Residential Aged Care Fees Explained: What a Nursing Home Costs in 2026

The four costs

If you enter permanent residential aged care on or after 1 November 2025, you are on the fee arrangements introduced by the Aged Care Act 2024. There are four possible costs. Two are means tested and capped; one is paid by everyone; one is the room itself.

Cost	Who pays	Maximum (1 July 2026)
Basic daily fee	Everyone	$66.80 a day
Hotelling contribution	Means tested	$22.15 a day
Non-clinical care contribution	Means tested	$107.32 a day, $137,917 lifetime, 4 years
Accommodation	Means tested: government-supported, or the agreed room price	Room price up to $789,686 without approval

Clinical care - nursing, allied health, medication management - is fully government funded for every resident. That is a deliberate change from the old means tested care fee, which included clinical costs. You can estimate all four costs for your situation with the aged care fees calculator.

1. Basic daily fee

Set at 85% of the single basic age pension, currently $66.80 a day (about $24,382 a year). It covers meals, laundry, cleaning and utilities at the standard level. It is the same for everyone regardless of means, and it changes with pension indexation on 20 March and 20 September. For full pensioners with low assets, it is the only fee.

2. Hotelling contribution

The government pays aged care homes a hotelling supplement on top of the basic daily fee to cover the true cost of daily living services. Under the new arrangements that supplement is means tested: residents who can afford it pay some or all of it as a hotelling contribution, capped at $22.15 a day, and the government pays the rest. There is no annual or lifetime cap because the amount is small, and it continues for as long as you are in care.

Roughly speaking, a single person starts paying it once their income exceeds about $88,156 a year, or their assessable assets exceed about $214,884, or a combination. The means test guide has the formula.

3. Non-clinical care contribution

This replaced the means tested care fee. It is a contribution towards non-clinical care - help with bathing, dressing, mobility, and lifestyle and social activities - and only applies to people already paying the full hotelling contribution. It is capped at $107.32 a day, and it stops at whichever comes first of:

• a lifetime cap of $137,917 (indexed), which includes any contributions you paid under Support at Home or income-tested care fees under a Home Care Package; or
• four years of paying it in residential care (the days do not have to be consecutive).

Once you reach either cap, the government pays your non-clinical care in full. Most people who pay the maximum reach the four-year limit before the dollar cap: $107.32 a day is about $39,172 a year, so the dollar cap arrives in roughly 3.5 years.

4. Accommodation

Your means assessment decides which of two situations you are in:

• Low-means resident (means tested amount below the maximum accommodation supplement of $72.30 a day): the government pays some or all of your accommodation. You may pay a daily accommodation contribution, and you cannot be asked to pay the published room price.
• Accommodation payment resident: you pay the room price you agree with the home, as a refundable accommodation deposit (RAD), a daily accommodation payment (DAP), or a combination. The DAP is the unpaid amount multiplied by the MPIR (8.43% for 1 July to 30 September 2026) divided by 365.

Two rules are new for people entering from 1 November 2025: providers retain 2% of your RAD balance each year for up to five years (so a $500,000 RAD loses up to $50,000 over five years), and DAPs are indexed twice a year rather than fixed. Homes can charge up to $789,686 for a room without approval from the pricing authority; above that needs approval. RAD vs DAP works through the choice.

Higher everyday living fee

Homes can offer optional extras - a larger room, a premium menu, hairdressing, streaming, outings - for a higher everyday living fee. It is set by the provider, must be itemised, and you must agree to it in writing. You can decline it, and a home cannot make it a condition of entry. It is not means tested and not capped, so read what is included before signing.

Three worked examples

Using the 1 July 2026 rates. All three are single people with no protected person in the home.

	Full pensioner, renting	Part pensioner, owns home	Self-funded, owns home
Annual income	$32,000	$45,000	$80,000
Assets (not home)	$15,000	$150,000	$600,000
Home value	None	$700,000 (counts as $214,884)	$1,200,000 (counts as $214,884)
Means status	Low means	Pays room price	Pays room price
Basic daily fee	$66.80	$66.80	$66.80
Hotelling contribution	$0	$22.15	$22.15
Non-clinical care contribution	$0	About $17	$107.32
Accommodation ($450,000 room as DAP)	Government supported	$103.93	$103.93
Approx. total per day	$66.80	About $209.88	$300.20

The part pensioner's non-clinical contribution depends on exactly where their means tested amount lands; run your own figures through the calculator. The self-funded example shows the ceiling for most people: roughly $109,574 a year, of which about $39,172 stops after four years.

If you were already in the system

Residents who entered permanent care before 1 November 2025 stay on the 2014 fee arrangements: basic daily fee plus a means tested care fee (up to $372.03 a day, capped at $35,910 a year and $86,185 lifetime), unless they opt in to the new rules. People who had a Home Care Package, or were approved and on the waiting list, on 12 September 2024 are covered by the no worse off principle and also stay on the 2014 arrangements when they later enter residential care. If that is you, the calculator's figures will overstate your fees; ask Services Australia for a fee advice letter.

Getting your actual fees

1. Get a means assessment from Services Australia (form SA457, or SA485 if you are on a pension and own a home). Pensioners who do not own a home usually need no form.
2. Receive a fee advice letter stating your contributions and whether you pay the room price. It is valid for 120 days before entry.
3. Agree a room price with the home. Published prices are maximums; you can negotiate down.
4. Choose RAD, DAP or a mix after you move in. You cannot be made to choose before entry.

Comparing homes on price is the part families find hardest, because published room prices, higher everyday living fees and availability all vary. The AusCareGuide aged care directory lists every government-approved home by suburb, and our free placement help service compares them for you. For in-home care costs instead, see Support at Home costs and contributions.

Figures are from the Schedule of Fees and Charges for Residential Care from 1 July 2026 and the Department of Health, Disability and Ageing fee scenarios, current as at August 2026. Fees, thresholds and caps are indexed on 20 March and 20 September and the MPIR changes quarterly, so check the current schedule before making decisions. This guide is general information, not financial advice.