Income and Assets Assessment in Aged Care

An income and assets assessment is a detailed review of your financial situation, conducted by Services Australia or the Department of Veteran’s Affairs (DVA). It determines whether you you’ll need to pay means-tested contributions and whether the government will help cover your aged care accommodation and service costs.

How aged care means test assessments work

The assessment evaluates your income and assets to determine how much you contribute towards your aged care stay. This process helps ensure those with greater financial resources contribute more, while those with less pay less. 

Here's a breakdown of how it works:

Who needs an assessment?

Anyone considering entering permanent residential aged care will need to complete an income and assets assessment unless they choose to pay the maximum fees 

 

What's assessed?

• Income: This includes pensions, superannuation, investments and rental income. For couples, half of the combined income is assessed.

• Assets: This includes savings, vehicles, investments, other valued possessions and property. The family home is excluded from the asset assessment if a protected person lives there (such as a spouse or dependent). If no protected person resides in the home, its value may be included, subject to a capped amount.

 

The process

1. • Application: Complete the Aged Care Calculation of your cost of care form (SA486) for an assessment through Services Australia via My Aged Care.
     
     
   • Details: You'll need to provide details about your income and assets. Services Australia may also access your Centrelink information.
     
     
   • Assessment: Your contribution is calculated and you’ll receive a fee advice letter outlining your fees.
2.  

The result

The assessment determines two things:

• Accommodation contribution: This is the amount you may need to contribute towards the daily cost of your accommodation. The government may contribute some or all of this based on your assessment outcome.
  
  
• Care contribution: An additional fee that some people may be required to pay towards their care costs. It's also determined based on your means assessment.

 

Assessment outcomes

There are three different categories of accommodation charges depending on your means assessment:

• Fully supported: The government will pay the full costs of your accommodation based on your income and assets assessment.
  
  
• Partially supported: The government covers some of the costs of your accommodation, and you contribute the rest.
  
  
• Self-funded: You pay the total costs of your accommodation.

 

Accommodation Payment Options

Your accommodation payment options include:

• Refundable Accommodation Contribution (RAC): is a lump sum payment made by residents who qualify for government support with their aged care accommodation costs. Under the Aged Care Act 2024, RAC’s are subject to retention deductions of up to 2% per annum, calculated daily and deducted monthly. Retentions are capped at five years, meaning the total deduction will not exceed 10% of the original RAC amount.

The Australian Government guarantees repayment of the remaining RAC balance if the provider becomes insolvent or is otherwise unable to refund the amount.

•    Daily Accommodation Contribution (DAC): A Daily Accommodation Contribution (DAC) is a non-refundable daily payment made by aged care residents who qualify for government-supported accommodation but are assessed as needing to contribute toward their room costs.
This payment is calculated based on:

     •    The agreed room price between the resident and the provider.
     •    The resident’s means assessment, which evaluates income and assets.
     •    The Maximum Permissible Interest Rate (MPIR) set by the Australian Government, which is reviewed quarterly.

The DAC is equivalent in value to the Daily Accommodation Payment (DAP) paid by residents who are not eligible for government support. However, DAC applies only to low-means residents who are partially supported—those who are fully supported do not pay a DAC.

• Combination payment: A Combination Payment allows you to pay for your aged care accommodation using a mix of:
  •    a Refundable Accommodation Deposit (RAD) or Refundable Accommodation Contribution (RAC) — a lump sum that is partially refundable when you leave care, and
  •    a Daily Accommodation Payment (DAP) or Daily Accommodation Contribution (DAC) — a non-refundable daily fee.

This option gives you flexibility. You can choose how much to pay upfront as a lump sum and how much to pay as a daily fee. The daily portion is calculated using the Maximum Permissible Interest Rate (MPIR) set by the Australian Government and reviewed quarterly.

These rules apply to residents who:

• Enter care on or after 1 November 2025, under the new fee arrangements.
• Re-enter care after a break of more than 28 days post-31 October 2025.
• Were on the national priority list or approved for home care as of 12 September 2024. [health.gov.au]

 

Income and assets assessments and payments

For more information on accommodation and living costs, visit our helpful aged care costs hub. You’ll also find resources on getting advice from a financial planner, respite care and long-term care.

Still need more information? Our friendly team is available and happy to help discuss payment options. Get in touch today at 1300 682 833.