Quick price summary: Aged Care Facilities in Melbourne (2026)
- Low end: $60–$80 per day (basic daily fee only, government-subsidised room)
- Mid-range: $100–$250 per day (basic daily fee plus means-tested care fee and modest DAP)
- High end / enterprise: $300–$600+ per day (premium rooms, extra services, high RAD or DAP)
Prices in AUD. Last updated 2026.
Residential aged care in Melbourne covers accommodation, meals, personal care, nursing support, and a range of optional lifestyle services. Costs are split across several distinct fee types set or regulated by the Australian Government, which means the total amount any one resident pays depends on their individual financial circumstances rather than a single advertised price. Understanding each fee component separately is the clearest way to work out what a specific facility will actually cost.
Costs vary because the aged care fee structure is means-tested. Two residents in the same room at the same Melbourne facility can pay very different amounts based on their income, assets, and how they choose to structure their accommodation payment. Government subsidies cover a significant portion of care costs for eligible residents, but accommodation and some additional services remain largely self-funded. The income and asset assessment conducted by Services Australia (Centrelink) is the single most important step in understanding what you or a family member will pay.
What Do Aged Care Facilities Cost in Melbourne?
The basic daily fee applies to all residents regardless of financial situation and is set at 85% of the single age pension. In 2026, this sits at approximately $63–$66 per day, or roughly $23,000–$24,000 per year. On top of this, residents who can afford to contribute more pay a means-tested care fee (MTCF), which is calculated by Services Australia based on income and assets. The MTCF has an annual cap of around $35,313 and a lifetime cap, after which the government covers the remaining cost of care.
Accommodation costs are the most variable component. Melbourne aged care homes set their own room prices, subject to government approval for rooms priced above the published threshold. In practice, standard rooms in Melbourne facilities are priced between $350,000 and $470,000 as a Refundable Accommodation Deposit (RAD), with premium rooms at larger facilities reaching $650,000 to $800,000 or more. Residents who cannot afford or choose not to pay a lump sum instead pay a Daily Accommodation Payment (DAP), calculated using the Maximum Permissible Interest Rate (MPIR), currently around 8.38% per annum. A $470,000 RAD converted to a full DAP equates to approximately $108 per day.
Price Breakdown by Service Level
| Service Level | What You Get | Typical Price Range | Best For |
|---|---|---|---|
| Government-Supported | Shared or basic room, full nursing and personal care, meals, laundry. Accommodation cost partially or fully covered by government if income/assets are below threshold. | $63–$80 per day total | Residents who cannot afford a RAD and qualify for a government-funded accommodation contribution |
| Standard | Private room, standard furnishings, full care services, basic activities program. Resident pays RAD or DAP at mid-range room price. | $100–$180 per day total | Self-funded retirees with moderate assets, part-pension recipients |
| Premium | Larger private room, upgraded furnishings, enhanced lifestyle programs, additional optional services such as hairdressing, outings, and premium meals. | $180–$350 per day total | Residents seeking higher comfort and more services, with significant assets |
| High-End / Extra Service | Premium suites, hotel-style amenities, concierge-style support, extensive activity programs, specialised dining. Facilities in inner Melbourne or premium suburbs. | $350–$600+ per day total | Fully self-funded residents prioritising lifestyle, privacy, and a wide range of optional extras |
What Affects the Cost of Aged Care Facilities in Melbourne?
Income and Asset Assessment Outcome
The income and asset assessment conducted by Services Australia determines whether a resident pays the means-tested care fee and how much accommodation support, if any, the government contributes. Residents with assessable assets below approximately $59,000 may receive a refundable accommodation contribution (RAC) from the government, which partially or fully covers accommodation costs. Those with higher assets and income pay more of their own costs. Completing this assessment before entering a facility is essential, as the outcome directly sets most of the fees a resident will pay.
RAD Amount and Payment Choice
Residents can pay for accommodation as a lump sum RAD, a daily DAP, or a combination of both. The RAD is fully refunded when a resident leaves or passes away (subject to any agreed retention amounts). Paying a larger RAD reduces the DAP. Choosing to pay the full amount as a DAP means an ongoing daily charge calculated at the MPIR, which adds up significantly over a long stay. For a $550,000 room paid entirely as a DAP at the current MPIR, the daily charge exceeds $126 per day, or roughly $46,000 per year.
Facility Location Within Melbourne
Room prices vary noticeably between Melbourne’s inner suburbs and outer or regional areas. Facilities in Hawthorn, Kew, Brighton, or South Yarra commonly list RADs of $500,000 to $800,000. Facilities in outer suburbs such as Cranbourne, Werribee, or Pakenham typically list RADs of $350,000 to $470,000. The care quality standards apply equally across all registered facilities, so location reflects real estate costs rather than necessarily reflecting higher quality of care.
Level of Care Required
Residents requiring high nursing input, dementia-specific care, or specialist support services will typically access facilities with dedicated wings or programs for those needs. The government funds the clinical care component based on an ACFI (or current funding framework) assessment, so residents do not usually pay more for higher clinical needs. The cost difference in practice comes from the room price at specialist facilities, which are often priced at the higher end.
Optional and Extra Services
Many Melbourne aged care homes offer optional services beyond the standard care package. These can include hairdressing, podiatry, pay television, premium meals, outings, and specific activity programs. Fees for optional services are set by each facility and are not government regulated. Costs typically range from $10 to $50 per day in additional charges at mid-range facilities, and can be higher at premium homes. Residents can choose which optional services to take up and should request a full schedule of optional service fees before signing a resident agreement.
How to Get Accurate Quotes
- Complete the income and asset assessment through Services Australia (Centrelink) before approaching facilities. You can apply online via MyAgedCare or by phone. The outcome letter you receive gives you a personalised fee estimate that facilities use when calculating your total costs.
- Use the My Aged Care fee estimator at myagedcare.gov.au to get an indication of your means-tested care fee and whether you qualify for any government-funded accommodation support before contacting facilities directly.
- Contact facilities directly and request a written schedule of their room prices (RAD amounts), the equivalent DAP for each room, their additional and optional service fee schedule, and any RAD retention arrangements they apply.
- Ask each facility to provide a draft resident agreement before you commit. This document sets out all fees, payment arrangements, and what services are included in the basic daily fee versus charged separately.
- Speak with an aged care financial information service (FIS) adviser, available free of charge through Services Australia, or engage a private aged care financial adviser before signing anything. The difference between paying a RAD versus a DAP, or a combination, can have significant long-term financial implications for a resident and their family.
Red Flags to Watch Out For
- Facilities that are unwilling to provide a written schedule of all fees upfront, including optional services, before you visit or commit. Transparent pricing is a legal requirement under the Aged Care Act.
- Verbal assurances about fees that differ from what is in the written resident agreement. The agreement is the legally binding document, not anything discussed over the phone or during a tour.
- RAD amounts quoted without a corresponding DAP equivalent. You are entitled to know the exact daily cost if you choose not to pay the lump sum.
- Facilities that pressure families to sign a resident agreement quickly, particularly if a placement follows a hospital discharge. Taking several days to review the agreement and seek independent financial advice is entirely reasonable and your legal right.
- Advertised “all-inclusive” fees that, on closer inspection, exclude personal care items, continence products, or specific therapy services that your family member requires. Check what is and is not covered in the basic daily fee.
- Unusually low room prices (RADs well below the local market rate) at facilities with recent government compliance notices or poor Aged Care Quality and Safety Commission audit outcomes. Price alone is not a reliable indicator of quality, but significant underpricing combined with poor inspection records warrants investigation.
Frequently Asked Questions
How much do aged care facilities cost in Melbourne on average?
Most Melbourne residents in aged care pay between $100 and $250 per day in total fees, combining the basic daily fee (around $63–$66 per day), a means-tested care fee where applicable, and either a RAD or a DAP for accommodation. Residents in government-supported accommodation with low income and assets may pay as little as $63–$80 per day. Residents in premium inner-Melbourne facilities with high RAD amounts or full DAPs can pay $350 or more per day. The specific figure depends on your income, assets, the facility you choose, and the room price.
Why are some aged care facilities prices so much cheaper?
Some facilities are cheaper because their room prices (RADs) reflect lower Melbourne suburban land values, their buildings are older or less recently renovated, or they offer fewer optional services. Government-subsidised facilities that accept a high proportion of supported residents operate on tighter margins and often have simpler room offerings. Cheaper daily costs are not automatically a sign of lower care quality, as clinical care standards are regulated nationally, but it is worth checking the facility’s most recent Aged Care Quality and Safety Commission assessment results regardless of price.
Is it worth paying more for aged care facilities in Melbourne?
Paying more typically buys a larger or more comfortable room, a wider range of lifestyle and social activities, more generous staffing ratios for personal care tasks, and a more hotel-like physical environment. Clinical nursing care is required to meet the same national standards at every registered facility. For residents who will spend the majority of their time in their room or in common areas, a more comfortable physical environment can make a meaningful difference to quality of life. Whether the additional cost is justified depends on the resident’s personal preferences, how long they are likely to remain in care, and what assets are available to fund it without compromising a surviving spouse’s financial security.
Getting the aged care fee structure right from the start saves families from costly surprises. The basic daily fee, means-tested care fee, accommodation payment, and optional service fees each work differently and are each calculated or negotiated separately. Completing the Services Australia income and asset assessment early, requesting full written fee schedules from facilities, and seeking independent financial advice before signing a resident agreement are the three steps that make the biggest practical difference to what a Melbourne aged care placement actually costs over time.
