime cap. Her clinical care is government-funded. Once the house sells and the RAD is paid, the RAD is exempt from the pension assets test, and her pension is re-assessed — often upwards. The order of operations (assessment → home choice → price negotiation → sale → RAD) is exactly the sequence that keeps each step from spoiling the next.
Practical rules of thumb
- Lodge the means assessment before touring homes. It costs nothing and turns guesswork into a letter.
- Never sell the home before understanding the protected-person rules. An avoidable sale can convert an exempt asset into a counted one.
- Ask every home for a written fee estimate based on your assessment letter — they can and should produce one.
- Watch the extra-services schedule. It is the only layer a home fully controls; it is also the only layer you can usually opt out of.
- Get advice accredited in aged care for any decision touching the house, the pension or a RAD. The interactions are where the money is won or lost.
Where Curalune fits in
Fees only become concrete once you have real homes to compare. Curalune Care Help prepares a shortlist of 3–5 aged care homes around your area matched to your situation — including published room prices — with contacts and a ready-to-send enquiry, so the means-assessment letter meets an actual list of options. Fees, means outcomes and availability are always confirmed by Services Australia, My Aged Care and the home itself.