> For the complete documentation index, see [llms.txt](https://knowledge.maica.com.au/maica-knowledge-base/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://knowledge.maica.com.au/maica-knowledge-base/residential-aged-care/residential-care-fee-types-explained.md).

# Residential Care Fee types explained

## Overview

A resident in permanent residential care can pay several different fees, each covering a different part of their care and accommodation. Which fees apply to a particular resident depends on their fee arrangement (the regime they entered care under), their means assessment, and the accommodation they choose. This article explains each fee type in plain terms so you can recognise what you are setting up and billing.

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The fee types available to a resident are driven by their fee arrangement. To understand the three arrangements and how a resident's arrangement is set, see [Understanding Fee and Accommodation Arrangements](/maica-knowledge-base/residential-aged-care/understanding-fee-and-accommodation-arrangements.md).
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## The Basic Daily Fee

The Basic Daily Fee is paid by every resident in both permanent and respite care, under every fee arrangement. It contributes to everyday living costs such as meals, cleaning, laundry, and utilities.

The maximum Basic Daily Fee is set at 85% of the single basic age pension and is indexed in March and September each year in line with pension changes. A small number of residents on older arrangements pay a non-standard rate (for example a higher protected rate), which Services Australia advises in the resident's fee advice letter.

## Means tested fees and contributions

Residents whose income or assets are above the relevant thresholds contribute towards their cost of care. The name of this contribution depends on the resident's fee arrangement.

| Fee arrangement     | Means tested fee                                          | Notes                                                                           |
| ------------------- | --------------------------------------------------------- | ------------------------------------------------------------------------------- |
| **Pre-1 July 2014** | Income Tested Fee                                         | Payable where the resident has been assessed as liable.                         |
| **1 July 2014**     | Means Tested Care Fee                                     | Subject to annual and lifetime caps set by Services Australia.                  |
| **1 November 2025** | Hotelling Contribution and Non-Clinical Care Contribution | Two separate contributions, each applying where the resident is means assessed. |

Where a resident pays a means tested fee, the government pays the remaining cost of their care. Where no means tested fee applies, the government pays the full cost of care. Services Australia advises the amounts in the resident's fee advice letter.

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Means tested fees are not charged in respite care. A respite resident pays only the Basic Daily Fee (and a booking fee, if one is agreed).
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## Accommodation payments and contributions

Accommodation costs apply to permanent residents only. Respite residents do not pay accommodation costs, because the government pays a respite accommodation supplement on their behalf.

How a resident pays for their accommodation depends on their means assessment.

### Residents who pay their own accommodation (not low means)

These residents pay the agreed room price. They can choose how to pay it:

* A **Refundable Accommodation Deposit (RAD)**, a lump sum covering the room price, refundable when the resident permanently leaves.
* A **Daily Accommodation Payment (DAP)**, a daily amount worked out from the room price and the maximum permissible interest rate.
* A **combination** of the two, where a part-lump-sum reduces the daily amount payable.

### Residents whose accommodation is government supported (low means)

These residents pay an accommodation contribution, with the government covering the rest through the accommodation supplement. They can pay via a **Refundable Accommodation Contribution (RAC)**, a **Daily Accommodation Contribution (DAC)**, or a combination of both.

### Retention and indexation

For residents on the 1 November 2025 accommodation arrangements, two further rules can apply to lump sum and daily accommodation amounts:

* **Retention** can be deducted from a lump sum deposit over the agreed retention period.
* **DAP indexation** adjusts the daily accommodation payment on 20 March and 20 September each year.

Neither retention nor DAP indexation applies under the 1 July 2014 accommodation arrangements.

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Lump sum deposits (RAD and RAC) are managed on the RAD/RAC tab, separately from day-to-day invoicing. See [Managing RAD/RAC Accommodation Deposits](broken://pages/9e2113aa11f52b2bf9a2162a269b892009fd4dcd).
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## Other fees and optional services

Beyond the core fees, a resident may agree to optional or situational charges.

| Fee                                            | When it applies                                                                                                                                                                                                         |
| ---------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Higher Everyday Living Fee (HELF)**          | An optional fee, from 1 November 2025, for services beyond the standard care list. It can only be agreed after entry, never as a condition of entry, and replaces the former Extra Service and Additional Service fees. |
| **Extra Service Fee / Additional Service Fee** | Older optional fees under pre-1 November 2025 arrangements. Existing agreements can continue until 31 October 2026.                                                                                                     |
| **Booking Fee**                                | A one-off fee a provider may charge to reserve a respite place. Its maximum is capped at the lesser of one week's Basic Daily Fee or 25% of the Basic Daily Fee for the proposed respite period.                        |

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A Higher Everyday Living Fee cannot be used as a condition of entry or to secure a room, and standing arrangements require a signed written agreement before the fee is activated.
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