Few family conversations are harder than working out aged care for someone you love. It usually arrives suddenly, often from a hospital bed, and the financial side can feel overwhelming on top of the emotion. Good aged care financial advice takes that weight off your shoulders, helping you understand the costs, protect hard earned assets, and make calm, informed decisions when it matters most. It is the foundation of sound aged care financial planning.
This guide explains how aged care fees work, the big decisions around the family home and the Age Pension, and how planning early changes the outcome. It is a genuinely specialised field, so think of this as a clear starting point rather than a substitute for tailored advice on your own circumstances.
Why Aged Care Planning Matters
Around 85% of people enter aged care directly from a hospital, which means most families are forced to make major financial decisions in a hurry, under stress, and with little warning. That pressure often leads to selling assets quickly or paying more than necessary.
Early planning changes everything. When you understand the aged care system and the typical costs ahead of time, you can structure your finances and financial resources calmly, maximise pension entitlements, and avoid being rushed into selling the family home at the wrong moment. Even a single conversation before care is needed can save a great deal of money and worry.
Understanding Aged Care Costs And Fees
Aged care costs vary depending on the type of care and your financial situation, but it helps to know the main pieces. For residential aged care, there are a few core fees that make up most of the bill.
Accommodation Payments: RAD And DAP
The largest cost is usually accommodation. A facility may ask for a Refundable Accommodation Deposit (RAD), a lump sum that can reach up to around $400,000 and is fully refundable when the person leaves. Alternatively, you can pay a Daily Accommodation Payment (DAP), a daily rental-style fee, or a combination of both. How you fund this has a real effect on cash flow, so it is worth modelling the options.
Ongoing Care And Means-Tested Fees
On top of accommodation, there are ongoing fees. Basic daily care fees run to roughly $18,845 a year, and total residential care fees average around $29,335 annually once means-tested fees and any extra services fees for added comforts are included. Means-tested fees vary based on an income and assets assessment through Services Australia, so two people in the same aged care facility can pay very different amounts. Valuable resources like My Aged Care and Services Australia can help, but they rarely point to the best move for your situation.
Home Care Versus Residential Care
Not everyone needs to move into an aged care home. Many people stay in their own home for longer with the right help, and the costs differ significantly between home care and residential care. Government programmes such as the Commonwealth Home Support Programme and a Home Care Package can fund assistance with daily living expenses, personal care, and other aged care services, often at a fraction of residential costs.
The right path depends on the level of care required and how it may change. Aged care needs tend to increase over time, so a plan that covers both today’s associated costs and tomorrow’s is essential. A My Aged Care assessment is the starting point for either route, and it determines the government support you are eligible for.
The Family Home And The Age Pension
This is where good advice earns its keep. Deciding whether to keep, sell, or rent the family home is often the single biggest call a family faces, because it affects aged care funding and Age Pension entitlements at the same time.
The home is treated in particular ways for both aged care fees and the pension, and the right choice depends entirely on your situation. Selling may free up cash to pay a RAD but can reduce pension entitlements, while keeping or renting the home changes the calculation again. There is no one right answer, only the answer that fits your family, your cash flow, and your long-term wealth.
How An Aged Care Adviser Helps
Aged care financial advisers, sometimes called aged care specialists, do something most general financial advisers do not. They model multiple aged care options side by side, show you the financial implications of each, and structure your assets, savings, and financial products so you pay only what you must while keeping as much support flowing as possible.
A specialist aged care adviser will help you understand the fees and what you can genuinely afford, weigh the tax implications and any government subsidies, lay out your financial options in plain terms, and build a tailored plan that adapts as circumstances change. Good aged care advisers provide ongoing support across the whole aged care journey, and our clients tell us that expert advice at the right moment made all the difference to the best outcome for their family. The goal is a clear path forward and the confidence that comes with it, for both the person entering care and the family supporting them.
Get Your Legal And Estate Affairs In Order
Aged care planning is not only about fees. It is the right moment to make sure legal protections, such as an enduring Power of Attorney, are in place so someone can make financial decisions if needed. It is also wise to review your estate plan, so assets pass smoothly to beneficiaries later. These pieces work together, and sorting them early avoids painful complications down the track.
Case Study: An Albany Family Plans Ahead
An Albany family came to us when their mother was about to move from hospital into residential care. They were anxious, time-poor, and unsure whether to sell the family home to fund the accommodation.
We modelled three options side by side: paying a full RAD by selling the home, paying a DAP and keeping the home, and a blend of both. By keeping the home and renting it, while paying part of the accommodation as a DAP, their mother kept more of her Age Pension and the family preserved an asset for the future. We coordinated the means assessment with Services Australia and mapped the ongoing costs year by year. They moved from panic to a clear, affordable plan within a fortnight.
Frequently Asked Questions
These are the questions families ask us most about aged care finances. Anything else, just ask.
What Does Aged Care Actually Cost?
It depends on the care and your means, but as a guide, basic daily care fees are about $18,845 a year, total fees average around $29,335 annually, and a Refundable Accommodation Deposit can reach roughly $400,000. Means-tested fees vary with your income and assets, so the real figure is personal to you.
Should We Sell The Family Home?
Not always. Selling can fund a RAD but may reduce Age Pension entitlements, while keeping or renting the home changes both your cash flow and your pension. It is one of the most important decisions in aged care planning, and one worth modelling carefully before you act.
When Should We Get Aged Care Advice?
As early as possible, ideally before care is urgently needed. Since most people enter care straight from hospital, planning ahead avoids rushed decisions and gives you time to structure assets, maximise pension entitlements, and choose the right aged care facility.
Plan With Confidence, Not Under Pressure
Aged care is one of life’s most stressful transitions, but the financial side does not have to be. With the right advice, you can understand the costs, protect the assets your family has worked hard for, and make decisions calmly and with confidence rather than under pressure in a hospital corridor.
If you are facing these choices for yourself or a loved one, our Perth team is here to help you navigate the process, manage the costs, and build a plan that fits within your broader financial planning. Book a consultation today, and let us bring clarity to a daunting task, so you can focus on what truly matters: the wellbeing of the people you care about.
