Aged Care Costs Explained: Fees, RADs, and Government Contributions

Navigating aged care can feel complex—especially when understanding the many fees, accommodation payments, and government subsidies involved. Whether you’re organising care for a parent or planning ahead for yourself, knowing how aged care costs work can help you make informed and confident decisions.

This guide breaks down the key components of aged care fees and shows how Aged Care Simplified, our fee-for-service support option, can help you navigate the entire process with ease.

1. What Are the Main Aged Care Fees?

Aged care fees are divided into several categories, covering day-to-day living, clinical support, and accommodation.

Basic Daily Fee

This fee covers everyday services such as meals, laundry, cleaning, and general living expenses.It is set by the Australian Government and applies to every aged care resident.

Means-Tested Care Fee

This additional fee helps cover clinical and personal care.It is based on your income and assets and is capped annually and over your lifetime to keep costs manageable.

2. Accommodation Costs: Understanding RADs and DAPs

Accommodation payments are often the most confusing part of entering residential aged care.

Refundable Accommodation Deposit (RAD)

A RAD is a lump-sum payment for your room in an aged care home.

• Fully refundable (less any agreed deductions)

• Not a “fee” but a bond

• Set individually by each provider

RADs can vary significantly, making comparison an important step.

Daily Accommodation Payment (DAP)

If you choose not to pay a lump sum, you can pay a daily fee instead.DAPs are calculated using the government’s MPIR (Maximum Permissible Interest Rate).

Combination Payment

Many families choose a mix of RAD and DAP to balance cash flow, assets, and long-term financial planning.

3. How Government Contributions Reduce Aged Care Costs

The Australian Government provides substantial subsidies to ensure aged care remains accessible and affordable.

Government support helps fund:

• Residential aged care services

• Home care packages

• Clinical and personal care

• Accommodation for eligible low-asset residents

Your contributions depend on a government income and assets assessment. Those with limited means may have part or all of their accommodation costs covered.

4. Financial Assessments: What You Need to Prepare

To determine your care costs, Services Australia requires:

• Income details (Age Pension, investments, super, etc.)

• Asset information (property, savings, shares)

• Supporting documents such as bank statements or tax returns

A clear and accurate assessment helps ensure you receive the maximum available government subsidy.

5. How Aged Care Simplified Helps You Navigate Aged Care Costs

At Aged Care Simplified, we specialise in helping families understand aged care fees, compare facilities, and structure costs in the most beneficial way. Our fee-for-service model is designed to remove stress and confusion during what is often an emotional and time-sensitive period.

How We Support You:

Clear explanations of fees

We break down RADs, DAPs, daily fees, and government contributions in easy-to-understand language.

Comparing aged care homes and costs

We assess and compare accommodation prices, care fees, and service inclusions to help you choose the right facility.

Guidance through income and assets assessments

We help you prepare documentation and understand how assessments impact your overall costs.

Personalised payment strategies

Whether you’re considering selling the family home, paying a RAD, or opting for a combination, we develop tailored financial pathways suited to your situation.

Reducing stress for families

We provide structure, clarity, and support so you can focus on what matters most—getting the best care for your loved one.

6. Tips for Families Planning Aged Care

To help families searching for reliable aged care advice, these insights also address common queries related to aged care fees, RAD costs, and government contributions.

Seek expert guidance early

Early planning prevents rushed decisions and helps reduce long-term costs.

Understand your financial options

Strategies like part-RAD payments or maintaining home assets can improve affordability.

Compare multiple aged care facilities

Costs vary widely—independent comparison can save thousands.

Know your rights and protections

The Aged Care Act ensures transparent fees and resident protection.

Final Thoughts

Understanding aged care costs doesn’t need to be overwhelming. With strong government support and the right guidance, you can make decisions that protect your finances and ensure high-quality care.

Aged Care Simplified is here to help you navigate every step—from understanding fees to choosing the right aged care home with confidence.