When an older Australian moves into a Commonwealth regulated Residential Aged Care facility (commonly known as a nursing home), they are usually asked to pay a daily contribution towards the cost of their day-to-day living expenses. This is known as the Basic Daily Fee.
The Basic Daily Fee helps cover the costs of things like:
This fee is separate from other possible charges like accommodation payments (for your room) and any income-tested care fees.
Nearly all residents in permanent Commonwealth regulated Residential Aged Care pay the Basic Daily Fee. It’s a standard fee set by the Australian Government, and it applies whether you receive a full Age Pension, part Age Pension, or are a self-funded retiree.
While some people may be eligible for government subsidies to help with accommodation costs or additional care fees, the Basic Daily Fee is a standard contribution that everyone generally pays, unless you’re a very low means resident and your provider has agreed to waive part of it in exceptional circumstances.
The purpose of the Basic Daily Fee is to ensure residents contribute to their own living costs while in care, just as they would if they remained in their own home. It helps cover everyday expenses, ensuring residential facilities can maintain services, provide meals, and keep the living environment clean, safe, and comfortable.
By sharing these costs between the resident and the Australian Government, residential care homes can remain sustainable while providing quality care to older Australians.
The Basic Daily Fee is linked to the single basic Age Pension rate. By law, the maximum Basic Daily Fee is set at up to 85% of the single basic Age Pension amount. This ensures that the fee stays in line with any indexation changes to the pension over time.
As of 20th March 2026, the Basic Daily Fee is $66.80 per day.
Remember:
The Basic Daily Fee changes in line with the indexation of the Age Pension. The Age Pension is indexed twice a year — on 20 March and 20 September. This means the Basic Daily Fee can increase twice per year to keep pace with the cost of living.
Your residential aged care provider must notify you of any changes and provide clear information about your ongoing fees.
The Basic Daily Fee is not means tested — it is standard for everyone in residential care. However, your income and assets will be assessed separately for other fees:
So, while the Basic Daily Fee is the same for everyone, your total residential care costs can vary based on your financial situation.
Generally, the Basic Daily Fee is paid on a monthly basis to your residential aged care provider. It may be deducted automatically from your Age Pension if you receive one, or you may arrange EFT payment from your own pension bank account.
Your provider will give you a written statement showing how much you owe, how it’s calculated, and any changes due to indexation.
If you are struggling to pay the Basic Daily Fee, talk to your provider as soon as possible. They may be able to help you understand your options, including:
It’s important to keep communication open — failing to pay your fees could affect your ability to stay in your chosen facility.
It’s easy to confuse the Basic Daily Fee with other costs. Here’s a quick breakdown:
Understanding these differences can help you plan your finances and know exactly what you’re paying for.
Your residential aged care provider must give you a formal Resident Agreement before you enter care. This agreement will outline your Basic Daily Fee, any other fees you may need to pay, how they’re calculated, and when they might change.
You have the right to:
Many people find it helpful to get independent financial advice before moving into residential care. Aged care financial advisers can help you:
When budgeting, consider all your expenses — including personal items, outings, phone and internet costs, and any health or medication needs.
Example 1: Full Pensioner
Mary receives the full Age Pension. Mary moves into residential care and pays the Basic Daily Fee, which is covered by her pension income. Mary does not have to pay a Means Tested Care Fee because her income and assets are below the threshold.
Example 2: Part Pensioner
John has a part Age Pension and some private savings. He pays the full Basic Daily Fee from his pension and savings. Because his assets are above the means test threshold, he also pays an additional Means Tested Care Fee and a Daily Accommodation Payment for his room.
Example 3: Self-Funded Retiree
Helen is a self-funded retiree. She pays the maximum Basic Daily Fee, just like everyone else, and because she has significant assets, she pays the full Means Tested Care Fee and her accommodation costs.
Understanding aged care fees can feel overwhelming. You’re not alone — help is available:
Is the Basic Daily Fee tax deductible?
Most of the times - NO. But some costs of residential aged care may be eligible as medical expenses for tax purposes — check with your tax adviser or the ATO for up-to-date information.
Do couples both pay the Basic Daily Fee?
Yes — if both members of a couple move into residential care, each person pays their own Basic Daily Fee (currently $66.80 per day). Fees are based on the individual, not the couple as a unit.
Can the Basic Daily Fee be reduced?
No — it is set by the government and applies to everyone. However, if you are facing severe financial hardship, you may apply to Services Australia (Financial Hardship Unit) for a possible reduction with other fees.
For the latest rates and rules, always check www.myagedcare.gov.au or speak with a qualified professional.