Aged care: Your guide to care services, costs and eligibility

There are three main categories of government subsidised aged care services: 

• in-home care
• residential aged care 
• short-term support. 

The type of aged care service that is right for you depends on several factors including your care needs, accommodation, access to assistance, and financial situation. 

In-home care

Most people receiving aged care services receive them in their home, rather than a residential aged care facility. There are several benefits of in-home care services, including avoiding the stress of leaving the family home and keeping links with your local community.

In-home aged care provides various types of support to help you stay independent for as long as possible. Support services can help you stay connected, socially active, healthy and comfortable in your own home.

Government subsidised in-home care

The Australian Government has two programs that provide subsidised in-home care:

•  Commonwealth Home Support Programme for entry-level support 

•  Home Care Packages Program for more complex needs.   

What is the Commonwealth Home Support Programme?

This program provides you with ongoing help with basic household tasks in your home. It provides an entry level of support if you’re having trouble with everyday tasks and think a little support could improve your health and wellbeing. 

The waiting time before services can start depends on the availability of providers in your area. 

What it the Home Care Packages Program?

This program provides wide-ranging support if you’re an older person with complex care needs beyond what the Commonwealth Home Support Programme can provide.

There are four levels of Home Care Packages you may be eligible for – from level 1 for basic care needs to level 4 for high care needs. 

Under a Home Care Package, a range of services are provided that are directly linked to your care needs. 

Residential aged care

If you can no longer live safely and independently in your home, you may need to move to a residential aged care home (also known as a retirement home). 

Aged care homes provide support services for your health, wellbeing, social life, and safety. They also help with everyday tasks, living arrangements, and personal care.

What services do aged care homes provide?

•  Accommodation – a room that includes essential furniture such as a bed, wardrobe/drawers and in some cases a television. Some aged care providers allow furniture such as a favourite chair to be brought from home. 

•  Day-to-day needs – including meals, laundry, toiletries, cleaning and social activities. 

•  Personal care and support services – these include mobility aids, nursing and therapy services, help with bathing and going to the toilet, and arranging healthcare and medications. 

Many care homes offer extra or additional services such as hairdressing, streaming services, or wider menu choices. 

Short-term care

Short-term aged care support can help with day-to-day tasks aimed at keeping or restoring your independence for periods of a few days to a few months. Short-term support is provided after an assessment to determine your eligibility. Its services are available not only as in-home care but also to residents of residential care homes, or out in the community.

There are three types of short-term care:

•  Restorative care: Services include helping with medical needs, lifestyle support, mobility and other aids, and transport.

•  Transition care: Helps people recover after being in hospital to regain their confidence and independence sooner.

•  Respite care: Designed to give you or your carer a break. This includes socialising with others at a day centre, support at your own home, or at aged care homes.

Aged care services are provided by a variety of government, for-profit and not-for-profit providers. Most of the providers of in-home care, residential aged care, and short-term care are not-for-profit organisations. 

All providers of aged care services must be an approved provider, meaning an organisation that has been approved by the Aged Care Quality and Safety Commission to deliver Australian Government subsidised aged care services.

Approved providers must comply with all the categories of Quality Standards:

• consumer dignity and choice
• ongoing assessment and planning with consumers
• personal and clinical care
• services and supports for daily living 
• the provider’s service environment
• feedback and complaints
• human resources
• organisational governance.

How much you have to pay for aged care depends on:

• the type of aged care services you need – whether in-home care, residential aged care, or short-term care
• the aged care provider you choose
• your financial situation. 

Depending on the above, you may need to undergo an assessment of your income and/or assets (called means testing). Although the government subsidises aged care in Australia, you’re expected to contribute to the cost of your care if you can afford to. 

If you’re accessing a Home Care Package, your assessable income will be looked at by Services Australia to determine the amount of any income-tested fees you may have to pay. Your assessable income includes various sources including the government's estimate of your income from financial investments (called ‘deemed income’) and social security payments such as the Age Pension.¹

If you’re entering a residential aged care home, some of the fees you’ll be asked to pay are determined by your means-tested amount. This is calculated by Services Australia and includes both your assessable income and assets. 

Your means-tested amount includes your financial and other assets including (but not limited to) bank accounts, shares, term deposits, super (if you are over age pension age), investment properties, household contents, and personal effects. 

Your home is excluded from aged care means testing if it’s occupied by your partner. It may also be excluded if it’s occupied by a ‘protected person’ such as your carer or family member who meets specific criteria. If your home is not excluded, the government caps the amount that is included in the means tested amount calculation. As at 20 September 2023 the capped value is $197,735.20. 

To see if you’re eligible for subsidised aged care you’ll need to be assessed through the government’s MyAgedCare service. 

To qualify for an assessment, you generally need to be aged 65 or older (50 or older for Aboriginal or Torres Strait Islander people) and answer some questions online or over the phone about how much help you need with everyday tasks. 

Based on the information you provide you may be referred for an assessment to better understand your support needs. Assessments are generally done in person, at your own home. 

There are two types of assessments that work out your care needs and what types of care you may be eligible for:

• A home support assessment with a Regional Assessment Service if you are likely to need low-level support through the Commonwealth Home Support Programme.
• A comprehensive assessment with an Aged Care Assessment Team if you’re likely to need Home Care Packages, short-term care, or an aged care home.

Under the Commonwealth Home Support Programme

Under this program, aged care providers receive funds from the federal government to keep costs affordable. There is no means test for this program but you are expected to make a contribution, agreed with your provider, for as long as you receive services. 

Under the Home Care Packages Program

As with the Commonwealth Home Support Programme, the government covers the total cost, but you’re expected to contribute if you can. You may have to pay:

• a basic daily fee, or
• a basic daily fee and an income tested care fee
• any fees for additional services not covered in your Home Care Package.

From 20 September 2023, the basic daily fee was a maximum of $12.53 and the maximum income-tested daily care fee is $34.84. However most people don’t pay the maximum income tested daily care fee. For example, if you receive the maximum Age Pension this fee isn’t charged.

If you do have to pay an income tested daily care fee, annual and lifetime limits apply on how much you’ll pay.

There are four types of costs you may be required to pay for residential aged care:

• basic daily fees
• means-tested care fees
• accommodation costs
• additional or extra service fees. 

Basic daily fees

Every resident of a residential aged care home can be asked to pay a basic daily fee to help cover the costs of daily living. This fee is set at 85% of the maximum daily amount of the single basic Age Pension ($60.86 per day as at 20 September 2023). 

Means-tested care fees

In addition to the basic daily fee, some residents may also be asked to pay a means-tested care fee. 

This fee is based on your means-tested amount as calculated by Services Australia, and includes both your assessable income and assets. If your financial resources are limited you won’t have to pay the means tested care fee.

The maximum means tested care fee is $32,718.57 per year or $78,524.69 over your lifetime (all figures as at 20 September 2023). 

Accommodation costs

When entering an aged care home, you’ll need to agree on a room price. Whether or not you need to pay the agreed amount will depend on your means assessment. 

• If you’re not eligible for government assistance with your accommodation costs (not ‘low means’), you’ll pay the agreed room price as an accommodation payment.
• If you’re eligible for government assistance (‘low means’), the government will pay some or all of your accommodation costs to your provider. However, you may be asked to pay an accommodation contribution based on your means assessment. 

As a general guide, if you’re a single person:

• If you have income below $32,331.00 and assets below $58,500, the Australian Government will pay your accommodation costs (rates as at 20 September 2023).
• If you have income above $76,096.50 or assets above $197,735.20, you will need to pay for the full cost of your accommodation as an accommodation payment (as at 20 September 2023).

If you need to pay an accommodation payment, you can pay either as a refundable accommodation deposit (RAD), or as daily rental payments, or by a combination of the two. 

The average RAD is approximately $470,000, but prices can vary greatly depending on the facility you choose.  

If you decide to pay your accommodation payment as a RAD, it is fully refundable when you leave the aged care home or is returned to your estate if you die. 

Additional or extra service fees

Additional or extra service fees may apply for services beyond the minimum care requirements and the upgraded hotel-style services that are offered by some providers. 

If you’re receiving short-term aged care in a residential aged care home, in most cases only the basic daily care fee is payable ($60.86 per day as at 20 September 2023). In some cases, a booking fee is also charged.