Accommodation Fees (Updated for 1 Nov 2025)

A move into residential care is triggered by the need to find a more suitable home – one that is safer and more appropriate for a person with increased care needs. As with any move to a new home, the person needs to pay for the right to reside. In residential care this is known as an accommodation payment (or for low-means residents it is called an accommodation contribution).

The accommodation payment pays for the use of the room and the other amenities available at the residential care service. This is considered a personal expense, however the government may subsidise accommodation costs for a person who is classified as low-means.

Once the room price is agreed, residents start by paying the daily fee (based on the relevant interest rate called the maximum permissible interest rate – MPIR) but can choose at any time to pay all or some as a lump sum to reduce (or eliminate) the daily fee payable.

Paying by lump sum can be likened to ‘buying’ the accommodation right. Paying by daily fee can be likened to ‘renting’ the accommodation (room).

The first step to working out your cost of accommodation is to determine whether you are:

• A market-price resident (ie needs to pay the published room price, albeit you may be able to negotiate a lower amount with the provider), or

• A low-means resident (government determines the room price and your contribution amount).

This is important to identify early, as identifying your status will guide the conversation you have about accommodation costs and opportunities to secure the room you want in your care service of choice.

Who qualifies as a low-means resident is discussed here.

Let us take away some of the stress. Contact us today to make an appointment to discuss your current or future aged care needs.

Bill Savellis

Senior Financial Adviser

Having navigated the Aged Care landscape for both of his parents, Bill understands how challenging it can be to make the right decisions for your future care needs. That's why he believes that everyone should have access to financial advice during this time. Bill has been a Financial Adviser for over 22 years, and is passionate about helping others access the financial advice they need. Drawing from his own experience in the financial sector, Bill develops strategic, personalised plans to support transitions to Aged Care or Home Care.

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Disclaimer: Prepared without taking into account your objectives, financial situation or needs. Before acting on any information in this article, Olive Grove Financial Advice recommends that you consider whether it is appropriate for your circumstances. Information in this article was correct and current as of 29 September 2025. Olive Grove Financial Advice is operated by Bill Savellis through The Financial Advisor (Australia) Pty Ltd ABN 72 619 546 431, who is a Corporate Authorised Representative (No. 1278394) of Havana Financial Services Pty Ltd.