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Average Nursing Home Costs In Australia: Why More Families Are Choosing Home Care

As loved ones age, families often find themselves weighing two major options: nursing home care or home-based support. While both offer essential care services, there’s a growing trend among Australian families leaning towards home care — and one of the biggest drivers behind this shift is cost.

Understanding what aged care really costs can help families make informed choices that balance wellbeing, independence and financial sustainability. In this guide, we’ll explore the average nursing home costs in Australia, what these fees cover and why more people are rethinking traditional residential care.

Information pack

How much does a nursing home cost in Australia?

Nursing home costs vary depending on location, room type, the level of care needed and the financial situation of the person entering care. However, there are four common types of fees that most residents and their families encounter:

  • Basic daily fee

All residents pay a standard daily fee set at 85% of the full single Age Pension. As of 2025, this amounts to roughly $63.82 per day, or $23,294 per year.

  • Means-tested care fee

This is an additional contribution towards care costs, assessed based on income and assets. It can be up to $400 per day for some individuals, although capped annually at $34,311 and lifetime-capped at $82,347 (2025 figures).

  • Accommodation payment

Nursing homes may charge a refundable accommodation deposit (RAD) or a daily accommodation payment (DAP). The RAD can range from $300,000 to $700,000 or more, depending on the facility. Those who can’t afford the lump sum can opt for a DAP — often $50 to $120 per day.

  • Additional services fees

The cost of nursing home care is also affected by premium extras, such as preferred brands of certain products, beauty services or entertainment. These costs vary widely and are often not included in base care packages.

When added up, the average cost of nursing homes in Australia can easily surpass $70,000 to $100,000 annually, especially when means-tested care fees and extras are involved.

What families are paying for in nursing homes

Nursing home costs cover a range of services, including 24/7 clinical care, meals, accommodation, activities and general support. For many, the convenience of consolidated services in a single location is appealing. However, some families may find that the structured nature of nursing homes doesn’t always suit the individual routines or preferences of their loved ones. And with additional service fees and accommodation payments rising, the real cost of a nursing home often exceeds initial expectations.

Why home care is gaining ground in Australia

Home care is fast becoming the preferred option for older Australians wanting to remain in familiar surroundings while receiving tailored support. Here’s why:

  1. Greater control over costs

With home care, clients can decide which services they need and how frequently. This flexibility means families can better manage their home care funding, making it easier to avoid paying for services that aren’t required.

Some self-managed home care models, like Homecare My Way’s, don’t have basic daily fees or exit fees, and administration fees tend to be far lower than institutional care costs. Compared to the average cost of nursing homes in Australia, which can include significant accommodation payments and ongoing daily charges, home care funding goes directly towards meaningful support, such as cleaning, personal care, shopping assistance or allied health services.

  1. Preserving routines and independence

Moving into a nursing home often means adapting to set routines, shared spaces and unfamiliar faces. Home care keeps things personal and comfortable; support workers come to the client’s home at times that suit their daily rhythm. This level of choice can significantly boost confidence, independence and emotional wellbeing.

  1. Support that grows with you

Just like aged care homes, home care packages are funded by the Australian Government and designed to support a range of needs. Over time, clients can move from basic support (like weekly meal prep) to higher care levels (such as mobility assistance or medication management), without needing to relocate.

Comparing the numbers — nursing home vs home care costs

Here’s a simple snapshot:

Expense TypeNursing Home (Approx.)Home Care (Approx.)
Basic daily fee$23,000/yearOften $0 in self-managed care
Means-tested care feeUp to $33,309/yearApplies to both
Accommodation payment$300k–$700k+ RAD or $50–$120/day DAPNone
Services you controlLimitedFull choice
SettingFacility-basedIn your own home

While individual needs vary, the average cost of nursing homes in Australia is often significantly higher than what families anticipate — and more restrictive when it comes to personal choice.

Get flexible home care support with Homecare My Way

Choosing aged care is a deeply personal decision, influenced by health needs, lifestyle preferences and finances. With rising questions like “How much does a nursing home cost in Australia?”, many families are also exploring more affordable and personalised solutions. As awareness of home care options grows, Australians are asking: Is there a better way to support ageing at home?

At Homecare My Way, we empower Australians to live independently for longer with low fees and the freedom to pick their own suppliers. Our self-managed homecare packages keep you in control of your care and your funding without paying for things you don’t need.

Get in touch or download your free info pack today to learn how we can help make home care easier — and more affordable — for your family.