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What Is the Maximum Means Tested Fee for Aged Care? Your Complete 2026 Guide

Author diannemaex

Published on: April 22, 2026

19 minutes read

When a loved one needs to move into residential aged care, one of the first questions families ask is: what is the maximum means tested fee for aged care, and could we end up paying it? It is a fair and important question — and one that deserves a clear, honest answer rather than a wall of government jargon.

The means tested care fee is not a fixed charge. It is personalised, based on your income and assets, and it is capped by law so that no-one pays more than a set limit per year or over their lifetime. But since 1 November 2025, Australia’s aged care fee system underwent its most significant reform in a decade. Depending on when your loved one enters residential care, entirely different rules — and different fee names — now apply.

This guide cuts through the complexity. Whether your family is planning ahead, helping a parent transition into care right now, or trying to understand a fee advice letter that landed in the post, you will find everything you need here. We explain what is the maximum means tested fee for aged care under both the old and new systems, how the calculation actually works, what the caps mean in practice, and how to manage costs sensibly.

What Is the Means Tested Care Fee in Aged Care?

The means tested care fee is an additional daily contribution that some residents pay in permanent residential aged care toward the cost of their personal and clinical care. It is charged on top of the basic daily fee that every resident pays, and it is not a flat amount — it is calculated individually by Services Australia based on your specific income and assets.

The idea behind it is straightforward: the Australian Government subsidises a significant portion of aged care costs for everyone, but those who have the financial means to contribute more are asked to do so. Those with modest incomes and limited assets — particularly full Age Pensioners — typically pay little or nothing toward this fee. Those with higher incomes or significant assets will pay more, up to the regulated maximum.

Importantly, the means tested care fee only applies to the cost of personal and clinical care — things like nursing support, allied health services, and personal assistance with daily living. It does not cover your accommodation (your room) or lifestyle extras. Those costs are separate.

And there is a critical distinction many families miss: the means tested care fee, as it has traditionally been known, now only applies to residents who entered residential care before 1 November 2025. For anyone entering care from that date onwards, the government has replaced it with two new contributions under a reformed fee structure. Both the old and new systems are explained in full below.

Which Fee System Applies to You? Old vs New Aged Care Rules

Before diving into the numbers, it is essential to determine which set of rules applies to your situation. Getting this wrong — and using figures from the wrong system — can lead to real miscalculations in financial planning.

If you are unsure which arrangement applies, your Services Australia fee advice letter will state it clearly. If you have not yet received one, contact Services Australia on 1800 227 475 or visit a service centre with your identification.

The Old System: What Is the Maximum Means Tested Fee for Aged Care? (Pre-1 November 2025)

For the many thousands of Australians who entered residential aged care before 1 November 2025, the means tested care fee remains the applicable contribution. Here is a thorough explanation of how it works, including the current 2026 caps and calculation method.

The Annual and Lifetime Caps (March 2026)

The single most reassuring thing to understand about the means tested care fee is that it is capped. No matter how high your income or assets, there is a legal limit on how much you can ever be asked to pay. As at 20 March 2026, these caps are:

• Annual cap: $35,910.43 per year — once you reach this amount in any given care-anniversary year, your means tested care fee drops to zero for the remainder of that year
• Lifetime cap: $86,185.23 — once you have paid this cumulative amount across your entire time in aged care, you will never be asked to pay means tested care fees again

Both caps are indexed by the Australian Government every March and September in line with wages growth and the Consumer Price Index. Services Australia will notify you — and your aged care provider — in writing when you are approaching and when you reach either cap.

How Is the Means Tested Care Fee Calculated?

The means tested care fee is worked out by Services Australia using what is called a Means Tested Amount (MTA). This is a daily figure calculated from your income and assets. Services Australia then compares your MTA against the cost of your care, and you pay whichever is lower — subject to the annual and lifetime caps above.

The MTA is the sum of two separate calculations: an income tested amount and an asset tested amount. Here is how each works for a single individual using current March 2026 thresholds.

Step 1 — The Income Test

Services Australia looks at your assessable annual income and compares it to the income free area (currently $35,313.20 per year for singles, or $34,034 for illness-separated couples). If your income exceeds this threshold, 50% of the excess is divided by 364 to produce a daily income tested amount.

A key concept here is deeming. The government does not use the actual interest or return you earn on financial assets. Instead, it applies a set deemed rate — currently 0.25% on the first portion of assets and 2.25% on amounts above that. This means the income test result is based on what the government assumes your money earns, not what it actually earns.

Step 2 — The Asset Test

Your assessable assets are calculated and measured against three threshold bands (March 2026 figures for singles):

• 17.5% of assets between $64,500 and approximately $206,000, divided by 364
• 1% of assets between approximately $206,000 and $497,000, divided by 364
• 2% of assets above approximately $497,000, divided by 364

Step 3 — The Means Tested Amount

The daily income tested amount and daily asset tested amount are added together to give your Means Tested Amount. Services Australia then compares this against the Maximum Accommodation Supplement Amount (currently $70.94 per day) and the actual cost of your care. Your means tested care fee is the lowest of these three figures — and it can never exceed the daily rate that corresponds to the annual cap.

What Counts as Assessable Income and Assets?

Understanding what Services Australia counts — and what it does not — is one of the most practical things families can know before entering aged care.

Assessable Income typically includes:

• Age Pension and other government income support payments
• Superannuation income streams (including account-based pensions — subject to deeming)
• Deemed income from financial investments such as bank accounts, shares, and managed funds
• Rental income from investment properties
• Overseas pensions or income from foreign sources

Assessable Assets typically include:

• Financial assets: bank accounts, shares, term deposits, managed funds, superannuation in the accumulation phase
• Investment properties (at net market value)
• Vehicles, boats, caravans, and other personal property
• Your family home — a capped amount of $214,884.00 (as at 20 March 2026) or the net market value of the home, whichever is lower, is included if you keep the home and it is not occupied by a protected person
• Gifted assets above $10,000 in the past financial year, or $30,000 over the past five financial years, are counted as deemed financial assets

Assets that are excluded include:

• Your family home, if a protected person lives there — this includes a carer eligible for income support who has lived with you for at least two years, or a close relative on income support who has lived with you for at least five years
• Funeral bonds (up to a capped amount)
• Special disability trusts
• National Redress Scheme payments (from 1 January 2025)

Real-Life Examples: Calculating the Means Tested Care Fee

The following examples are illustrative and based on current 2026 thresholds. Always obtain a formal assessment from Services Australia for your actual figures.

Example 1: Full Age Pensioner With Modest Assets

Margaret is a single resident who receives the full Age Pension ($30,642 per year) and has $45,000 in a bank account. Her home has been sold and the proceeds used to pay for accommodation.

• Income ($30,642) is below the income free area ($35,313.20) — income tested amount: $0
• Assets ($45,000) are below the lower asset threshold ($64,500) — asset tested amount: $0
• Means Tested Amount: $0 per day
• Margaret pays only the basic daily fee of $65.55 per day

This is the experience of many full pensioners in Australia. The means tested care fee applies only to those whose income and assets exceed the thresholds — and most residents with modest means pay nothing.

Example 2: Partial Pensioner With A Modest Property Portfolio

Robert is a single resident on a partial Age Pension. His assessable annual income is $44,000 (including deemed income from a $300,000 term deposit). His assessable assets total $288,555.

• Income tested amount: 50% x ($44,000 – $35,313) / 364 = approximately $11.93 per day
• Asset tested amount: [17.5% x ($206,000 – $64,500) + 1% x ($288,555 – $206,000)] / 364 = approximately $70.97 per day
• Means Tested Amount: $11.93 + $70.97 = $82.90 per day
• His means tested care fee is the lower of his MTA and the cost of care — he will likely pay close to the full MTA
• At this rate, Robert would reach the annual cap of $35,910.43 in approximately 434 days, or roughly 14 months

Example 3: Self-Funded Retiree With Significant Assets

Patricia is a self-funded retiree with annual income of $80,000 and assessable assets exceeding $900,000. She enters care under the old system.

• Her Means Tested Amount will almost certainly exceed the cost of care
• She will be charged up to the maximum daily rate and will hit the annual cap of $35,910.43 within the year
• Over time, she will reach the lifetime cap of $86,185.23 — at which point her means tested care fee stops permanently
• At the maximum annual rate, she would reach the lifetime cap in approximately 2.4 years

The New System: What Replaced the Means Tested Care Fee From 1 November 2025?

From 1 November 2025, the Australian Government introduced the most significant overhaul of residential aged care funding in more than a decade. For anyone entering permanent residential care from this date, the means tested care fee no longer applies. In its place, two new means-tested contributions have been introduced.

Understanding these changes is essential for any family planning for aged care in 2026 and beyond.

1. The Hotelling Contribution

The hotelling contribution covers the everyday “hotel-style” costs of living in an aged care home — meals, cleaning, laundry, heating, and cooling. Think of it as your contribution toward the running of the household you now live in.

• Daily cap: $22.15 per day
• Who pays it: Residents whose income and/or assets exceed set thresholds. Residents with assets above approximately $290,453 will pay the maximum hotelling contribution.
• Full pensioners: Typically pay little or nothing
• No lifetime cap applies — this is an ongoing daily contribution for as long as you remain in care
• It is indexed every March and September

2. The Non-Clinical Care Contribution (NCCC)

The NCCC is the closest equivalent to the old means tested care fee under the new system. It covers non-clinical personal care services — bathing, dressing, mobility assistance, continence care, and lifestyle activities. Clinical care costs (nursing, medical treatment) are fully funded by the government for all residents under the new system.

• Daily cap: $107.32 per day
• Lifetime cap: $137,917.01 or 4 years of cumulative contributions — whichever comes first
• The NCCC only applies if you are already paying the full hotelling contribution
• Once you reach the lifetime cap or have paid for 4 years, the government pays all non-clinical care costs — you stop paying the NCCC entirely
• Fees paid through the Support at Home programme count toward the NCCC lifetime cap

Side-by-Side Comparison: Old System vs New System

Other Aged Care Costs: What the Means Tested Fee Does Not Cover

One of the most common points of confusion for families is assuming that the means tested care fee is the main — or only — cost of aged care. In reality, it is one component of a broader cost structure. Understanding all the pieces helps families plan with real confidence rather than unpleasant surprises.

Basic Daily Fee

Every single person in permanent residential aged care pays the basic daily fee, regardless of their income or assets. It is set at 85% of the single basic Age Pension and is currently $65.55 per day (approximately $23,926 per year). This is indexed every March and September alongside the pension. Even if your means tested care fee is zero, the basic daily fee still applies.

Accommodation Costs (RAD and DAP)

Accommodation costs cover your room in the aged care home and are separate from care fees entirely. You have three options for paying accommodation:

• Refundable Accommodation Deposit (RAD): A lump sum paid upfront. The average RAD across Australia is approximately $470,000, though it varies significantly by location and facility. The maximum RAD that can be charged without prior approval is $758,627. The RAD is refunded when you leave or pass away — though from 1 November 2025, providers may retain up to 2% of the RAD per year (up to 10% over five years).
• Daily Accommodation Payment (DAP): A non-refundable daily fee equivalent to the interest on the RAD, calculated using the Maximum Permissible Interest Rate (currently 7.96% as at April 2026). For example, a room with a $500,000 RAD would have a DAP of approximately $109 per day.
• A combination of both.

If your income is below $35,313.20 and your assessable assets are below $64,500, the Australian Government will pay your full accommodation costs. You will not pay a RAD or DAP.

Higher Everyday Living Fee

Some aged care homes offer additional services — premium meals, enhanced activities, private rooms with extra amenities — and may charge a higher everyday living fee for these. This cannot be required before you enter care, and you must choose to agree to it in writing after entering.

How the Means Tested Fee Interacts With Home Care Package Fees

If your loved one received a Home Care Package before moving into residential care, the fees they paid during that time may already count toward the aged care caps. This is an area that catches many families off guard — and it can make a significant difference to how quickly a cap is reached in residential care.

• Old system residents: Any income tested care fees paid during a Home Care Package before 1 November 2025 count toward both the annual cap ($35,910.43) and the lifetime cap ($86,185.23) for means tested care fees in residential aged care.
• New system residents: Contributions paid through the Support at Home programme count toward the NCCC lifetime cap of $137,917.01.
• The “No Worse Off” principle: If you were approved for a Home Care Package on or before 12 September 2024, you are protected. Even if you enter residential care after 1 November 2025, you will be assessed under the older, more favourable 1 July 2014 fee arrangements — not the new system.

Can the Means Tested Care Fee Change After You Enter Care?

Yes — and this is important to understand. The means tested care fee is not locked in the moment you enter an aged care home. It can go up or down over time for several reasons:

• Changes to income: If your pension changes, a superannuation income stream begins or ends, or you start receiving rental income, your assessed income changes and your fee may be recalculated.
• Changes to assets: Selling the family home, receiving an inheritance, accessing superannuation, or significant changes in investment values will affect your assessable assets and therefore your fee.
• Regular indexation: The fee thresholds, caps, and the basic daily fee are all updated in March and September each year. Your fee may shift slightly with each indexation.
• Reaching a cap: When you hit the annual cap, your fee drops to zero until the next anniversary. When you reach the lifetime cap, it stops permanently.

You are legally required to notify Services Australia of any significant changes to your income or assets. If you fail to report a change that increases your assessable means, you may end up with a debt owed to Services Australia. Conversely, if your circumstances improve — say you sell an investment property and move the proceeds into the RAD — your fee may decrease.

You also have the right to request a review of your assessment if you believe it is incorrect. Services Australia is a separate organisation from My Aged Care and can be contacted on 1800 227 475.

Practical Tips for Managing the Maximum Means Tested Fee for Aged Care

Knowing what the maximum means tested fee for aged care is in 2026 is one thing. Managing it wisely is another. These practical steps can help your family navigate costs without stress.

1. Complete the means assessment — even if you think you won’t pay much. Some families skip the assessment assuming they won’t pay the means tested fee. If you don’t complete a means assessment, Services Australia can charge you at the maximum rate. Always get assessed, even if the result is a zero fee.
2. Use the My Aged Care Fee Estimator first. Before choosing a facility or committing to anything, use the free fee estimator at myagedcare.gov.au. It gives you a reasonable estimate based on your income and assets, covering both old and new system scenarios.
3. Submit the means assessment paperwork early. Processing takes time — sometimes several weeks. Providers can charge interim fees while waiting for the formal assessment, so the sooner you submit, the sooner you get accurate figures.
4. Understand the two forms you may need: SA457 (if you do not receive a means tested income support payment) and SA485 (if you’re on a means tested pension and you own property). Both are managed by Services Australia.
5. Report changes promptly. A change in income, a property sale, an inheritance, or a shift in superannuation arrangements can all affect your fee. Report them to Services Australia as soon as they occur to avoid either overpaying or accumulating a debt.
6. Track your cumulative contributions. If your loved one has been in home care for some years, their paid fees may be significantly closer to the lifetime cap than you realise. Ask Services Australia for a running total.
7. Seek advice from an accredited aged care financial adviser. The fee calculation — particularly under the new post-November 2025 system — is genuinely complex. A qualified aged care specialist can model multiple scenarios for your family’s specific situation and may identify legitimate strategies to manage costs, such as the timing of asset decisions or understanding gifting rules.
8. Know your rights around fee caps. Providers are legally prohibited from charging means tested care fees more than one month in advance. If fees are ever overcharged, you are entitled to a refund.

Frequently Asked Questions About the Means Tested Care Fee

What is the maximum means tested fee for aged care in 2026?

Under the old system (for residents who entered care before 1 November 2025), the maximum means tested fee for aged care is $35,910.43 per year and $86,185.23 over a lifetime as at 20 March 2026. Under the new system (for residents entering from 1 November 2025), the Non-Clinical Care Contribution is capped at $107.32 per day and $137,917.01 over a lifetime or 4 years, whichever comes first. The hotelling contribution adds up to $22.15 per day on top of that.

Is there a cap on the aged care means tested fee?

Yes, absolutely. This is one of the most important consumer protections in the Australian aged care system. Under the old system, both an annual cap ($35,910.43) and a lifetime cap ($86,185.23) apply. Once you reach the annual cap, your fee drops to zero until your care anniversary. Once you reach the lifetime cap, you never pay a means tested care fee again. Under the new system, the NCCC has a daily cap and a lifetime cap (the lesser of $137,917.01 or 4 years).

What aged care fees are means tested?

Under the old system: the means tested care fee is means tested. Under the new system: both the hotelling contribution and the non-clinical care contribution (NCCC) are means tested. The basic daily fee ($65.55 per day) is not means tested — everyone pays it regardless of financial circumstances.

How is the means tested care fee calculated?

Services Australia calculates your Means Tested Amount (MTA) by combining an income tested amount and an asset tested amount. The income test takes 50% of your income above the income free area (currently $35,313.20 for singles). The asset test applies percentage rates to your assessable assets above certain thresholds. The two amounts are added together to give a daily MTA, which is compared against the cost of your care — you pay the lower of the two, subject to the annual and lifetime caps.

What are the aged care means test limits in 2026?

The key thresholds for the old system (March 2026) are: income free area of $35,313.20 per year for singles; lower asset threshold of $64,500 (below which no fee applies); mid-tier asset band up to approximately $206,000 (assessed at 17.5%); upper band up to approximately $497,000 (assessed at 1%); and assets above that assessed at 2%. The family home is included at a capped value of $214,884.00 if kept. All figures are indexed twice yearly.

What is the maximum means tested care fee per day?

Under the old system, the means tested care fee is capped annually rather than daily. The daily maximum is effectively bounded by the annual cap of $35,910.43, which works out to approximately $98.38 per day if paid every day for 365 days. Under the new system, the NCCC has an explicit daily cap of $107.32 per day, and the hotelling contribution is capped at $22.15 per day.

Can I have my residential aged care fee reviewed?

Yes. If your financial circumstances change — a property sale, an inheritance, a change in superannuation income, the death of a partner — you can and should notify Services Australia and request a reassessment. Your means tested care fee may be reduced or increased as a result. Services Australia also conducts its own regular reviews. You can contact them on 1800 227 475 or visit servicesaustralia.gov.au.

Does the means tested fee apply to home care packages?

An income tested care fee applied to Home Care Packages under the old system (before 1 November 2025). This was a similar but separate calculation. Importantly, any income tested fees paid during a Home Care Package count toward the annual and lifetime caps for means tested care fees in residential aged care — so the clock does not reset when you move from home care to residential care.

What happens when my loved one reaches the annual cap?

When the annual cap is reached, the means tested care fee is set to zero for the remainder of that care-anniversary year. It restarts on the next anniversary of the date they first entered residential aged care. Services Australia will notify you and your provider in writing when this happens. You cannot pay the means tested care fee in advance to reach the cap faster.

Is there an aged care means test calculator I can use?

Yes. My Aged Care provides an official fee estimator at myagedcare.gov.au that allows families to estimate their likely contributions under both old and new fee arrangements. It is a good starting point, though it provides an estimate only — actual fees are confirmed after a formal means assessment by Services Australia. Aged care financial advisers can also model detailed scenarios using current thresholds.

Not everyone pays the maximum — is that right?

That is correct. The vast majority of aged care residents pay well below the maximum means tested care fee. Most full Age Pensioners with modest assets pay nothing toward the means tested care fee at all. Only residents with income or assets above the relevant thresholds contribute, and only those with the highest means will pay at or near the annual cap. The system is designed to be proportional and capped.