The Means-Tested Care Fee in Residential Aged Care, Explained
The means tested care fee explained: who pays it in residential aged care, how it is calculated, the annual and lifetime caps, and the 2025 changes.
What the means-tested care fee is
Who pays it
How it is calculated
The caps that protect people
What changed in November 2025
The family home and the fee
If the fee is unaffordable
Frequently asked questions
Who has to pay the means-tested care fee?
Residents whose income and assets are above certain thresholds, mainly self-funded retirees and those with higher assets. Full pensioners and people with modest means often pay nothing. A Services Australia means assessment determines whether it applies.
Is there a limit on the means-tested care fee?
Yes. There are annual and lifetime caps, indicatively around $35,900 a year and $86,200 over a lifetime, both indexed. Once the lifetime cap is reached, the government covers the care contribution from then on.
Did the means-tested care fee change in 2025?
For residents entering from 1 November 2025 it was replaced by a hotelling contribution toward everyday living and a non-clinical care contribution toward personal care. Earlier residents and those protected by 'no worse off' arrangements may still pay the older fee.
Will my parent lose the family home to this fee?
The home is counted only up to a capped value in the means assessment, not its full worth, with protections where a spouse still lives there. It is a complex area, so get financial advice before selling or renting.