Basic Daily Fee

What Is the Basic Daily Fee?

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:

• Meals and snacks
• Laundry services
• Cleaning and general household services
• Heating and cooling
• Routine care services and assistance with daily activities

This fee is separate from other possible charges like accommodation payments (for your room) and any income-tested care fees.

Who Pays the Basic Daily Fee?

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.

Why Is the Basic Daily Fee Charged?

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.

How Is the Basic Daily Fee Calculated?

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 2025, the Basic Daily Fee is $60.86 per day.

Remember:

• If you receive a full pension, the Basic Daily Fee will usually be covered by your pension income, but you may still need to budget carefully for any other expenses or fees.
• If you receive a part pension or are self-funded, you are still required to pay the Basic Daily Fee at the same maximum rate.

How Often Does the Basic Daily Fee Change?

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.

Is the Basic Daily Fee Means Tested?

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:

• Means Tested Care Fee: An extra contribution some people may pay if their income and assets exceed certain thresholds.
• Accommodation Payment: Your income and assets determine whether the government will subsidise some or all of your room costs.

So, while the Basic Daily Fee is the same for everyone, your total residential care costs can vary based on your financial situation.

How Do You Pay the Basic Daily Fee?

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 payment from your own 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.

What Happens If You Can’t Pay?

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:

• Checking if you’re getting your full pension entitlements
• Exploring any financial hardship assistance you may be eligible for
• Making payment arrangements if needed

It’s important to keep communication open — failing to pay your fees could affect your ability to stay in your chosen facility.

Basic Daily Fee vs Other Fees: What’s the Difference?

It’s easy to confuse the Basic Daily Fee with other costs. Here’s a quick breakdown:

• Basic Daily Fee: Everyone pays this. It covers your everyday living costs — food, cleaning, laundry, heating, etc.
• Means Tested Care Fee: This is an additional fee based on your income and assets, used to contribute to the cost of your personal and clinical care.
• Accommodation Payment: This is what you pay for your room, either as a Refundable Accommodation Deposit (RAD), Daily Accommodation Payment (DAP), or a combination.
• Extra Services Fees: Some homes offer upgraded services like premium rooms, special meal options, or additional activities for an extra fee.

Understanding these differences can help you plan your finances and know exactly what you’re paying for.

What Are Your Rights?

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:

• Receive clear, timely information about all fees and charges
• Be given notice of any changes
• Request a financial hardship assessment if you’re struggling to pay

How to Budget for the Basic Daily Fee

Many people find it helpful to get independent financial advice before moving into residential care. Aged care financial advisers can help you:

• Understand how the Basic Daily Fee works with your pension income
• Plan for Means Tested Care Fees and accommodation costs
• Maximise any government subsidies you may be eligible for

When budgeting, consider all your expenses — including personal items, outings, phone and internet costs, and any health or medication needs.

Examples of How the Basic Daily Fee Works

Example 1: Full Pensioner

Mary receives the full Age Pension. She moves into residential care and pays the Basic Daily Fee, which is covered by her pension income. She 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.

Where to Get More Help

Understanding aged care fees can feel overwhelming. You’re not alone — help is available:

• Visit My Aged Care for detailed information.
• Speak to an aged care financial adviser for personalised advice.
• Ask your residential care provider for a clear breakdown of all fees and charges.
• Contact Centrelink for information about your pension entitlements and how they interact with residential care fees.

Frequently Asked Questions

Is the Basic Daily Fee tax deductible?

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. 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 for assistance with other fees.

Key Takeaways

• The Basic Daily Fee is a standard charge to help cover everyday living costs in residential care.
• It is set at up to 85% of the single basic Age Pension rate and indexed twice a year.
• All residents generally pay it, regardless of their income or assets.
• It works alongside other possible fees like Means Tested Care Fees and Accommodation Payments.
• Always get clear information from your provider and seek independent advice if you’re unsure.

For the latest rates and rules, always check www.myagedcare.gov.au or speak with a qualified professional.