Means Tested Care Fee

People with the financial capacity pay more.

Means Tested Care Fee

People with the financial capacity pay more.

What Is the Means Tested Care Fee?

When an older Australian moves into permanent Commonwealth regulated Residential Aged Care (often called a nursing home), they may be asked to pay a contribution called the Means Tested Care Fee.

The Means Tested Care Fee is an extra amount, on top of the Basic Daily Fee, that some residents pay based on their financial situation.

It’s designed to make sure that those who have the capacity to contribute more towards their personal and clinical care costs do so, while people with fewer means continue to receive affordable, quality care subsidised by the Australian Government.

Why Is the Means Tested Care Fee Charged?

Residential aged care in Australia is partly funded by the government and partly funded by residents. The Means Tested Care Fee ensures that funding is fair and sustainable — people who can afford to contribute more toward the cost of their personal and clinical care are asked to do so, which reduces the burden on taxpayers and helps support people who cannot afford to pay as much.

Unlike the Basic Daily Fee, which covers everyday living costs like meals, cleaning, and laundry, the Means Tested Care Fee goes specifically towards the cost of your personal and nursing care. This includes things like help with bathing, dressing, mobility, medication management, and clinical support provided by qualified staff.

Who Pays the Means Tested Care Fee?

Not everyone pays the Means Tested Care Fee. Whether you pay it — and how much you pay — depends on your assessed income and assets.

People with lower income and assets often pay no Means Tested Care Fee at all.
People with moderate means pay a part fee.
People with higher income and assets pay more — up to an annual and lifetime cap.

Your residential aged care provider cannot decide this amount — it is calculated by Services Australia (Centrelink) or the Department of Veterans’ Affairs (DVA) based on your means test assessment.

How Is the Means Tested Care Fee Calculated?

To work out how much you need to contribute, the government uses an income and assets test. This is similar to the test used for the Age Pension but with different thresholds and rules.

Here’s how it works:

You submit your Residential Aged Care Calculation of Your Cost of Care form (SA457) and a Permanent Residential Aged Care Request for a Combined Assets and Income Assessment (SA485) to Services Australia (or DVA).
Services Australia assesses your income and assets to work out your means-tested amount.
Your Means Tested Care Fee is then calculated based on your means-tested amount, taking into account government subsidies.

The fee can be up to your total cost of care subsidy, but there are limits:

Annual Cap: There is a yearly limit on how much you can be asked to pay.
Lifetime Cap: There is also a lifetime limit. Once you reach it, you won’t pay any more Means Tested Care Fees in the future.

Income and Assets for the Means Test

The assessment looks at:

Your income — for example, pension income, superannuation income streams, rental income, dividends, and deemed income from financial assets.
Your assets — for example, savings, shares, investment properties, and some of the value of your former family home (subject to thresholds).

Some assets may be exempt or only partially counted — such as the family home, which is exempt if a protected person still lives there (like a spouse, dependent child, or carer who is eligible under the rules).

It’s important to know that the rules can be complex and change periodically. Always check the latest thresholds and deeming rates on the Services Australia website.

Do You Have to Provide Your Financial Information?

It is not compulsory to complete the SA485 and SA457 forms — but if you don’t, you’ll be charged the maximum Means Tested Care Fee by default. Most people choose to provide their information to ensure they only pay what they are legally required to pay.

What Are the Current Caps?

The annual and lifetime caps are indexed yearly. As of 20th March 2025:

Annual cap: $33,309.29
Lifetime cap: $79,942.44

Once you reach the annual cap, you won’t pay any more Means Tested Care Fees for the rest of that year. Once you reach the lifetime cap, you won’t pay any more Means Tested Care Fees ever again — even if you move to a new residential care facility.

Note: These figures change every year, so always check the latest rates on My Aged Care or speak to a qualified adviser.

Do You Have to Provide Your Financial Information?

Practical Example

Here’s an example of how it might work:

Margaret moves into permanent residential care. She fills out the SA457 and SA485 forms and Services Australia calculates her means-tested amount. Her income and assets place her in a bracket where she must pay a Means Tested Care Fee of $30 per day, in addition to her Basic Daily Fee and accommodation payment. She keeps paying this until she reaches her annual cap. Once she hits her lifetime cap, she will no longer pay any Means Tested Care Fees.

What About Couples?

For couples, a portion of income and assets is usually allocated to each person — so each member of a couple may pay a different Means Tested Care Fee depending on their individual share of the combined finances.

How Is the Fee Paid?

The Means Tested Care Fee is paid directly to your residential aged care provider. Your provider must give you a clear statement showing:

Your Means Tested Care Fee amount
How it’s been calculated
How much you’ve paid towards your annual and lifetime caps

It’s usually paid fortnightly or monthly, but always check with your provider about their payment arrangements.

What If Your Financial Circumstances Change?

If your income or assets change significantly — for example, you sell your home or your super balance changes — you should update Services Australia so your fee can be recalculated. This can help you avoid paying too much or too little.

Financial Hardship Assistance

If you genuinely can’t afford to pay the Means Tested Care Fee, you may be eligible for financial hardship assistance. You’ll need to apply through Services Australia and provide evidence of your situation. If you qualify, the government may cover some or all of the fees you can’t pay.

Your Rights

You have the right to:

Receive clear information about your fees and how they’re calculated
Request a reassessment if your circumstances change
Apply for hardship assistance if needed
Complain if you believe your fees have been calculated incorrectly

Your Resident Agreement must outline your Means Tested Care Fee and any other fees and charges you’re required to pay.

Where to Get Help

Understanding the Means Tested Care Fee can feel overwhelming — you don’t have to figure it out alone. Here are some trusted resources:

My Aged Care: Visit www.myagedcare.gov.au for clear explanations and tools like the Fee Estimator.
Services Australia: For help completing the SA485 and SA457 forms or to update your details.
Aged Care Financial Advisers: For personalised advice about how the Means Tested Care Fee fits into your overall aged care costs.
Department of Veterans’ Affairs: If you’re a veteran, DVA may handle your means test assessment.

Key Takeaways

The Means Tested Care Fee is an extra contribution some people pay for their personal and clinical care in residential care.
It’s calculated based on your income and assets assessment — so those who can afford to pay more, do so.
You must submit the SA485 and SA457 forms to Services Australia or DVA for your assessment.
There are annual and lifetime caps to limit your total fees.
If your circumstances change, let Services Australia know so your fee stays accurate.

Above all, don’t be afraid to ask questions, seek clear written information, and get independent advice. Aged care is complicated, but you’re not alone — help is always available.