Aged Care Cost in Australia 2026 — Home Care vs Residential
Aged care costs in Australia vary enormously — from a few thousand dollars a year for a basic home care package to well over $100,000 annually for full residential nursing home care. For most families, the first conversation about aged care happens in a moment of crisis, and the complexity of the system can feel overwhelming when you're already stretched thin.
There are two broad pathways: home care, where your loved one stays at home and receives government-funded support services, and residential aged care, where they move into a nursing home or aged care facility. Each has its own fee structure, means-testing rules, and government subsidies — and since November 2025, the home care side of the system has been completely overhauled.
This guide breaks down exactly what aged care costs in Australia in 2026, how the new Support at Home programme works, how residential fees are calculated, and what families can do to prepare financially. Use the free aged care cost calculator to get an indicative estimate for your situation.
Last updated: May 2026.
Key takeaways
- Residential aged care basic daily fee: approximately $66.80/day ($24,382/year) for all residents — this is the floor, not the ceiling.
- Support at Home (new from November 2025): 8 funding levels from ~$10,732 to ~$78,106/year, replacing the old 4-level Home Care Package system.
- RAD (Refundable Accommodation Deposit): a lump-sum bond averaging $450,000–$600,000 in major cities, refunded when you leave — but from November 2025, providers may retain up to 2% per year.
- Means testing applies to both pathways: your income and assets determine how much government support you receive and how much you pay yourself.
- My Aged Care (myagedcare.gov.au) is the mandatory entry point: all assessments, applications, and approvals run through this portal.
Table of contents
- Home care vs residential aged care — quick comparison
- Support at Home programme — the new system (from November 2025)
- Old Home Care Packages — what was Levels 1–4?
- Residential aged care costs breakdown
- RAD vs DAP explained — with a worked example
- How the means test works
- How to get assessed — My Aged Care portal
- FAQs
Home care vs residential aged care — quick comparison
| Feature | Home Care (Support at Home) | Residential Aged Care |
|---|---|---|
| Where you live | Your own home | Aged care facility/nursing home |
| Annual government funding | ~$10,732–$78,106 (8 levels) | Subsidises care costs above basic daily fee |
| Basic daily fee | No equivalent — fee-for-service per visit | ~$66.80/day (~$24,382/year) |
| Accommodation cost | You pay your own mortgage/rent | RAD (lump sum) or DAP (daily payment) |
| Means-tested fees | Yes — on personal care and everyday living | Yes — means-tested care fee up to $35,910/year |
| Clinical care (nursing, allied health) | Free — fully government-funded | Included in care fees |
| Entry point | My Aged Care assessment (RAS) | My Aged Care assessment (ACAT) |
| Waitlist | Yes — can be months to over a year | Yes — varies by facility and location |
These are indicative figures. Your actual aged care fees will be determined by a government assessment and means test. Consult a financial adviser for personalised advice.
Support at Home programme — the new system (from November 2025)
Australia's aged care home support system changed significantly on 1 November 2025. The old Home Care Packages (HCP) programme — with its four levels and annual lump-sum budgets — was replaced by the Support at Home programme.
The 8 funding classifications
Under Support at Home, eligible Australians are assessed and assigned one of eight funding classifications, each with a quarterly budget:
| Classification | Quarterly budget | Annual equivalent |
|---|---|---|
| 1 | ~$2,683 | ~$10,732 |
| 2 | ~$4,009 | ~$16,036 |
| 3 | ~$5,492 | ~$21,967 |
| 4 | ~$7,424 | ~$29,696 |
| 5 | ~$9,924 | ~$39,698 |
| 6 | ~$12,028 | ~$48,114 |
| 7 | ~$14,537 | ~$58,148 |
| 8 | ~$19,527 | ~$78,106 |
Source: Department of Health and Aged Care / Homage Australia, April 2026. Figures are approximate and subject to indexation.
What changed from the old system
The reform isn't just a rebrand. Key structural changes include:
- Quarterly budgets instead of annual: unspent funds roll over, but only up to $1,000 or 10% of the quarterly budget — the old system allowed indefinite accumulation.
- Care management capped at 10%: providers used to charge up to 35% of a package for administration. That's now capped at 10%.
- Clinical care is free: nursing visits, allied health, wound care, and other clinical services are fully government-funded for eligible participants — no means test, no out-of-pocket cost.
- Personal care and everyday living: still means-tested, so what you pay depends on your income and assets.
- Pricing caps from 1 July 2026: the government mandates maximum prices for all Support at Home services, ending the era of providers setting their own rates.
- No entry or exit fees: these are now prohibited.
If your loved one was already on a Home Care Package before November 2025, they've been automatically transitioned to Support at Home. Their transitional quarterly budget was set to match their old package level.
At Leadkit, we work with a wide range of disability and aged care service providers across Australia. One pattern that comes up consistently: families are caught off-guard by the gap between the government funding level and the actual cost of the services they want — particularly for higher-frequency personal care. The quarterly budget often needs to be supplemented with private payments for anything beyond essential support.
Old Home Care Packages — what was Levels 1–4?
If you're researching aged care costs and come across references to Home Care Package levels, these referred to the previous four-tier system that ran until October 2025. For context:
| HCP Level | Annual government funding | Suitable for |
|---|---|---|
| Level 1 | ~$10,271 | Basic support needs |
| Level 2 | ~$27,627 | Low-level care needs |
| Level 3 | ~$42,055 | Intermediate care needs |
| Level 4 | ~$58,078 | High-level care needs |
These levels no longer apply to new entrants — anyone assessed from November 2025 onwards enters the 8-level Support at Home system. However, many services and financial advisers still use HCP language when describing the system, so it's worth understanding the historical context.
Residential aged care costs breakdown
Moving into a residential aged care facility (nursing home) involves multiple separate fees. Understanding which is which can prevent nasty surprises.
1. Basic daily fee
Every permanent resident pays the basic daily fee, which is set at 85% of the single Age Pension rate. As of early 2026, this is approximately $66.80 per day ($24,382 per year).
This fee applies regardless of your income or assets — there's no means test for the basic daily fee. It covers day-to-day living costs: meals, laundry, heating, and basic services.
2. Means-tested care fee
On top of the basic daily fee, some residents pay a means-tested care fee — an additional contribution toward the cost of their personal and clinical care. The amount is calculated by Services Australia based on your specific income and assets.
- Daily range: $0 to $370.39/day (2026 figures)
- Annual cap: $35,910.43/year
- Lifetime cap: $86,185.23 (for most residents — higher lifetime caps apply for new entrants from November 2025 under the combined aged care system)
If you've paid the annual or lifetime cap, the means-tested care fee stops.
3. Accommodation costs
Accommodation is the most complex — and often largest — cost in residential aged care. There are two options (see RAD vs DAP section below):
- RAD (Refundable Accommodation Deposit) — a lump sum, like a bond
- DAP (Daily Accommodation Payment) — a daily non-refundable fee
- Combination — pay part as RAD, part as DAP
Accommodation costs are also means-tested. If your income is below $35,313.20 and assets below $64,500, the government covers your accommodation costs entirely.
These figures are indexed on 20 March and 20 September each year. Source: Services Australia, 2026.
RAD vs DAP explained — with a worked example
RAD (Refundable Accommodation Deposit) and DAP (Daily Accommodation Payment) are the two ways you can pay for accommodation in residential aged care. Every facility sets its own accommodation price — subject to a government-approved maximum — and you choose how to pay it.
RAD — the lump sum option
A RAD is like a bond: you pay a large lump sum upfront, and it's refunded (minus any agreed retention amounts) when you leave the facility or pass away.
- National average RAD: approximately $450,000–$570,000 (2026 figures vary by source and location)
- City facilities: $500,000–$750,000+ in Sydney, Melbourne, Brisbane
- Maximum RAD without government approval: $758,627
- From November 2025: providers can retain up to 2% of the RAD per year (maximum 10% over five years)
Because the RAD is largely refundable, many families treat it as a deferred payment rather than a true cost — though the retention amount and opportunity cost of tying up capital are real considerations.
DAP — the daily payment option
A DAP is the non-refundable daily alternative to the RAD. It's calculated as the interest on the RAD amount, using the Maximum Permissible Interest Rate (MPIR) — currently 7.96% per annum (April 2026).
Worked example:
A facility charges a RAD of $500,000.
If paying as DAP only: $500,000 × 7.96% ÷ 365 = $109.04/day (~$39,800/year)
If paying a partial RAD of $200,000: Remaining unpaid RAD = $300,000 DAP on unpaid portion = $300,000 × 7.96% ÷ 365 = $65.42/day (~$23,878/year) Plus: $200,000 RAD paid upfront (refundable, minus retention)
The right choice between RAD and DAP depends heavily on your financial situation — whether you have liquid assets, the opportunity cost of a lump sum, and how long your loved one is likely to remain in care. An aged care financial adviser or accredited adviser through the Aged Care Quality and Safety Commission can help model this.
For a quick indicative estimate, use the aged care calculators on Leadkit.
How the means test works
Both Support at Home and residential aged care use a means assessment (income + assets) to determine how much you contribute to your care costs. The assessment is conducted by Services Australia.
What's assessed
| Category | What counts |
|---|---|
| Income | Age Pension, superannuation drawdowns, employment income, rental income, financial investment returns |
| Assets | Cash, shares, investment properties, superannuation balance (if over pension age) |
| Exempt assets | Your principal home (partially exempt for residential aged care — 2-year grace period), pre-paid funerals |
How it affects your fees
Residential aged care:
- Full accommodation costs covered if income < $35,313.20/year and assets < $64,500
- Partial accommodation subsidy for incomes/assets between the threshold and the maximum
- Full means-tested care fee (up to $35,910/year) applies once income exceeds ~$86,185/year or assets exceed ~$214,884
Support at Home:
- Clinical services: always free, no means test
- Personal care and everyday living: means-tested contribution rate applied; low-income participants pay little to nothing
The home is assessed differently depending on whether it's sold or retained. If a resident moves into care and the home is retained (e.g. a spouse still lives there), it's excluded from the assets test indefinitely.
The Australian Institute of Health and Welfare (AIHW) publishes detailed aged care data annually at aihw.gov.au, including average contribution rates and facility costs by state.
How to get assessed — My Aged Care portal
All roads to government-funded aged care run through My Aged Care (myagedcare.gov.au or 1800 200 422). This is the mandatory entry point — you can't access government-funded home care or residential care without going through this system.
Step-by-step process
Step 1 — Register and request an assessment Call 1800 200 422 or visit myagedcare.gov.au to register. You'll describe your current care needs and living situation.
Step 2 — Assessment
- For home care and basic community support: a RAS (Regional Assessment Service) assessment is conducted in your home, typically within a few weeks.
- For residential aged care or high-level home care: an ACAT (Aged Care Assessment Team) assessment is required. An ACAT assessor (usually a nurse, social worker, or doctor) visits in person to assess care needs. ACAT also approves entry into residential care.
Step 3 — Receive your support plan and wait for placement Once assessed and approved, you're placed on a waitlist for Support at Home funding or begin searching for an approved residential facility.
Waitlist reality: The waitlist for high-level Support at Home (Classifications 5–8) can be 6–18 months. For residential aged care, waitlists vary dramatically — some facilities have vacancies immediately; others have multi-year queues for particular room types.
Step 4 — Financial assessment by Services Australia Once you have an offer, Services Australia conducts a means assessment to determine your exact fee contribution. You'll receive a letter detailing your individual fees before you sign any agreement.
The disability and aged care calculator hub on Leadkit includes tools to help families get indicative figures before the formal assessment process.
FAQs
Q: How much does residential aged care cost per week in Australia?
A: The minimum cost is around $467/week (the basic daily fee of ~$66.80/day). Most residents pay significantly more once the means-tested care fee and accommodation costs (RAD or DAP) are factored in. A resident with modest income and assets in a mid-range city facility might pay $700–$1,200/week in total fees. High-asset residents in premium metropolitan facilities can pay considerably more. Use the aged care cost calculator for an indicative figure. These are indicative costs only — your actual fees are determined by a government means assessment.
Q: What is the difference between a RAD and a DAP in aged care?
A: A RAD (Refundable Accommodation Deposit) is a lump sum you pay upfront for your accommodation — think of it like a bond. It's largely refunded when you leave or pass away (minus any retention amount). A DAP (Daily Accommodation Payment) is the non-refundable daily alternative, calculated as the interest on the RAD amount using the government's Maximum Permissible Interest Rate (currently 7.96%). You can also pay a combination of both. The right choice depends on your liquid assets, how long you expect to be in care, and the opportunity cost of tying up capital. Services Australia's aged care fee estimator can help model both scenarios.
Q: What replaced Home Care Packages in Australia?
A: The Home Care Packages (HCP) programme was replaced by the Support at Home programme on 1 November 2025. The new system has 8 funding classifications (replacing the old 4 levels), with quarterly budgets instead of annual lump sums, a 10% cap on care management fees (down from 35%), free clinical care for all eligible participants, and government-mandated pricing caps from July 2026. Anyone already on an HCP was automatically transitioned to Support at Home with a transitional quarterly budget equivalent to their old package level.
Q: How does the aged care means test work for the family home?
A: The family home is treated differently depending on your circumstances. For residential aged care, the home is excluded from the assets test for up to two years if it was your principal residence and is now vacant (or for longer if a protected person — such as a spouse, carer, or dependent — still lives there). If the home is sold, the proceeds count as assessable assets. For Support at Home, the home is generally not assessed for accommodation purposes (you're still living there). The means test applies to your financial assets and income to determine your contribution rate for personal care and everyday living services.
Q: How long is the waiting list for a Home Care Package (Support at Home) in Australia?
A: Waitlists vary by classification level and region. For lower-level support (Classifications 1–3), waits of 3–6 months are common. For higher-level support (Classifications 5–8), waits of 6–18 months are realistic in many parts of Australia. The AIHW's aged care data consistently shows demand outstripping supply for higher-needs classifications in major cities including Sydney, Melbourne, and Brisbane. You can register with My Aged Care before your needs become urgent — earlier registration means an earlier place in the queue.
Q: Can aged care fees be tax deductible or offset by superannuation?
A: Aged care fees are generally not tax deductible for the resident or their family. However, superannuation funds (including SMSFs) can be used to pay aged care costs — including a RAD — subject to fund deed and regulatory rules. The Australian Taxation Office (ATO) publishes guidance on accessing super early due to compassionate grounds, which can include aged care costs in specific circumstances. A licensed financial adviser or accountant can help you structure payments in the most tax-effective way. This guide is informational only — consult a professional for advice specific to your situation.
Plan your aged care budget today
Aged care in Australia is expensive, complex, and increasingly means-tested. The best thing any family can do is start planning early — before a crisis forces a rushed decision.
The key numbers to keep in mind for 2026:
- Basic daily fee: ~$66.80/day ($24,382/year) for all residential aged care residents
- Support at Home range: ~$10,732–$78,106/year across 8 classifications
- RAD median in major cities: $450,000–$600,000 (largely refundable)
- Means-tested care fee max: $35,910/year annual cap
All figures are sourced from the Department of Health and Aged Care and Services Australia's published schedule of fees and charges. These are indicative costs only. Your actual aged care fees will be determined by a government assessment and means test. Consult a financial adviser for personalised advice.
Want an instant aged care cost estimate? Use the free aged care cost calculator — enter your situation and get an indicative figure in under 60 seconds, no signup required.
You may also find the NDIS plan cost calculator useful if you or a family member is accessing disability support services alongside aged care. Leadkit's full calculator library covers over 200 tools across health, finance, and trades — explore all calculators.