Planning aged care can bring practical and emotional questions at the same time. You may be helping a parent stay safely at home, comparing residential care options or trying to understand what their savings and family home mean for the costs.
Aged care financial advice can help you compare options, understand the financial trade-offs and avoid rushing into decisions that are difficult to reverse. This guide explains the main types of care and costs in Australia, and the steps families can take to plan ahead.
Aged care rules and fees change. The information below is general in nature; check current details with My Aged Care and Services Australia before making decisions.
Start with the type of care needed
Care needs, preferences and finances all matter. The right option is not always the one with the lowest immediate cost.
Support at home
If your parent wants to remain at home, government-funded support may help with services such as personal care, nursing, cleaning, meals or transport. The Support at Home program replaced Home Care Packages on 1 November 2025. The services available and the contribution a person pays depend on their assessment and financial circumstances.
Ask what services are included, how often they can be provided, what contributions apply and whether extra private services are needed. Check My Aged Care’s information on Support at Home costs and contributions.
Residential aged care
Residential care provides accommodation and support in an aged care home. It may become appropriate when a person’s needs can no longer be safely met at home, or when they prefer a residential setting.
Before accepting a place, request the provider’s current room price, a written fee estimate and the payment options. Ask how long the quoted price is available and what could change after your parent enters. People who entered care before 1 November 2025 may remain under different fee arrangements from people entering under the newer rules. Confirm which rules apply to your parent.
What does aged care cost?
Costs depend on the care type, the provider, the person’s income and assets, and when they entered care. For residential care, it helps to separate daily fees from accommodation costs.
Daily fees and means-tested contributions
Residential care residents generally pay a basic daily fee towards everyday living costs, such as meals, cleaning, laundry and utilities. The rate is linked to the single Age Pension and is indexed. As at 20 September 2026, the published basic daily fee is $68.93 a day. Check the current rate when planning, as it can change.
Depending on the applicable rules and a person’s financial assessment, there may also be additional contributions towards accommodation-related living services or care. The amount is not the same for everyone. Services Australia assesses income and assets to help determine the fees or contributions payable. If requested financial information is not provided, maximum contribution rates may apply.
For a current overview, see My Aged Care’s guide to aged care home costs and fees.
Accommodation: RAD, DAP and other options
A residential aged care provider sets an accommodation price for a room. Depending on the person’s circumstances and the applicable rules, accommodation may be paid as:
- RAD (Refundable Accommodation Deposit): a lump-sum payment.
- DAP (Daily Accommodation Payment): regular daily payments instead of, or alongside, a lump sum.
- A combination: part lump sum and part daily payments.
- RAC or DAC: refundable or daily accommodation contributions that can apply where government assistance is available.
A RAD is generally refundable when the resident leaves, subject to applicable rules, deductions and timeframes. Under the rules applying to relevant residents entering from 1 November 2025, a retention amount can reduce the eventual refund. A DAP is a daily payment and is not refunded like a deposit. The amount and terms should be confirmed in writing with the provider.
There is no universal best choice. Paying more upfront may reduce daily payments, but it can also tie up money the family may want to keep available. A DAP can preserve more liquid funds, but payments can continue for as long as the person is in care. Compare the options using realistic assumptions about cash flow, investment returns, future fees and what the family wants to preserve.
How are the family home and other assets assessed?
The family home is not automatically excluded from an aged care means assessment. Its treatment can depend on factors such as who lives there, whether a protected person remains in the home, ownership arrangements and the person’s circumstances.
If your parent leaves home to enter residential care, the home may be treated differently over time for pension and aged care assessments. Renting it out or selling it can also change the financial picture: rental income may be relevant, while sale proceeds may become assessable financial assets. The outcome depends on the specific rules and facts.
This is why it is worth checking before making a major change. Selling the home, transferring ownership or gifting money can have consequences for aged care fees, pension entitlements and the family’s longer-term plans. Get advice before acting, rather than relying on a general rule of thumb.
Services Australia’s information on how your home is assessed for aged care explains some of the factors that may apply.
Can super be used to pay for aged care?
Super may be used to help fund care costs, including accommodation payments, but the right approach depends on the person’s age, super structure, income needs and means assessment.
For example, withdrawing money from super usually changes the form of an asset rather than making it disappear. Money withdrawn may become cash or another financial asset, which can still be relevant to an assessment. Paying a RAD can also affect the resident’s assessable assets under the applicable rules.
Before withdrawing super, starting or changing an income stream, or using super to pay a deposit, compare the effect on:
- Regular income and the ability to meet ongoing costs.
- Pension eligibility and aged care fees.
- Money available for emergencies or a spouse who remains at home.
- Investment, tax and estate considerations.
A family member should not assume that paying a parent’s RAD means the amount will be treated as the family member’s asset. Ask for advice based on the ownership and payment details before transferring funds.
Why planning early can help
A sudden health event can leave a family comparing rooms, gathering financial documents and making time-sensitive decisions all at once. Planning ahead gives you more time to understand your parent’s preferences, explore home support and compare providers and payment options.
A practical starting checklist:
- Talk about preferences. Ask what matters most: staying at home, proximity to family, continuity of care or keeping certain funds accessible.
- Gather the information. Make a current list of super, bank accounts, investments, property, debts and income.
- Check decision-making arrangements. Confirm who can speak with providers or manage finances, and seek legal advice about relevant documents and authority.
- Get an aged care assessment. Contact My Aged Care to understand the assessment process and available services.
- Request written estimates. Ask providers to explain daily fees, accommodation prices, payment choices and any refund terms.
- Compare whole-of-family impacts. Consider the parent’s care and cash flow, as well as a partner or family member who may still rely on the home or shared assets.
Early planning is not about predicting every future cost. It is about making fewer decisions under pressure and keeping more options open.
Bring aged care into your retirement and family plan
Aged care can affect more than one person’s finances. A parent’s care costs may interact with their retirement income, super, home and estate plans, and with the financial security of a partner or other family members. Consider those connections before committing to a payment strategy.
Advice360’s Retirement & Legacy Planning considers retirement goals and longer-term family plans. Our broader planning approach also recognises the importance of protecting the people who depend on you. A financial adviser can help you organise your questions and understand how different choices may fit into your wider plan. For legal matters, such as powers of attorney and estate documents, speak with a qualified solicitor.
We're more than happy to have a complimentary chat about aged care planning. Just reach out to our team and we'll find a time that suits you.
Important information: This article provides general information only and does not take your circumstances into account. It is not personal financial, tax or legal advice. Aged care costs, assessment rules and government support can change, and different arrangements may apply depending on when care began. Check current information at My Aged Care and Services Australia, and consider qualified professional advice before making decisions.
