A clear guide to how the means-tested fee is worked out
If you’ve read about the different fees that can apply in an aged care home, the means-tested fee is often the one that raises the most questions. Unlike the Basic Daily Fee, which is the same for every resident, this fee depends entirely on your own financial circumstances, and working out how it applies to you can feel like the most opaque part of the whole system. This guide breaks down what the means-tested fee actually is, how it’s worked out, and what limits how much you can be asked to pay.
A note on wording before we start: the government has used several names for this contribution over the years, and three sets of rules are still running side by side. We use “means-tested fee” throughout as the umbrella term for all of them, and name the specific version wherever it matters.
For a full overview of what aged care costs in Australia, including the Basic Daily Fee and accommodation costs, see our guide to aged care costs. Every figure here is sourced from My Aged Care and the Department of Health, Disability and Ageing, and applies at a sector level, not to any specific CraigCare home.
What the means-tested fee is (and isn’t)
The means-tested fee is a contribution some residents make towards their daily care and living costs, on top of the Basic Daily Fee that every resident pays. It’s calculated from your income and assets through a means assessment, so two residents in the same home can pay quite different amounts, or nothing at all, depending on their financial circumstances.
If there’s a worry sitting underneath this for you, it’s usually one of two: that the family home will be taken into account, or that a bill will land that the family simply can’t meet. Both are addressed in the system’s design, and both are covered below.
It’s easy to mix this up with accommodation costs, but they’re separate things. The means-tested fee goes towards care and daily living services. Accommodation costs, paid as a Refundable Accommodation Deposit (RAD), Daily Accommodation Payment (DAP) or a combination, are for the room itself and are worked out separately.
If your means assessment finds you have little capacity to pay, you may not pay a means-tested fee at all, and the government covers that contribution in full instead.
Which version applies to you
Three different sets of means-tested fee arrangements are running in Australia today, and which one applies to you depends mainly on when you entered aged care. Many families will only need to know about the first two.
1 November 2025 arrangements (new entrants). If you’re entering residential aged care for the first time now, the old means-tested care fee has been replaced by two separate contributions: a hotelling contribution (towards daily living services) and a non-clinical care contribution (towards personal care, such as bathing and mobility support). Both are calculated from your means assessment.
1 July 2014 arrangements (residents assessed under the earlier rules). If you entered care between 1 July 2014 and 31 October 2025, you generally continue to pay the means-tested care fee under the earlier rules, unless you choose to opt in to the new arrangements. Your existing fees are protected in this way, which is often described as being “grandfathered”. A smaller group also falls under these earlier rules despite entering care more recently: anyone who was receiving a Home Care Package, or was approved and waiting for one, on or before 12 September 2024 is covered by a “no worse off” protection.
Pre-1 July 2014 arrangements (long-term residents). A small number of residents who entered care before 1 July 2014 pay an income tested fee instead, calculated only on income rather than income and assets, with its own separate cap.
If you’re not sure which of these applies to you or a family member, your fee advice letter from Services Australia will confirm it.
How the amount is worked out
The exact calculation changes depending on which of the three arrangements applies to you. In broad terms, Services Australia works out an amount based on your income and an amount based on your assets, then combines the two to arrive at your contribution, up to the relevant cap.
The formula behind that involves tiered percentages, indexed thresholds and different rules for each fee arrangement. Rather than give you an estimate that might not apply to your situation, here’s where to get an exact one. The most reliable way is a means assessment through Services Australia, or the fee estimator on the My Aged Care website, both of which we cover further down. A financial adviser experienced in aged care can also help you understand what a specific scenario would mean for your family.
What counts as income and assets
Your means assessment looks at a broad range of income and assets, not just superannuation or savings. Assessable income typically includes the Age Pension or other pensions, payments from the Department of Veterans’ Affairs (DVA), and deemed income from financial investments (a notional rate Services Australia applies to investments, regardless of what they actually earn). Assessable assets typically include savings, investments, and in most cases your share of any property you own.
The family home is the asset families ask about most. It can be included in your means assessment, but this depends on your circumstances, particularly whether a spouse or dependent relative continues to live in it. Where a protected person is still living there, the home is excluded altogether. Where it is included, only a capped portion of its value counts, never the full market value. As at 20 March 2026 that home exemption cap is $214,884, and it applies separately to each member of a couple, so anything above that figure is excluded from your assessable assets. Because the cap is indexed and the exemption rules turn on your circumstances, confirm it through your means assessment or with a financial adviser rather than assuming either way.
If you’re part of a couple, the assessment looks at half of your combined income and assets, regardless of whose name they’re held in or who earns the income. It’s worth raising directly during your means assessment, particularly if most of your assets sit in one partner’s name.
The caps that limit what you pay
Every version of the means-tested fee is capped, though the type of cap differs.
The hotelling contribution (1 November 2025 arrangements) is capped at $22.15 per day. There’s no annual or lifetime cap on this one, so unlike the other contributions it continues for as long as you’re in care. At the current daily cap that works out to a little over $8,000 a year, which, alongside the Basic Daily Fee, is the part of the cost that continues indefinitely and is worth building into a long-term plan.
The non-clinical care contribution (1 November 2025 arrangements) is capped at $107.32 per day, with a lifetime cap that applies once you’ve either paid $137,917.01 in total contributions or paid the contribution for four years, whichever happens first. Once you reach either limit, the government pays the full cost of your non-clinical care, and you stop paying this contribution altogether.
The means-tested care fee (1 July 2014 arrangements) can range from $0 up to $370.39 per day, with an annual cap of $35,910.43 and a lifetime cap of $86,185.23. The annual cap is not a permanent stop: once you reach it, you pay nothing further towards this fee for the rest of that year, then the annual total resets on the anniversary of the date you first entered aged care and the fee starts again. The lifetime cap works differently. Once reached, it ends the fee for good.
The income tested fee (pre-1 July 2014 arrangements) is capped at $106.10 per day.
These caps are indexed each March and September, so the dollar amounts above apply as at 20 March 2026 and will change at the next indexation date. The income-tested fee cap moves with the Age Pension rate, so it changes on the same dates.
How this fits with your other aged care costs
Your means-tested fee sits alongside two other core costs, plus an optional Higher Everyday Living Fee if you choose additional services. Every resident also pays the Basic Daily Fee, and many pay for their room through a RAD, DAP or combination of the two. We’ve covered how all of these fit together, along with the government’s contribution, in our full guide to aged care costs. For the accommodation side specifically, including how a RAD works and what retention means, see our guide to RAD and DAP. Accommodation costs for each CraigCare home are listed on our fees and charges page.
How to find out your actual fee
Because the means-tested fee depends entirely on your personal circumstances, the only way to get a figure specific to your situation is a means assessment, arranged through Services Australia or the Department of Veterans’ Affairs if relevant. This results in a fee advice letter confirming exactly what you’ll be asked to pay.
If you want a general sense of the numbers before that, My Aged Care’s fee estimator can give you an indicative figure.
Our caring Admissions team is here to walk alongside you and your family every step of the way. If you have any questions, you can call our Western Australian team on 0419 856 664 or our Victorian team on 0468 718 856, or submit an online enquiry.
Frequently asked questions
Do I have to pay the means-tested fee?
Not necessarily. It comes down to what your means assessment finds. If your income and assets sit below the relevant thresholds, this contribution can drop to zero, and the government picks up that part of the cost.
Can my means-tested fee change over time?
Yes. It’s reviewed if your income or assets change, and the underlying caps and thresholds are indexed every March and September, so the amount you pay can move even if your circumstances don’t.
Is the means-tested fee the same as the Basic Daily Fee?
No. The Basic Daily Fee is set at 85% of the single basic Age Pension and is the same for every resident. The means-tested fee is an additional, variable contribution based on your income and assets, and some residents don’t pay it at all.
Does the means-tested fee cover my accommodation costs?
No, they’re separate. Your room is paid for through a RAD, DAP or combination of the two, worked out on its own. The means-tested fee sits alongside that, covering care and daily living costs instead.
What happens once I reach the lifetime cap?
The government takes over that part of your care costs permanently, and you won’t be asked to contribute towards it again for as long as you remain in care. Worth keeping separate from the annual cap, which only pauses the fee until your next entry-date anniversary.