Australian Aged Care Costs: $1.95m Deposits and $10k Monthly Fees 2026

The Australian aged care system has become a for-profit industry where families face staggering costs, including deposits up to $1.95 million and monthly fees of $10,000. This reality is reshaping how we plan for elderly care.

In Sydney's eastern suburbs, a 20-square-metre room in a residential aged care facility commands a deposit nearly double the median price of a one-bedroom apartment in the same area. The sales agent's casual mention of $1.95 million for a room, plus $10,000 monthly charges, highlights a system where property values and public funding intersect.

The True Cost of Aged Care in Australia

The aged care sector operates like a property business, with refundable accommodation deposits (RADs) often exceeding $1 million. These deposits are not purchases; they are refundable when the resident leaves or passes away, but the opportunity cost is significant. Monthly fees cover daily care, accommodation, and additional services, but the line between essential care and luxury extras blurs.

For families, the pressure is immense. When a loved one deteriorates in a hospital bed for months without therapies, the desperation to find a place leads to accepting exorbitant costs. One family shared how they were offered a 16-square-metre room for $995,000 plus daily fees, a “bargain” compared to the $1.95 million option.

Comparing Costs: Room Deposits and Monthly Fees

These figures illustrate the disparity within facilities, where even minor upgrades like new bathrooms inflate costs. The system prioritises property investment over care quality, leaving families to navigate a complex web of fees.

How to Navigate Aged Care Costs

Understanding the fee structure is crucial. The Australian government provides subsidies, but means testing determines how much you pay. The Means Tested Care Fee and accommodation supplement can reduce out-of-pocket expenses, but many facilities charge “hotelling fees” for non-clinical services like cleaning and meals.

• Compare multiple facilities and negotiate deposits.
• Seek independent financial advice on paying RADs.
• Check if the facility is accredited and its care quality rating.
• Ask about hidden charges like special services fees.

Families should also consider alternative options like home care packages, which may be more affordable and provide personalised support.

FAQ

The for-profit model of Australian aged care is a wake-up call. Families must be proactive, informed, and assertive to ensure their loved ones receive quality care without financial ruin.

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