Means Tested Care Fee Aged Care — How the New Contribution System Works

If you are searching for "means tested care fee aged care," you are likely dealing with an outdated term. For residents who entered permanent residential aged care before 1 November 2025, the old means-tested care fee still applies. But for anyone entering care from 1 November 2025 onward — which includes most families currently navigating a hospital-to-aged-care transition — the system has changed significantly.

What Replaced the Means Tested Care Fee

The single "means-tested care fee" has been split into two separate contributions, each with its own cap and rules:

Hotelling Contribution covers standard daily living costs — meals, laundry, utilities, cleaning. The maximum is $22.15 per day, assessed against the resident's income and assets through a Services Australia means assessment.

Non-Clinical Care Contribution covers personal care and nursing — help with bathing, dressing, mobility, and clinical nursing. The maximum is $107.32 per day, subject to both a four-year cumulative cap (1,460 days) and a lifetime cap of $137,917.01.

Every resident, regardless of financial position, must also pay the Basic Daily Fee. This is set at 85% of the single basic Age Pension — currently $66.80 per day (indexed 20 March and 20 September each year). The Basic Daily Fee is not means-tested and applies universally.

How the Means Assessment Determines Your Parent's Fees

Services Australia conducts the financial assessment using either Form SA457 (for self-funded retirees and part-pensioners) or Form SA485 (a shorter form for home-owning pensioners). The assessment considers both income (including deemed returns on financial assets) and the value of assets.

The family home receives special treatment. If a "protected person" — a spouse, dependent child, or close relative who has lived in the home for at least two years — continues to reside there, the home is fully exempt from the means test. If no protected person lives there, the home is exempt for the first two years after the resident enters care, then included up to a cap of $214,884.

The resulting Fee Advice Letter is valid for 120 days and tells the family exactly what their parent will pay in Hotelling and Non-Clinical Care Contributions on top of the Basic Daily Fee.

Support at Home Means Testing Is Different

If your parent is transitioning to home-based care under the Support at Home program (rather than residential care), the means testing works differently. Co-contributions are split across three service categories:

• Clinical Support (nursing, allied health): 100% government-funded, zero patient contribution
• Independence Support (personal care, home modifications): co-contribution of 5% to 50% based on means
• Everyday Living (cleaning, meals, gardening): co-contribution of 17.5% to 80% based on means

The Support at Home lifetime contribution cap is $135,318.69. From 1 October 2026, personal care services will also move to full government funding, further reducing out-of-pocket costs.

Timing the Means Assessment During a Hospital Stay

Families often delay the means assessment because it feels like a bureaucratic task they can deal with later. This is a costly mistake. Without a completed means assessment, Services Australia applies the maximum possible fee — the resident pays the highest rate until the assessment is finalised and backdated.

If your parent is in hospital and likely heading to residential care, lodge the SA457 or SA485 as early as possible. You can call Services Australia's Financial Information Service on 132 300 for free, impartial advice on how structuring assets will affect the assessment outcome.

The Hospital to Aged Care transition guide includes a step-by-step walkthrough of the means assessment process, including how to complete the SA457 form, what the deeming rules mean for financial assets, and how to protect the family home from being counted as an assessable asset.

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