The aged care means test, explained

When your parent moves into an aged care home, Services Australia (or the Department of Veterans' Affairs for DVA clients) looks at their income and assets. This is the means assessment. It decides two things: whether the government helps with their accommodation costs, and which means-tested fees they pay on top of the basic daily fee.

Figures in this guide are as at 20 September 2026, from the official Schedule of fees and charges for residential care. They are indexed regularly, usually on 20 March and 20 September, so check the current schedule before relying on them.

Step 1: getting the assessment

Your parent applies with a form or online through their Centrelink online account in myGov.

• SA457 is the main form, for people who don't get an income support payment such as the Age Pension.
• SA485 is for people who already get an income support payment and own their home. Services Australia already has their income details, so it only asks about the home.

A family member can act for your parent if they register with Services Australia (or DVA) as their nominee. A pre-entry assessment letter is valid for 120 days, so if your parent doesn't move in within that time, a new assessment is needed. Your parent can choose not to complete an assessment, but then they can be asked to pay the maximum contribution rate.

Step 2: the income test

Services Australia adds up your parent's assessable income, including the Age Pension and deemed income from financial assets such as bank accounts and shares. Deeming means income is worked out at set rates, not the interest actually earned. As at 20 September 2026, the deeming rates are 1.75% on the first $66,800 for a single person ($110,600 combined for a couple) and 3.75% above that.

The income test then works in bands. For a single person:

Annual income	Counts towards fees
Up to $36,454.60 (income free area)	Nothing
$36,454.60 to $90,130.04	50 cents in each dollar
$90,130.04 to $105,048	Nothing
$105,048 to $121,173.20	50 cents in each dollar
$121,173.20 to $145,818.40	Nothing
Above $145,818.40	50 cents in each dollar

For a member of a couple, the income free area is $35,726.60, the first threshold $89,402.04 and the fourth $142,906.40. The other thresholds are the same.

Step 3: the assets test

Assessable assets include savings, shares and other investments, super once your parent is over Age Pension age, cars and household contents, investment property, and the former home up to a cap (see our guide to the family home). A refundable accommodation deposit (RAD) paid to the home also counts as an asset, even if family paid it. The assets test also works in bands:

Assets	Counts towards fees
Up to $66,500 (asset free area)	Nothing
$66,500 to $219,858.40	17.5%
$219,858.40 to $266,000	Nothing
$266,000 to $369,366.66	7.8%
$369,366.66 to $552,858.40	Nothing
Above $552,858.40	7.8%

For a couple, each partner is assessed on half of their combined income and assets.

Step 4: the means-tested amount

The income and assets results are added together and divided by 364 to give a daily figure, the means-tested amount. This one number drives what follows.

• Below $73.73 a day (the maximum accommodation supplement): your parent has low means. The government helps with accommodation, and your parent pays an accommodation contribution set by Services Australia instead of the full room price.
• Above $73.73 a day: your parent pays the agreed room price, and the amount above $73.73 goes towards these contributions, in this order:
  1. Hotelling contribution: up to $22.15 a day. It goes towards everyday living costs such as meals and cleaning. There's no annual or lifetime cap.
  2. Non-clinical care contribution: only once the full hotelling contribution is paid, up to $109.45 a day. It stops once your parent has paid $140,652.80 in total or paid it for 4 years (the days don't have to be in a row), whichever comes first.

Everyone also pays the basic daily fee, $68.93 a day, which is set at 85% of the single basic Age Pension. The government funds the rest of the cost of care.

What about the means-tested care fee?

The means-tested care fee is part of the 1 July 2014 fee arrangements. Your parent pays it if they started permanent care on or after 1 July 2014 but before 1 November 2025, and haven't opted in to the new arrangements. Under the "no worse off" rule, it also applies to someone who was approved for home care on 12 September 2024 and moved into a home on or after 1 November 2025. They pay the fee worked out in the usual way. People who had been getting home care without a break since before 1 July 2014 don't pay it at all. People who moved in before 1 July 2014 pay an income-tested fee instead. As at 1 October 2026, the means-tested care fee can't be more than $380.46 a day. It stops for the rest of the year once $37,055.98 has been paid, and for good at $88,934.57. People who moved in on the 1 November 2025 arrangements pay the hotelling and non-clinical care contributions instead. Services Australia (or DVA, for veterans) works out the amount.

After the assessment

Services Australia sends your parent and the home a fee advice letter. From 1 November 2025, residents must report changes to their income or assets within 28 days. Fee decreases are backdated to the date of the change. If a change is reported late, a fee rise can apply from up to 28 days before Services Australia updates the assessment. Your parent's means status (low means or not) is set at entry and doesn't change while they stay in the same home, even if their finances change later.

You can try the numbers in the official My Aged Care fee estimator, or in the Aged Care Costs calculator.

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