Aged Care Costs 2026: What You'll Pay

Aged care in Australia comes in several flavours, and the costs vary wildly depending on what level of care you need.

Commonwealth Home Support Programme (CHSP): This is the entry level — help with things like cleaning, transport, meals, and personal care while you stay at home. Fees are modest: typically $5–$15 per service. Most people on the Age Pension pay very little for CHSP services.

Home Care Packages (Levels 1–4): For more substantial care needs while living at home. Annual package values in 2026 range from about $10,800/year (Level 1) for basic needs up to $62,800/year (Level 4) for high-level care. You'll pay a basic daily fee of around $13.41/day plus potentially an income-tested fee if your income is above the threshold.

Residential aged care: Moving into a nursing home or aged care facility. This is where the big costs are. You'll pay a combination of daily fees, accommodation costs, and potentially means-tested fees that can total $150–$450+ per day depending on your financial situation and the facility you choose.

Our aged care fees calculator helps you estimate your costs across all types of care based on your income and assets.

Residential care has multiple fee components, and it's important to understand each one:

Basic daily fee: Everyone pays this, regardless of means. In 2026, it's $63.57 per day ($1,907/month). It's set at 85% of the single Age Pension and covers daily living costs — meals, laundry, utilities.

Means-tested care fee: This is the variable one. If your income and assets are above certain thresholds, you'll pay an additional daily fee calculated by Services Australia. For 2026, the annual cap on means-tested fees is $33,309.20, and the lifetime cap is $79,942.08. Once you hit the lifetime cap, you don't pay any more means-tested fees — ever.

Accommodation costs: This is the big one. Depending on your means assessment, you'll either pay nothing (if you're a "low means" resident), a partial contribution, or the full accommodation price set by the facility. Accommodation prices in major cities typically range from $300,000 to $1,000,000+. You can pay this as a lump sum (Refundable Accommodation Deposit — RAD) or as a daily payment (Daily Accommodation Payment — DAP), or a combination of both.

Extra or additional services: Some facilities charge extra for things like premium rooms, foxtel, hairdressing, or enhanced dining. These are negotiated directly with the facility.

Home care packages are government-subsidised, so you don't pay the full cost — but you do contribute. Here's how the fees stack up in 2026:

Basic daily fee: $13.41/day ($402/month). Everyone on a home care package pays this. It's 17.5% of the single basic Age Pension.

Income-tested care fee: If your income is above $33,628/year (singles) or $51,980/year combined (couples), you'll pay an additional fee. The maximum income-tested fee is capped at $17,044.66 per year, and the lifetime cap is $79,942.08 (same as residential care).

The package value — the amount the government pays for your care — ranges from:

• Level 1: ~$10,800/year (basic care needs)
• Level 2: ~$19,000/year (low-level care)
• Level 3: ~$41,300/year (intermediate care)
• Level 4: ~$62,800/year (high-level care)

Your home care provider will take a care management fee and package management fee from the package value — typically 20–35% combined. That means on a Level 2 package worth $19,000, you might only get $12,000–$15,000 worth of actual services. Shop around, because provider fees vary significantly.

When you move into residential aged care, the accommodation cost is usually the biggest financial decision. You have three options:

RAD (Refundable Accommodation Deposit): A lump sum paid upfront. The key advantage is that it's fully refundable — when you leave the facility (or pass away), the full amount is returned to you or your estate. Think of it like a bond. If the accommodation price is $500,000 and you pay the full RAD, you owe nothing further for accommodation. Your RAD is guaranteed by the government.

DAP (Daily Accommodation Payment): Instead of a lump sum, you pay a daily amount. The DAP is calculated using a government-set interest rate (currently 8.36% per annum) applied to the accommodation price. So a $500,000 room would cost $114.52/day ($3,436/month) as a DAP. This adds up fast — over 3 years, you'd pay $125,000 in non-refundable DAP payments.

Combination: You can pay part RAD and part DAP. For example, pay $200,000 as a RAD and the remaining $300,000 as DAP ($68.71/day). This reduces your daily costs while preserving some capital.

The right choice depends on your financial situation. If you have the funds (perhaps from selling the family home), paying the full RAD is usually the better financial move because you don't lose any money to daily payments. But if your assets are tied up in illiquid investments, DAP gives you time. Get advice from a financial counsellor — Services Australia's Financial Information Service (132 300) offers free guidance.

There are legitimate strategies to reduce what you pay for aged care — but they need to be implemented before the means assessment, ideally with professional advice.

Gifting: You can gift up to $10,000 per year (and $30,000 over 5 years) without it affecting your means test. Amounts above this are still counted as assets for 5 years. Gifting needs to be done well in advance — strategic last-minute gifting is assessable.

Funeral bonds: Up to $15,250 (2026) held in a funeral bond is exempt from the means test. It's a small saving, but every bit helps.

Home retention: If your partner still lives in the family home, it's exempt from the assets test. Even if you're single, your home is treated as an asset for aged care purposes but capped at $201,231.20 — so a $1 million home is only counted at $201,231. However, if you rent the home out, the rental income is assessable.

Spend on the home: Renovations, repairs, or paying off a mortgage reduces your assessable assets since the home is capped. This is a common and effective strategy.

Choose your provider carefully: Accommodation prices vary hugely between facilities. A room in outer Melbourne might have a RAD of $350,000, while a similar room in inner Sydney could be $800,000. The care quality often has little to do with the price.

Use our aged care fees calculator to model different scenarios and see how changes to your assets and income affect your fees. Also check your Age Pension entitlement — entering aged care can change your pension rate.