Aged Care Advice - Fee Negotiation - Placement Services

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Aged Care Fees and Charges Guide

This page describes the aged care fees and charges that apply in Commonwealth residential care since 1st July 2014.

The aged care fees and charges vary depending upon the personal financial situation of each individual resident.

Some fees are set by the Commonwealth and some fees are maximum amounts set by, and published by, the aged care provider and can be sometimes reduced by discussion with the aged care provider.

Types of Aged Care Fees and Charges since 1st July 2014

There are five categories of fees and charges relating to Commonwealth subsidised aged care:

  • accommodation fees (RAD, DAP, RAC, DAC)

  • basic daily care fees (BDCF) - the standard resident contribution

  • means tested care fees (MTF)

  • extra service fees (ESF)

  • asset replacement contribution fees (ARC)

Accommodation Fees

Depending on your income and assets you may be asked to pay for accommodation at the aged care home.

Some residents will have their accommodation fees met in full, or in part, by the Commonwealth, while most residents will be required to pay the accommodation fee agreed with the aged care provider.

The fee for accommodation that you may be asked to pay will be based upon your assets and income, and will be one of the following:

  • NO Accommodation fee - if your income and assets are below a threshold value (currently $46,500), the Commonwealth Government will pay your total accommodation fee.

  • Accommodation Contribution - if the Commonwealth Government considers that you can meet some of your accommodation costs, you are required to pay a contribution and the Commonwealth will pay the rest as a supplement to the aged care provider.

  • Accommodation Payment - if you assets and income are above a value, then you can pay the amount of the accommodation payment agreed with the aged care provider - the Commonwealth will not pay this amount for you.

  • The Commonwealth advises that you can negotiate the accommodation fee with the aged care provider.

  • An independent and experienced service provider like Aged Care Connect can discuss the fees with the aged care provider and obtain a better outcome for a family.

Refundable Accommodation Deposits(RAD) / Daily Accommodation Payments(DAP)

Most rooms at aged care homes have a maximum advertised Refundable Accommodation Deposit (RAD) published.

This is the maximum fee for the room that the aged care provider is allowed to request for the room, but many residents will pay less that the maximum price, based upon discussions with the aged care provider.

The RAD can be considered a bond or a "gift" from the resident that is deposited during the resident's stay and will be refunded when they are no longer a resident. The RAD is not being used to purchase any asset by the resident. The resident does not own the room. The aged care provider uses the interest received from the RAD to pay for maintenance of the building and provide a pool of capital for expansion. RAD's have been steadily increasing over the years , essentially in line with increases in real estate values.

Information about the cost of the RAD per room, including size and key features of the room can be found on the aged care provider's website and the My Aged Care website.

Mode of Payment of a Residential Care Accommodation Fee

Residents can choose to pay their accommodation fees by either:

  • A lump sum fully Refundable Accommodation Deposit (RAD)

  • An equivalent non-refundable Daily Accommodation Payment (DAP)

  • Or a combination of a partial lump sum and partial daily payment

A resident has 28 days from the date of admission to decide the mode of payment of the accommodation costs.

A RAD is fully refundable lump sum deposit - RAD is refunded in full when the resident departs the care home.

A resident has 6 months to pay the full amount of the RAD.

A DAP is the daily equivalent fee of a RAD. The DAP is calculated using the Maximum Permissbile Interest Rate (MPIR) set by the Commonwealth. The MPIR is currently 5.76% pa (as at 1st October 2016).

Accommodation payments by DAP are non refundable.

DAP will be charged on any unpaid accommodation amount until the full lump sum of the RAD is paid.

Basic Daily Care Fee / Standard Resident Contribution

The Basic Daily Care Fee (BDCF) is set by the Commonwealth and is paid by all residents - permanent or respite - regardless of income or asset level, to assist with the cost of care and living expenses.

The BDCF is 85% of the single basic aged pension and is reviewed every six months by the Department of Social Services in line with increases to the Aged Pension - on the 20th March and 20th September every year.

The BDCF is $48.44 per day (from 20th September 2016)

Means Tested Care Fee (MTF)

The Means Tested Fee (MTF) is a daily fee determined by the Commonwealth, based upon a residents income and assets, to further contribute to the care costs.

Full pensioners and ex-Prisoners of War do not pay MTF.

There are annual and lifetime caps that apply to MTF. Once these caps are reached, the Commonwealth will pay the MTF for the resident.

Some aged care homes will charge an interim MTF of around $ 50 per day for all residents, except for those residents who have an Accommodation contribution estimated to be less than $ 54.39 per day, who will be charged an interim MTF of $ 15 per day until the result of the means assessment has been received by the aged care provider.

Additional Services Fee / Extra Service Fee (ESF)

This is an additional daily fee that only applies to residents who occupy an extra service room at an aged care home.

Extra Service is a term that applies to premium accommodation and a suite of personal and lifestyle services - it does not relate to the care being provided.

ESF will vary according to the facility and the services provided.

ESF can range from $12 per day to $120 per day.

ESF can be negotiated with the aged care provider.

Usually, a resident can choose to opt out of the ESF, after discussions with the aged care provider.

Asset Replacement Contribution (ARC)

The Asset Replacement Contribution (ARC) is slowly being implemented across a number of aged care provider groups (primarily the publicly listed "for-profit" aged care providers).

The ARC is applicable to all RAD, RAD/DAP, DAP, and RAC / DAC paying residents.

The ARC is a fixed amount for all payers regardless of payment mode and some aged care providers are indexing increases by 1.5 % each 1st February and 1st August each year. For example at REGIS aged care homes the ARC is capped at 30 months from the date of admission.

Residents with Low Means / Supported Residents

A "low means" resident is eligible for a full or partial accommodation supplement from the Commonwealth.

For a low means resident the Commonwealth will contribute to the cost of their accommodation.

All residents need to complete a Means Test Assessment, which will be used to determine what a resident will pay in aged care.

If a potential resident chooses not to have a means tested assessment then maximim fees for MTF will be automatically applied.

The current rates for the fees and charges

A table of the current rates applicable can be found at .....

Need Further Information?

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About Us

The Aged Care Connect team is experienced with all aspects of residential care:

  • awareness of the latest care options
  • understanding quality residential care
  • helping with all steps of the application process.
  • negotiating the RAD accommodation fees and related charges
  • completing the Request for Combined Assets and Income Assessment
  • informing you immediately where the vacancies are as we receive the latest availability direct from the aged care providers
  • advocating on your behalf at your preferred aged care homes.
  • providing post placement assistance during the settling in period.


RAD Negotiation "Thank you for your excellent work with reducing Dad's accommodation payment. Julie and I are thrilled with your results. I hope we can use your assistance again and we will certainly pass on your name to friends going forward. " - L. Pinkham
"Thanks for your help with everything you take that burden off peoples shoulders just by knowing the ins & outs of the industry that most of us are never exposed to. To bounce off someone ‘that knows’ is more help than you realise." - Sharon Bell
"Thank you very much for your valuable support in having mum placed at our preferred aged care facility. Mum seems to have settled in well and she is certainly being well cared for now. We will certainly recommend your services to any of our friends who need assistance in placing their loved ones into an aged care facility. Kind regards." - Peter Rodini
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