For many older Australians and their families, the process of moving into residential aged care brings up many questions — and few are bigger than how much it will cost. The Australian Government heavily subsidises aged care, but it also expects people to contribute where they can afford to do so. This balance is managed through what’s known as an income and asset assessment.
In Australia, the means-testing process for residential care uses a person’s income and assets to determine what they must pay towards their accommodation and care. This helps ensure that funding is fair, targeted to those who need it most, and transparent for families planning their future.
In this guide, you’ll learn:
The Australian Government subsidises residential aged care to ensure it remains accessible to people who genuinely need it. However, it also wants to ensure people who can afford to contribute do so, while protecting the financial wellbeing of those with limited means.
The means test looks at your financial situation to decide:
This assessment is separate from your pension eligibility. Even if you receive the full Age Pension, you may still have to pay some fees depending on other assets you own.
The means test is administered by Services Australia (Centrelink) or the Department of Veterans’ Affairs (DVA) if you’re a veteran. The outcome is then sent to your chosen aged care provider so they know how much to charge you and how much they’ll get in government subsidies on your behalf.
This means your care provider will ask you to complete an income and assets assessment before you move in.
Income includes:
Assets include:
Important: Your family home is exempt from the assets test if your spouse (or a protected person like a dependent child or carer) continues to live there. Otherwise, the value of the home is counted up to a capped value ($201,231.20 for 2025–26, indexed).
The income and asset assessment influences:
Annual and Lifetime Caps
The Means-Tested Care Fee is subject to:
Once you reach these caps, you no longer pay the Means-Tested Care Fee.
Before you move into residential aged care, you’ll need to submit the correct forms to Services Australia (Centrelink) or the DVA. There are two key forms:
Form SA485: Permanent Residential Aged Care Request for a Combined Assets and Income Assessment
The SA485 is the main form for new residents entering permanent residential care. It asks for detailed information about:
You’ll need to attach supporting documents, such as recent bank statements, superannuation details, property valuations, or pension letters.
Form SA457: Residential Aged Care Property Details for Centrelink and DVA Customers
The SA457 form is used if you have an interest in a home or property. It provides additional detail about your principal residence, including:
This information helps Services Australia determine if your home is exempt or partly counted towards your assets.
You can get the forms from:
Return the forms and any supporting documents as soon as possible. If you do not complete the assessment, you may be asked to pay the full costs of care and accommodation, which can be significantly higher than what you’d otherwise be assessed for.
Services Australia uses your forms to:
You’ll get an outcome letter explaining your assessed fees. If your circumstances change, you should notify Services Australia, as your fees may be adjusted up or down.
Your means-tested fees may change if:
Reviews happen automatically, usually quarterly, but you should always inform Services Australia if you know about a major change that may affect your assessment.
Do I have to sell my home? No. You are not required to sell your home to move into residential care. However, the value of the home may be included in your assets up to the capped amount if no protected person lives there.
Can I dispute my assessment? Yes. If you believe your income or assets have been incorrectly assessed, you can request a review through Services Australia.
What if I don’t complete the assessment? You may have to pay the maximum accommodation payment and means-tested fees until you do. Completing the forms gives you the best chance of accessing subsidies you are eligible for.
Here are some practical suggestions to help you get your means test right:
For more details about income and assets testing for residential aged care, visit:
Income and asset testing plays a vital role in Australia’s aged care system. It ensures that subsidies reach those who need them most and that older Australians can receive the support they need without unnecessary financial stress.
While it can feel overwhelming, knowing what to expect — and how to complete your SA485 and SA457 forms accurately — helps you plan ahead and avoid unexpected costs. The good news is that protections, caps, and clear rules exist to ensure fairness and transparency.
With knowledge, planning, and the right advice, you and your family can approach aged care with confidence and peace of mind.