Aged care costs explained
Mum or Dad needs care. Know what it will really cost before you sign.
The rules for residential aged care changed on 01/11/2025, and the fees now depend even more on your parent’s assets, income and the choices the family makes in the first few weeks. We explain the costs in plain English, including the RAD versus DAP decision, and help you structure how they’re paid.
What we see
Families usually make the aged care decision in a fortnight, under pressure, often from different cities. The money decisions deserve more care than that.
Talk to us first
Get the costs explained before you commit.
Book a 45-minute aged care session, or tell us a little about your parent and we’ll come back to you to arrange a time.
- Fee-for-service: we explain the fees for each stage before any work begins
- In Melbourne, on the Gold Coast or by video, so siblings can join from anywhere
- We liaise with Centrelink and the provider for you
- Licensed through Boston Reed Pty Ltd (AFSL 225738)
What happens next
Three steps. One clear decision.
Book a session
Tell us the situation: your parent’s assets, income, pension, the home and any quotes from providers.
We map the options
Costs, the pension and the estate under each approach, including selling, renting or keeping the home.
You decide, we implement
Forms, calls and the payment structure, handled for the family, with support if circumstances change.
The costs, in plain English
Four things your parent may pay.
Every one of these depends on your parent’s circumstances and entry date. The figures are indexed regularly, so we work them out for your situation rather than quoting averages.
Basic daily fee
Meals, cleaning, laundry and utilities. Paid by everyone and set as a share of the Age Pension.
Hotelling contribution
Everyday living costs above the basic fee. Means tested, with a daily cap.
Non-clinical care contribution
Help with things like showering and getting around. Means tested, with a lifetime cap.
Accommodation
The room itself, paid as a refundable deposit (RAD), a daily payment (DAP) or a mix. Means tested, and a small part of a RAD is now retained each year for up to five years.
What families get wrong
The mistakes we see when families go it alone.
- Selling the family home in a rush, without modelling whether keeping or renting it would leave Mum better off
- Banking the sale proceeds and only then discovering how they’re assessed for the pension and the fees
- Lodging the income and assets assessment without thinking about what’s included or when it goes in
- Defaulting to paying the full deposit, or the full daily payment, without comparing the combinations
- Relying on a friend’s experience from before 01/11/2025, when the rules were different
- Signing the provider’s agreement before anyone in the family has read it properly
None of these are unusual. They happen because families are making big financial decisions in a hurry, at an emotional time.
How we help
We do the numbers and the legwork.
We start with a 45-minute session to understand your parent’s situation, explain the rules that apply and outline the options. If you want us to go further, we prepare a written plan and handle the implementation.
- An estimate of each fee based on your parent’s actual assets and income
- Side-by-side modelling of selling, renting or keeping the home
- RAD, DAP or a combination, compared over the likely time in care
- Completing the Centrelink or DVA income and assets forms
- Liaising with Centrelink and the provider for you
- Ongoing support if circumstances change
Quick answers
Before you book.
Do we have to sell Mum’s house to pay for care?
Not necessarily. Accommodation can be paid as a lump sum, a daily payment or a mix, and the home can sometimes be kept or rented. Each choice has trade-offs we model for you. More on aged care advice.
Does the new Act apply to my parent?
It applies to people entering residential care from 01/11/2025. People already in care before then generally stay under the previous rules.
When is the best time to get advice?
Before the income and assets assessment is lodged and before anything is signed with a provider.
I hold Mum’s power of attorney. Can I deal with you on her behalf?
Yes, with the right documents in place. If they aren’t, we can introduce you to our preferred legal provider. See estate planning.
What does the first session cost?
Talk to us when you book and we’ll explain the fees for each stage before any work begins.
Care for them. Clarity for you.
A 45-minute session gives the family one shared picture of the costs and the options, before anything is signed.
General advice only, current as at October 2026. This information does not take into account your objectives, financial situation or needs, so consider whether it is appropriate for you before acting. Aged care fees, caps and thresholds are indexed and depend on individual circumstances and entry date. Legal services are provided by our preferred legal provider, not Wealth Effect Group. Wealth Effect Group (CAR 424768) and Andre Dirckze (AR 395157) are Authorised Representatives of Boston Reed Pty Ltd, ABN 89 091 004 885, AFSL 225738. Accounting and tax services are provided by our referral partner Altiora Advisory, not by Wealth Effect Group. See our important information and Financial Services Guide.