Spacious, premium rooms at industry-standard rates.
Flexible payment options to suit your budget.
Government subsidies are available for eligible residents.
Transparent pricing with no hidden fees.
Your guide to aged care costs
Understanding the costs of aged care can feel overwhelming, but having a clear picture of the fees and payment options makes planning easier. Whether you're exploring aged care accommodation choices or looking into government subsidies, knowing what to expect ensures you can make informed financial decisions.
From refundable deposits to daily care fees, aged care costs vary depending on individual circumstances. This page breaks down key expenses, funding options, and financial assistance available to help you or your loved one confidently navigate the journey.
What is a refundable accommodation deposit (RAD)?
The Refundable Accommodation Deposit (RAD) is an upfront, government-regulated payment for aged care accommodation. It secures your place in a residential aged care home and ensures access to quality living arrangements. The full amount is refunded minus any agreed deductions, such as unpaid fees when you leave or to your estate.
How does RAD work?
The RAD acts as a security deposit for your accommodation in an aged care facility.
The full amount is refunded when you leave or to your estate.
Pay in full, partially, or choose a Daily Accommodation Payment (DAP) instead.
Aged care providers must publicly list their RAD prices for transparency.
The RAD is exempt from Centrelink’s assets test, meaning it won’t affect pension eligibility.
How much is RAD?
At Oxa Care, the RAD is $750,000, reflecting our premium, extra-large rooms and industry-leading amenities.
Payment options for RAD
- Pay in Full - A one-time upfront payment to the aged care facility that is fully refundable when you leave.
- Part RAD - Pay a portion upfront and cover the remaining balance through daily payments. The unpaid balance accrues interest at the Maximum Permissible Interest Rate (MPIR) (currently 8.42%).
Example: If the RAD is $750,000, but you pay $375,000 upfront, the remaining $375,000 accrues interest, resulting in a DAP of $86.51 per day. - Pay the Full DAP (No RAD Upfront) - No lump sum payment is required. Instead, you pay daily installments that cover the full RAD amount.
Example: If you opt not to pay a $750,000 RAD, your DAP would be $173.01 per day at an 8.42% interest rate.
What is a daily accommodation payment (DAP)?
The Daily Accommodation Payment (DAP) is an alternative to paying the Refundable Accommodation Deposit (RAD) upfront. You pay daily installments instead of a lump sum to cover your accommodation costs in an aged care home.
The DAP is interest-based and calculated using the unpaid portion of the RAD. The interest rate—the Maximum Permissible Interest Rate (MPIR)—is set by the Australian Government and may change quarterly.
How does DAP work?
Instead of paying a large lump sum (RAD), you pay a daily fee.
The government sets the MPIR, which is currently 8.42% (as of March 2025).
You can combine RAD and DAP to reduce your daily costs.
Unlike the RAD, the DAP is not refunded when you leave the facility.
Payment options at Oxa Care
Oxa Care offers flexible payment solutions to accommodate different financial needs.
Payment Option
The Combination Payment option
What is a Combination Payment?
A Combination Payment allows you to split your aged care accommodation costs between a Refundable Accommodation Deposit (RAD) and a Daily Accommodation Payment (DAP). Instead of paying the full RAD upfront or covering the cost entirely through daily DAP payments, you can pay a portion of the RAD as a lump sum and cover the remainder through daily installments. This flexible approach helps manage affordability while reducing the total interest paid over time.
How does a Combination Payment work?
- Pay part of the RAD upfront – This lowers the remaining unpaid RAD balance.
- Pay the remaining balance as a DAP – Interest is applied to the unpaid amount at the Maximum Permissible Interest Rate (MPIR).
- Convert DAP payments into RAD later – If you receive additional funds, you can make lump sum payments anytime to reduce your daily DAP.
Combination Payment scale
Basic Daily Fee
What is the Basic Daily Fee?
The Basic Daily Fee is a mandatory daily charge that covers the cost of essential services in an aged care home, including meals, cleaning, laundry, heating, cooling, and facility maintenance.
This fee applies to all aged care residents, regardless of whether they pay privately or receive government subsidies. The Australian Government sets and regulates this fee, indexing it in line with the Age Pension to reflect changes in the cost of living.
How much is the Basic Daily Fee?
The Basic Daily Fee is $63.57 per day.
- This amount is set at 85% of the full single Age Pension.
- The fee is adjusted twice a year (March & September).
- It applies to all residents, regardless of whether they pay via RAD, DAP, or a combination payment.
What does the Basic Daily Fee cover?
Meals & Nutrition
Cleaning Services
Laundry Services
Heating & Cooling
Electricity & Water
Basic Personal Care
Facility Management
Recreational Activities
24/7 Assistance
Health Monitoring
What is the Means-Tested Care Fee?
The Means-Tested Care Fee (MTCF) is a government-assessed contribution towards the cost of aged care based on your income and assets. It ensures that those who can afford to contribute more do so, while those with limited financial resources receive greater government support.
How is the Means-Tested Care Fee calculated?
- Your Income – Includes pension payments, investments, rental income, and other earnings.
- Your Assets – Includes savings, property (excluding your home in some cases), superannuation, and financial investments.
- Your Family Home – May or may not be included in the assets test, depending on whether a spouse or protected person continues living there.
The government reviews your Means-Tested Care Fee quarterly, so your required contribution may change over time.
What is Low-Means (Concessional & Supported) Aged Care?
The Australian Government provides financial assistance for aged care residents who cannot afford the full cost of accommodation and care. If eligible, the government will partially or fully cover your accommodation costs, ensuring access to quality aged care, regardless of financial situation.
This type of support is commonly known as Low-Means, Concessional, or Supported Aged Care.
How to apply for Low-Means Aged Care?
Step 1
Complete an Income & Assets Assessment with Services Australia (Centrelink).
Step 2
Receive your fee assessment letter confirming your eligibility.
Step 3
Choose an aged care home that offers low-means placements, such as Oxa Care.
Step 4
Government subsidies are applied, reducing your accommodation costs.
Who is eligible for Low-Means Aged Care?
To qualify for government-supported aged care accommodation, you must meet the income and assets test conducted by Services Australia.
- Assets below $61,500 (as of 2023-24)
- Income below $32,331 per year
- Limited savings, investments, or superannuation
- Not owning a home (unless a protected person, such as a spouse or dependent child, resides there)
If you meet these criteria, the government will partially or fully cover your accommodation costs, making aged care more accessible.
What Fees Do Low-Means residents pay?
If you qualify as a Low-Means Resident, the government will partially or fully cover your accommodation costs. However, you may still be required to contribute to:
- Basic Daily Fee – Set at 85% of the single Age Pension.
- Means-Tested Care Fee – If applicable, based on your income and assets.
- Extra Services Fees – Optional charges for premium accommodation or lifestyle upgrades.
Unlike standard residents, Low-Means residents are not required to pay a Refundable Accommodation Deposit (RAD) or Daily Accommodation Payment (DAP).
Common additional services enjoyed by our residents
Additional Service Fees are optional charges for premium amenities, lifestyle upgrades, and extra care services that go beyond standard aged care requirements. These fees apply to residents who choose enhanced accommodation, premium dining, or specialised services not covered by the Basic Daily Fee or government funding.
Premium Accommodation
Larger rooms, private suites, premium furnishings.
Entertainment & Activities
Exclusive outings, live performances, and cultural programs.
Technology & Connectivity
Private phone lines, high-speed Wi-Fi, streaming services.
Comparing the costs
Deciding between short-term respite care and long-term permanent care depends on the needs of the resident and their carer. Respite care provides temporary support, giving residents short-term assistance while offering carers a break. In contrast, permanent care is designed for those who require ongoing, full-time support in an aged care home.
Both options offer tailored services and flexible payment arrangements, ensuring care remains accessible and suited to individual circumstances. Understanding the differences between permanent and respite care will help you make an informed decision that best supports your loved one’s health, well-being, and lifestyle.
A temporary care option that supports residents while giving carers a break.
Accommodation costs
Additional Service Fees
Government Support
Duration of Stay
Purpose
Flexibility
A temporary care option that supports residents while giving carers a break.
Accommodation costs
Additional Service Fees
Government Support
Duration of Stay
Purpose
Flexibility
How Oxa Care stands out
Enjoy premium living at Oxa Care with more features and better value
Choosing aged care shouldn’t mean compromising on comfort or quality. At Oxa Care, we offer spacious rooms, private ensuites, premium dining, and a range of included activities. With a focus on exceptional care, modern amenities, and a resident-centred approach, Oxa Care provides outstanding value without hidden costs.
Here’s how Oxa Care compares
We’ve done the research for you.Out of 450 rooms in 148 Melbourne aged care facilities, here’s how Oxa Care compares…
Features / Inclusion
Need help with funding your aged care?
Understanding aged care costs can feel overwhelming, but you don’t have to navigate it alone. Whether you’re exploring government subsidies, flexible payment options, or financial assistance, we’re here to help.
Explore funding options such as:
- Government subsidies for low-means residents.
- Flexible payment methods (RAD, DAP, or a combination).
- Financial hardship assistance for eligible individuals.
Visit our Funding Options page for a clear breakdown of how aged care funding works and how we can support you in making the right choice.
Resources and downloads
Access helpful guides to better understand aged care costs and financial planning. Download our resources to assist with budgeting, government subsidies, and preparing for aged care fees.
Contact us
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