Aged Care fees and payments – annual, time limited and lifetime caps 065-19103046

From 1 July 2014 the caps were introduced to limit how much a person pays in:

• means tested care fees (MTCF) for residential care
• income tested care fees (ITCF) for home care (1 July 2014 - 31 October 2025)

Care recipients will still have to pay the basic daily fee (BDF) and any accommodation payments for residential care. Annual (where applicable) and lifetime caps are subject to indexation.

Care recipients who were in residential care or receiving a home care package prior to 1 July 2014 continue to pay fees under their existing arrangements. The exception to this is when they have dmoved to another aged care service and opted in to the post 1 July 2014 means assessment scheme prior to 1 November 2025.

From 1 November 2025, pre-1 July 2014 residential care recipients can remain on their existing assessment scheme or opt in to post 1 November 2025 assessment scheme only. They cannot opt in to the post 1 July 2014 assessment and this does not apply for Support at Home. See Aged Care means assessment for more information.

Note: Annual caps for home care ceased from 1 November 2025. An annual cap that was applied prior to 1 November with an anniversary date after 1 November will be honoured. A care recipient will have Support at Home contribution rates applied from their anniversary date.

For current caps and fees, see the Resources page for a link to the Department of Health, Disability and Ageing's Schedule of Fees and Charges.

An annual cap is the maximum amount of the means tested care fees (MTCF) for residential care or the income tested care fees (ITCF) for home care (1 July 2014 - 31 October 2025) that a care recipient can be asked to pay over 12 months. The 12 month calculation period:

• commences from the date the care recipient first entered aged care (either home care or permanent residential care), or
• recommences on the anniversary of the first date aged care was received, even if the care type has changed or there has been a break in care, and
• includes any pre-entry leave for permanent residential care

Once a care recipient reaches their annual cap they do not pay any more MTCF/ITCF until the anniversary of their start date is reached. Their service provider will receive full care subsidies from the Australian Government for their care.

The annual cap amount is indexed on 20 March and 20 September each year and:

• resets on each anniversary of a care recipient’s start date
• is applied based on the effective cap amount at the date it is reached
• remains in place even if a care recipient changes providers or services of the same care type

If the care recipient changes care type:

• the accrual of fees will carry over and
• the new cap amount becomes applicable to the new entry

Example 1:

• the care recipient reaches the annual cap while in home care (prior to 1 November 2025)
• the care recipient then moves to residential care within 12 months of commencing home care
• as the residential annual cap is higher, the care recipient will recommence paying their MTCF until the residential cap amount is reached

Example 2

• the care recipient reaches the annual cap while in residential care
• the care recipient then moves to home care (prior to 1 November 2025) within 12 months of commencing residential care
• as the annual cap amount for residential care is higher, the home care annual cap will apply to the new entry
• the care recipient will not have to pay their ITCF until the anniversary date is reached

Example 3

• the care recipient pays their MTCF while in residential care
• the care recipient then moves to home care (prior to 1 November 2025) within 12 months of commencing residential care
• the care recipient’s accrual of MTCF is below the residential annual cap but is higher than the home care annual cap
• the home care annual cap will apply to the new entry and the care recipient will not have to pay their ITCF until the anniversary date is reached

Once a care recipient reaches their annual cap, they do not pay any more MTCF/ITCF until the anniversary of their start date is reached. Their service provider will receive full care subsidies from the Australian Government for their care.

Care recipients will still have to pay the basic daily fee (BDF) and where applicable, any accommodation payments.

When the service provider lodges their claim and it is approved, this will calculate the annual caps reached in that month. When this happens:

• an annual cap letter is issued to the care recipient, nominee (where relevant) and the service provider
• Aged Care Staff Portal (ACSP) and ACMPS will display an annual cap date and show that the MTCF/ITCF has been reduced to $0 until their anniversary date
• Any adjustment owing to the care recipient is calculated as part of the near real time fee updates and paid with the next monthly claim the service provider lodges

Post 1 July 2014 assessment scheme

A care recipient's means tested care fees (MTCF) or income tested care fees (ITCF) continue to accrue for any period in care. Once a care recipient reaches their lifetime cap they will not have to pay any MTCF/ITCF for the remainder of their time in care. This is regardless of the care type.

When the service provider lodges their claim and it is approved, this calculates their lifetime caps reached in that claim month. When this happens:

• a lifetime cap letter is issued to the care recipient, nominee (where relevant) and the service provider
• ACSP and ACMPS will display a lifetime cap date and show that the MTCF/ITCF has been reduced to $0
• adjustments owing to the care recipient will be calculated as part of the near real time fee setting for residential care or in the next claim for Support at Home

Post 1 November 2025 assessment scheme

Lifetime cap

From 1 November 2025, residential permanent care recipients, based on their means, may be asked to contribute towards their hotelling supplement and non-clinical care costs (NCCC) which replaces the Means Tested Care Fee (MTCF). Care recipients must be paying a non-clinical care contribution for it to accrue towards both their lifetime and time limited cap. There are no capping arrangements (lifetime or time limited) for the Hotelling Contribution

The NCCC has both a daily and lifetime cap amount. The daily cap is an amount that is calculated as the daily equivalent of the post 1 July 2014 annual caps on the residential care means tested care fee. The lifetime cap is set and published by the Department of Health, Disability and Ageing.

Support at Home has different lifetime caps depending on the scheme a care recipient is assessed under:

• Post 2014 (grandparented) care recipients will have a special lower lifetime cap rate
• Post 2025 (non-grandparented) care recipients will have a higher lifetime cap amount

See the Resources page for a link to the Department of Health, Disability and Ageing's Schedule of Fees and Charges.

Time Limited Cap - residential care only

The NCCC will also have a time limited cap applied. If a care recipient reaches the time limited cap their NCCC will be set to zero for the remainder of their time in residential care. This does not apply for Support at Home.

Effective on 1 November 2025 the time limited cap is 1460 days (which is 4 years)

See the Resources page for a link to the Department of Health, Disability and Ageing's Schedule of Fees and Charges.

For residential care and home care (pre-1 November 2025) a care recipient is not liable to pay more than the annual cap threshold amount in any care year.

Any means tested care fees paid in residential care counts towards the annual cap in home care (pre-1 November 2025) in the anniversary year a care recipient moves to home care (pre-1 November 2025). These fees also count towards the lifetime cap in home care (pre-1 November 2025) and Support at Home.

Any income tested care fees paid in home care (pre-1 November 2025) count towards the annual cap in residential care in the anniversary year that a care recipient moves into residential care. These fees also count towards the lifetime cap in residential care and Support at Home.

Aged care systems calculate and apply an annual or lifetime cap based on income and asset information recorded. This includes care recipients with means not disclosed (MND).

If a reassessment changes the date of an annual or lifetime cap, aged care systems reassess fees and resets caps if required. In ACMPS, this applies for all care periods based on the date of effect of the reassessment. ACSP will calculate the impact where there has been a manual adjustment.

The different approach in how ACMPS and ACSP applies the reassessment of income and assets is due to the care recipient’s resident status in ACSP. For ACSP, the care recipient’s resident status (that is, low or not low means) determines their accommodation status.

The System for the Payment of Aged Residential Care (SPARC) is the legacy aged care payment system for residential care. SPARC was a view only system from 11 August 2022 and decommissioned in 2023.

To view the legacy SPARC process, see the historical version.