Moving into residential aged care is one of the most significant decisions an older Australian and their family will ever make. There is a lot to think about — the facility itself, the care team, the location, the cost. And then, often at a time of considerable emotional stress and urgency, you are presented with a set of legal documents and asked to sign before your loved one can move in.

These documents — now called a service agreement and an accommodation agreement under the Aged Care Act 2024 — govern everything about your loved one’s stay: the care they will receive, the fees they will pay, the room they will occupy, what happens if their needs change, and how they can exit if they need to. Getting them right matters enormously.

This guide explains every component of the aged care resident agreement in plain English, what changed under the new Aged Care Act from 1 November 2025, the key things to check before signing, the clauses that can catch families off guard, and what your rights are if something is not right. Whether you are facing this decision right now or simply planning ahead, this is the most important document you will read before entering residential aged care.

What Is a Resident Agreement (Now Called a Service Agreement)?

A service agreement is a legal contract between a resident and their aged care provider. It sets out what care and services the provider will deliver, how much the resident will be asked to contribute towards those services, and the conditions that govern the relationship between the two parties. Under the Aged Care Act 2024, providers are legally required to enter into a service agreement before — or not long after — a resident moves in.

The service agreement must be written in plain language and be readily understandable. It must state that the resident has a right to occupy a bed at the aged care home from the day the agreement takes effect. And crucially, the provider is responsible for making sure the resident understands what is in the agreement — not the other way around. If interpretation support is needed, the provider can use the National Translating and Interpreting Service.

For residents entering permanent care, there will typically be two separate agreements — though providers may combine them into one document:

• Service agreement — covers the care and services to be provided, fees and contributions, care planning, your rights and responsibilities, complaints processes, and exit conditions
• Accommodation agreement — covers your specific room, the agreed room price, how you will pay for accommodation (RAD, DAP, or combination), refund arrangements, and conditions for room changes
• Higher Everyday Living Agreement (optional) — only if you choose premium optional services such as wine with dinner, premium entertainment, or additional menu options; this is separate and entirely optional

Understanding Aged Care Fees in 2026: What You Will Pay

The fees section of the service and accommodation agreements is where most families need the most help. Under the new Aged Care Act 2024, the fee structure for residential aged care has changed significantly for anyone entering care from 1 November 2025. Understanding each fee — and what it is for — is essential before signing anything.

Basic Daily Care Fee (BDCF)

The Basic Daily Care Fee is paid by every resident in permanent residential aged care, regardless of income or assets. As at 1 January 2026 it is set at $65.55 per day (approximately $23,926 per year), representing 85% of the single basic Age Pension. It is updated twice a year — on 20 March and 20 September — in line with Age Pension increases. This fee covers everyday living expenses including meals, cleaning, laundry, and utilities. It is not means-tested and cannot be waived.

Hotelling Supplement Contribution (HSC)

The Hotelling Supplement Contribution is a means-tested fee introduced on 1 November 2025. It applies to residents who can afford to pay the full cost of their accommodation. It covers daily living costs — food, cleaning, laundry, and utilities — at a higher rate than the Basic Daily Fee for those assessed as having the financial capacity to contribute more. Services Australia calculates the HSC based on your income and assets assessment.

Non-Clinical Care Contribution (NCCC)

The Non-Clinical Care Contribution is the new means-tested fee that replaced the former Means Tested Care Fee for residents entering care from 1 November 2025. It covers personal care services — bathing, mobility assistance, lifestyle activities — and is calculated by Services Australia based on your income and assets. You only pay the NCCC if you are paying the full Hotelling Supplement Contribution. There are both daily and lifetime caps — the lifetime cap is currently $137,917.01, and the fee applies for a maximum of four years. After reaching either the lifetime cap or four years (whichever comes first), the government covers the full cost of non-clinical care.

Accommodation Costs: RAD, DAP, RAC, DAC

Accommodation costs are separate from care fees and cover your room and living space. They are paid in one of three ways:

• Refundable Accommodation Deposit (RAD) — a lump sum upfront payment. This is refunded when you leave care, minus any agreed deductions and retention amounts. From 1 November 2025, providers retain 2% per annum of the RAD balance, calculated daily and deducted monthly, for a maximum of five years. The national average RAD was approximately $573,000 as at mid-2025.
• Daily Accommodation Payment (DAP) — a rental-style daily payment, non-refundable. The DAP is calculated using the Maximum Permissible Interest Rate (MPIR), which is currently 7.65% per annum for January–March 2026. DAPs are indexed twice yearly (20 March and 20 September) in line with CPI.
• Combination payment — part RAD, part DAP. Both retention (on the RAD component) and indexation (on the DAP component) apply.

If you receive government assistance with accommodation costs (assessed as “low means”), you pay a Refundable Accommodation Contribution (RAC) or Daily Accommodation Contribution (DAC) rather than the full RAD/DAP. The government pays the difference.

Higher Everyday Living Fee (HELF) — Optional Only

The Higher Everyday Living Fee replaces the former “additional services” and “extra services” fees from 1 November 2025 (existing Additional/Extra Services agreements remain valid until 31 October 2026). HELF is entirely optional — it covers premium services above the standard care and services list, such as premium menu options, wine with dinner, or additional entertainment. You are never required to sign a HELF agreement and signing one must be completely your choice.

What Must Be Included in the Service Agreement

Under the Aged Care Act 2024, a compliant service agreement must include the following. Use this as your checklist when reviewing any agreement:

Care and Services to Be Provided

The agreement must clearly list the specific care and services the provider will deliver. This should align with the resident’s assessed care needs from their ACAT (Aged Care Assessment Team) assessment and the provider’s obligations under the strengthened Aged Care Quality Standards. Check that the services listed actually match what was discussed and agreed during the assessment and tour process — vague language like “appropriate care” should be queried and made specific.

All Fees and How They Are Calculated

Every fee must be individually listed, with the amount and frequency of charges clearly stated. The agreement should specify which fees are government-set (and therefore cannot be varied by the provider), which fees are means-tested (and subject to Services Australia’s assessment), and which fees are optional. It must also state that fees for services beyond the standard service list will be itemised separately and require your consent.

Ageing in Place — How Changing Needs Will Be Managed

The agreement must outline how the provider will continue to support the resident as their needs change over time — a principle known as “ageing in place.” This section should explain the circumstances under which the provider can increase the level of care provided, the process for reassessing care needs, and any implications for fees if the level of care required increases.

When a Resident Can Be Asked to Leave

The agreement must clearly explain the circumstances under which a resident may be asked to leave — and the assistance the provider will give to find suitable alternative accommodation. Under the Aged Care Act 2024, providers cannot simply ask a resident to leave without valid grounds and proper process. Read this section carefully. Any clause that appears to give the provider broad or undefined discretion to terminate the agreement should be queried with a legal adviser.

Complaints and Feedback Process

The agreement must describe the provider’s complaints and feedback management system — how concerns can be raised, who they go to, what process is followed, and how the resident will be kept informed. It must also acknowledge the resident’s right to escalate concerns to the Aged Care Complaints Commissioner at any time without fear of retribution.

Your Rights and the Statement of Rights

The service agreement must acknowledge and align with the Statement of Rights under the Aged Care Act 2024. This Statement replaced the former Charter of Aged Care Rights and is now a legally enforceable set of entitlements covering dignity and respect, independence and autonomy, safe and quality care, privacy, involvement in care decisions, and the right to raise concerns without fear of punishment.

How to Exit the Agreement

The agreement must state the process for leaving the facility — whether that means the resident choosing to move to another provider, returning home, or in the event of the resident’s passing. Check the notice period required, whether any fees continue during the notice period, and what happens to the RAD (if paid) after departure — including the timeline for refund and any legitimate deductions.

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The Accommodation Agreement: What to Check

The accommodation agreement is a separate document (or section) that covers your room specifically. It must be entered into before a resident moves into permanent care. Here is what to review carefully:

The Agreed Room Price

The accommodation agreement must state the specific room price you have agreed to with the provider. Once agreed, this room price remains fixed for as long as the resident stays in that room. If the resident voluntarily moves rooms, the new current room price and the current MPIR will apply — so a voluntary room move can affect accommodation costs. The maximum room price is set by government and is currently $758,627 (from 1 July 2025). Check that the room price does not exceed this figure.

RAD Retention — The New 2% Rule

For residents entering care from 1 November 2025, providers are now entitled to retain 2% per annum of the RAD or RAC balance, calculated daily and deducted monthly, for a maximum of five years. This means that a RAD of $500,000 would have approximately $10,000 retained in the first year, reducing to less over time as the balance falls. After five years, no further retention amounts are deducted. The accommodation agreement must clearly explain how this retention is calculated and when it applies. This is a significant change from the pre-November 2025 rules, under which RADs were fully refundable.

DAP Indexation

If you are paying a Daily Accommodation Payment, the agreement must disclose that the DAP will be indexed twice yearly (20 March and 20 September) in line with the Consumer Price Index. The MPIR used to calculate your initial DAP is fixed at entry — check the current rate stated in the agreement against the current government-published MPIR (7.65% for January–March 2026).

RAD Refund Timeline and Conditions

The accommodation agreement must clearly state when and how the RAD will be refunded when the resident permanently leaves the facility — including on the passing of a resident, when the provider must refund the balance upon receiving probate or letters of administration. Understand what legitimate deductions may apply, the timeline for refund, and what happens if the provider is unable to refund promptly.

Room Change Conditions

Check what the agreement says about circumstances in which you may be asked to change rooms — for example, if a resident’s care needs increase significantly, if the facility undertakes renovations, or in other specified circumstances. Confirm whether a room change could affect your accommodation costs and under what conditions a room change can occur without your consent.

Red Flags and Clauses to Question Before Signing

Legal advocates at Seniors Rights Service have identified a number of problem clauses that sometimes appear in aged care agreements and should be carefully scrutinised before signing. Watch for these:

Compulsory Guarantor Clauses

There is no requirement in the Aged Care Act for a family member to act as a financial guarantor for a resident’s fees. If the agreement contains a clause stating that appointment of a guarantor is compulsory or required, this is incorrect. Ask for it to be removed or amended. No one should be pressured into personally guaranteeing aged care fees.

Clauses Binding “Heirs” or the Estate

If the agreement says it is binding on “heirs,” query this clause. The agreement should bind the resident’s estate — not individual family members. Seniors Rights Service recommends replacing “the heirs” with “your estate” to ensure family members are not personally liable for any outstanding amounts after a resident passes.

Fees for Services the Provider Is Already Obliged to Provide

Compare the services listed in the fee schedule carefully against the services the provider is required to provide under the government’s Residential Care Service List. If you are being asked to pay separately for something that is a standard included service, question it. Providers cannot charge additionally for services they are already funded to deliver under the government subsidy.

Room Cleaning Fees on Departure

Some agreements contain a clause requiring residents or their families to pay for cleaning the room on departure. There is no provision in the Aged Care Act that allows a provider to charge for routine room cleaning — only for damage caused wilfully by the resident. If this clause appears, query it.

Vague Termination Rights for the Provider

The circumstances in which a provider can ask a resident to leave must be clearly and narrowly defined. Clauses that give the provider broad, undefined discretion to terminate the agreement — such as “if the resident’s behaviour is deemed unsuitable” — should be queried. The grounds for termination must be specific, and the process must include appropriate notice, assistance finding alternative accommodation, and adherence to the resident’s rights under the Act.

RAD Deduction Provisions

Carefully check what the agreement says about deductions from your RAD. While providers are now entitled to retain 2% per annum under the new rules, and while some providers allow residents to voluntarily draw down on their RAD to pay other fees (with the resident’s request), any deductions beyond these must have your explicit agreement. Ensure the agreement does not give the provider broad discretion to deduct amounts from the RAD without prior consent.

Your Rights When Signing an Aged Care Agreement

The Aged Care Act 2024 and the strengthened Quality Standards give you significant protections around the agreement process. These are not just good practice — they are enforceable legal obligations on providers.

• Time to consider — The provider must give you adequate time to review, process information, and seek advice before signing. They cannot pressure you to sign immediately. You must be given the opportunity to seek independent legal or financial advice if you wish.
• Plain language — The agreement must be written in plain language. If you cannot understand a section, the provider has an obligation to explain it to you in a way you can understand — not simply to ask you to sign anyway.
• Interpreter support — If English is not your first language or you need communication support, the provider must arrange this.
• Signing is not required — A resident can agree to the terms of the service agreement without physically signing it. If a resident chooses not to sign, the provider must record all discussions and agreements. Do not feel that your loved one must sign a document they do not understand just to access care.
• Review and update — The provider must review and update the agreement if the resident’s care needs change, or if the resident asks for a review. You have the right to request a review at any time.
• Independent advice — Always seek independent financial advice from an accredited aged care financial adviser before deciding on your RAD/DAP option. These are significant, long-term financial decisions with important estate planning implications.

Grandfathering: What If Your Loved One Was Already in Care Before 1 November 2025?

If your loved one entered residential aged care before 1 November 2025, they are generally protected under grandfathering rules — meaning their existing fee arrangements continue unchanged unless they choose to opt into the new rules. This includes accommodation payment arrangements (the 2% RAD retention and DAP indexation do not apply to residents who were already in care on 31 October 2025), and means-tested fee arrangements (they continue to pay the former Means Tested Care Fee, not the new HSC and NCCC).

However, providers are required to transition all resident agreements to the new format by 31 October 2026. This means existing residents will receive a new service agreement document before the end of 2026. Families should review this new agreement carefully when it arrives — and confirm that it does not inadvertently change fee arrangements that should be protected by grandfathering. If in any doubt, seek legal or financial advice before agreeing to the updated agreement.

Where to Get Help Before Signing

You do not have to navigate this alone. There are several free and professional services that can help you review an aged care agreement before you sign.

Seniors Rights Service (NSW)

Seniors Rights Service in NSW provides free, independent, and confidential legal advice on aged care agreements. They have specific expertise in identifying problem clauses and can advise on your rights. Call 02 9281 3600.

OPAN — Older Persons Advocacy Network

OPAN provides free, independent advocacy support across all states and territories. An OPAN advocate can help you understand the agreement, identify concerns, and support you through discussions with the provider. Call 1800 700 600.

An Accredited Aged Care Financial Adviser

Before deciding on RAD, DAP, or combination payment, always seek advice from an accredited financial adviser who specialises in aged care. The financial decisions around accommodation payments have significant implications for your assets, pension entitlements, and estate. Use the My Aged Care fee estimator as a starting point but do not rely on it alone for major financial decisions.

An Aged Care Legal Specialist

For complex situations — particularly where a resident has cognitive impairment, where an enduring power of attorney is involved, or where the agreement contains unusual clauses — seek legal advice from a solicitor who understands the Aged Care Act. Your state or territory Law Society can refer you to appropriate specialists.

Frequently Asked Questions: Aged Care Resident Agreements

What is the difference between a resident agreement and a service agreement?

They are effectively the same thing at different points in time. The “resident agreement” was the term used under the former aged care legislation. From 1 November 2025, under the Aged Care Act 2024, this is now called a “service agreement.” Anyone entering care from that date signs a service agreement. Providers have until 31 October 2026 to transition existing residents from the old resident agreement to the new service agreement format.

Do I have to sign the agreement before my loved one can move in?

The provider must enter into a service agreement with a resident before, or not long after, they move in. Crucially, a resident can agree to the terms without physically signing the document — the provider must then record all discussions and agreements in writing. You should not feel pressured to sign a document you have not had adequate time to review. You have 14 days from agreeing to withdraw from the service agreement.

Is the RAD guaranteed by the government?

Yes. Refundable Accommodation Deposits (RADs) paid to approved residential aged care providers are guaranteed by the Australian Government. If a provider goes out of business, the government will ensure the RAD is repaid. This guarantee does not apply to amounts paid to non-approved providers or for non-approved services.

What happens to the RAD when my loved one passes away?

The provider must refund the balance of the RAD (excluding retention amounts and any agreed deductions) to the estate upon receipt of probate, letters of administration, or other acceptable evidence. The accommodation agreement must clearly state this, along with the refund timeline. If the provider delays the refund unreasonably, this can be raised with the Aged Care Quality and Safety Commission.

Can the provider increase my fees during my stay?

Government-set fees — such as the Basic Daily Care Fee — are indexed by the government and increase automatically in line with Age Pension changes. Means-tested fees (HSC, NCCC) are recalculated if your income or assets change. The agreed room price stays fixed for as long as you remain in the same room. The Higher Everyday Living Fee is indexed annually on 1 July in line with CPI. Any other fee changes require your agreement in writing — the provider cannot unilaterally increase fees outside these frameworks.

What if I am unhappy with something in the agreement?

Raise it with the provider before signing and ask for it to be amended. Providers should be willing to discuss clauses that are unclear or concerning — and in many cases, standard template agreements can be adjusted. If the provider refuses to discuss or amend a clause you believe is unreasonable or unlawful, seek independent legal advice. You can also contact OPAN on 1800 700 600 or Seniors Rights Service for guidance. Do not sign anything you are not comfortable with.

Conclusion: Take Your Time, Get It Right

The aged care service and accommodation agreements are among the most financially and legally significant documents an older Australian and their family will ever sign. They govern the care your loved one will receive, the money that will change hands, the conditions of their occupancy, and their rights if something goes wrong. Getting them right is not a bureaucratic nicety — it is one of the most important acts of care and advocacy you can perform at an extraordinarily stressful time.

The 2025–2026 aged care reforms have brought significant changes to these agreements — new fee structures, RAD retention rules, the replacement of Additional/Extra Services with Higher Everyday Living agreements, and the transition from resident agreements to service agreements under the Aged Care Act 2024. Families navigating these agreements for the first time — or reviewing updated agreements for existing residents — are doing so in a more complex landscape than ever before.

Take the time you need. Ask questions. Use your 14-day cooling-off period if you need it. Seek independent financial and legal advice before making accommodation payment decisions. Know the red flags. Know your rights. And remember that a good provider — one genuinely committed to quality care and transparency — will welcome your questions rather than be troubled by them.

If you are looking for a residential aged care provider in Queensland that approaches agreements, fees, and care with the transparency and genuine commitment that families deserve, Superior Care Group is one of Queensland’s leading aged care providers, with renowned residences in Redland City and on the Gold Coast.

Superior Care Group is family-owned and operated — a distinction that shapes how they approach every aspect of their relationship with residents and families, including the agreement process. Family ownership means that the people responsible for the care and wellbeing of every resident are personally invested in getting every detail right. Superior Care Group has been living that commitment since 1979, when they opened Wellington Park Private Care in Redland City — Our founding residence and the beginning of more than four decades of dedicated, personalised aged care. In 2011, we extended that commitment to the Gold Coast with the opening of Merrimac Park Private Care.

At Superior Care Group, the service agreement process is approached as the beginning of a genuine partnership — not a formality to be rushed. Our experienced team takes the time to walk families through every element of the agreement, answer every question, and ensure that every resident and their family understands exactly what they are agreeing to and why. Our personalised, tailored care plans reflect each resident’s individual needs, preferences, and circumstances — and are reviewed and updated as those needs evolve.

To learn more, or to begin a conversation about care for yourself or your loved one, visit www.superiorcare.com.au.