New Aged Care Act 2026: fees, rights and what changed

Eight months into the new Aged Care Act, most Australian families dealing with a residential aged care home for the first time in 2026 are running the same conversation. The letter from Services Australia lists four separate charges, the accommodation quote from the provider lists two more, and the My Aged Care assessment paperwork uses vocabulary that did not exist a year ago. Non-Clinical Care Contribution. Hotelling Contribution. Higher Everyday Living Fee. Refundable Accommodation Deposit. The reform that commenced on 1 November 2025 is the biggest change to Australian aged care in over 25 years, and by mid-2026 the family sitting at the kitchen table with a fee schedule in one hand and an admission agreement in the other is finally seeing the full-year picture. This guide walks through what a resident now pays, what the Government keeps paying, the rights the new Act writes into law, and the questions to ask any provider before signing.

What the new Aged Care Act actually changed

The new Aged Care Act replaced the Aged Care Act 1997 on 1 November 2025 and is the primary piece of legislation governing residential aged care homes, home care and the regulator itself. Two structural changes matter most to families. First, the Act is rights-based, meaning a Statement of Rights sits at the front of the legislation and every provider is legally required to deliver services in a way that upholds those rights. Second, the Act separates aged care costs into two clean categories: clinical care, which the Australian Government funds in full, and everyday living plus non-clinical care, which the resident contributes to based on a Services Australia means assessment. Alongside the Act, the Support at Home program replaced the Home Care Packages Program and the Short-Term Restorative Care Programme on the same day, and the Commonwealth Home Support Program will move across no earlier than 1 July 2027. If a parent is looking at a residential aged care home in 2026, the Aged Care Act is the framework their contract sits inside.

The four fees a resident now pays in a residential aged care home

Under the new framework there are four possible charges on a resident's monthly statement, and every family should be able to name each one before signing an admission agreement. The Basic Daily Fee is a flat, everyone-pays contribution toward meals, laundry and utilities, set at 85 per cent of the single Age Pension and reviewed twice a year. The Non-Clinical Care Contribution is a means-tested payment toward personal care, lifestyle and daily living support, capped at a daily maximum and payable for a maximum of four years or up to a lifetime cap, whichever comes first. The Hotelling Contribution is a means-tested payment toward accommodation-related running costs such as cleaning, catering and general utilities beyond what the Basic Daily Fee covers. And an accommodation payment covers the room itself, quoted by the provider as a lump sum Refundable Accommodation Deposit, a Daily Accommodation Payment, or a combination of the two. A Higher Everyday Living Fee can be charged on top for genuinely additional services such as premium meal choices or a private hairdresser, but only where the resident has agreed in writing and the services are actually delivered. The full breakdown, updated each quarter, sits on the My Aged Care fees page, and any figure a provider quotes should reconcile to that page.

What the Government still pays for

The single most reassuring fact for a family working through a 2026 fee estimate is that clinical care remains fully Government funded. Nursing, medication administration, wound care, pain management, allied health assessments and end-of-life care delivered inside the residential aged care home are covered by the Australian National Aged Care Classification subsidy paid to the provider, not by the resident. If a provider tries to bill a resident for a clinical service, that is a red flag and it belongs in a complaint to the Aged Care Quality and Safety Commission. The distinction between clinical care and non-clinical care is one of the sharpest lines the new Act draws, and the Support at Home service list published by the Department of Health and Aged Care lists exactly which services fall on which side of the line. Our guide to assisted living vs nursing home walks through the equivalent US distinction, and the underlying logic is the same in both countries: the medically necessary services are funded, and the everyday living services are shared with the resident based on capacity to pay.

Understanding RADs, DAPs and the accommodation quote

Accommodation is quoted separately from care fees and it is the part of the paperwork families understand the least. A provider must publish the room's Refundable Accommodation Deposit, or RAD, on the My Aged Care service finder before a resident moves in, and the RAD is exactly what its name says: a lump sum, held by the provider, refunded in full to the resident's estate when they leave the home, guaranteed by the Australian Government. A resident can instead pay a Daily Accommodation Payment, or DAP, which is a daily rent calculated from the same RAD amount using a Government-set interest rate called the Maximum Permissible Interest Rate. A resident can also pay any combination, for example half the RAD as a lump sum with the remainder as a smaller daily DAP. The choice is the resident's, and a provider is not permitted to require a full RAD. From 1 November 2025, providers may also retain a small annual percentage of the RAD to help fund building maintenance, and that retention amount must be disclosed in writing before the deposit is paid. Every accommodation quote and every RAD figure ties back to the Services Australia means assessment, which is the form the family should complete before, not after, comparing providers.

The Services Australia means assessment and why to do it first

The single most useful thing a family can do before contacting a provider is complete the aged care means assessment with Services Australia. The assessment looks at the resident's income and assets, produces a means-tested amount, and that number drives every non-clinical fee a provider is allowed to charge. Without the assessment, providers default to charging the maximum daily rate, and the resident is billed at that rate until the assessment result flows through, which typically takes several weeks. The aged care fee estimator on My Aged Care gives an accurate indicative figure inside 10 minutes if the family has the resident's superannuation balance, home value and any investment property details on hand, and the full assessment is submitted on the Services Australia calculation of cost of care form. Two rules make a meaningful difference to the total. First, the former home is only counted as an asset if it is not occupied by a protected person such as a spouse, a dependent child or a carer who has lived there for at least two years. Second, an annual and lifetime cap apply to the Non-Clinical Care Contribution, and once a resident hits the lifetime cap they never pay a non-clinical care contribution again for the rest of their life.

Rights the Act writes into law

The Statement of Rights at the front of the new Act is a legally enforceable list, not a marketing brochure. It gives every person receiving Government-funded aged care the right to be treated with dignity and respect, to make decisions about their own care, to be consulted about the services they receive and any changes to their care plan, to receive services free of restrictive practices unless strict clinical criteria are met, to have a support person of their choosing present at meetings, to raise concerns without fear of losing their care, and to independent advocacy at any time. Restrictive practices, meaning chemical or physical restraint, are only lawful under the new framework where there is a documented behaviour support plan, informed consent from the resident or their substitute decision maker, and demonstrable evidence that less restrictive alternatives have been tried. The regulator publishes an annual compliance report on how providers are meeting these obligations, and the family experience mirrors what we describe in our guide to signs of elder abuse in nursing homes families miss, the residents whose rights are best protected are usually the ones whose families visit at irregular times and keep a written note of what they see.

How to get independent advocacy at any time

Every person receiving Australian Government funded aged care has a right to free, confidential and independent advocacy through the Older Persons Advocacy Network, known as OPAN. OPAN is funded by the Department of Health and Aged Care under the National Aged Care Advocacy Program, its advocates do not work for any provider, and its national line on 1800 700 600 connects a caller to their state-based member organisation the same business day in most cases. Families use OPAN for four recurring situations: pushing back on a fee increase that does not match the means assessment, negotiating a change to a care plan the resident does not agree with, raising a concern about restrictive practices, and preparing for a family meeting where the provider is likely to propose a discharge or a transfer to a higher care level. OPAN advocates cannot force a provider to do anything, but they know the Act, they know the local regulator, and their presence in a meeting changes the tone of the conversation the same way an ombudsman visit changes the tone of a US nursing home meeting. Where dementia is involved, Dementia Australia runs a parallel National Dementia Helpline on 1800 100 500 with specialist counsellors, and it is standard practice to use both services in the same week when a diagnosis is new.

What to check before you sign an admission agreement

By July 2026 the sector has been operating under the new Act long enough that good providers have their paperwork in order, and the ones that do not tend to reveal themselves in the admission pack. Ask for the current RAD published on the My Aged Care service finder and reconcile it to the figure in the contract. Ask for a line-by-line breakdown of any Higher Everyday Living Fee, including which services are included and how the resident can opt out later. Ask which room the RAD figure applies to, because a shared room and a single room in the same building can carry very different accommodation costs. Ask for a copy of the provider's most recent quality audit result and its current star rating from My Aged Care, which is the sector's public quality measure. Ask what happens to the Basic Daily Fee and the Hotelling Contribution during a hospital stay or a period of respite absence. And take the same care with contract review that our 12 red flags of a nursing home tour guide walks through for US buildings, the buildings that answer questions clearly on paper are almost always the ones that answer them clearly at the bedside three months later.

More from the blog

Industry analysis

The 2026 nursing home staffing crisis: what families actually need to know

Costs & funding

The hidden costs of nursing home care: 9 fees nobody mentions on the tour