Low-means Assessment

It is a common misconception about residential aged-care homes that if a person doesn’t ‘have enough money’, they won’t get in. In reality, the majority of aged-care facilities need to keep a ratio of residents who pay the market price with those who are financially disadvantaged.

Aged care residents assessed as ‘low-means’ are eligible to receive government support for their accommodation. Whilst all or part of their accommodation cost may be subsidised by the government, low means residents still have to pay certain costs.

Low-means application

When entering a residential aged care facility, residents have the option to complete the Centrelink ‘Permanent Residential Aged Care Request for a Combined Assets and Income Assessment’ SA457 form. Completing the form allows Centrelink to determine the person’s ‘means’ and the level of government support for their aged care costs, including whether they are a low-means resident.

Broadly speaking, to qualify as low-means a person will generally need to have assessable assets of less than $173,075 (as at 20 March 2021) It is not as simple as this though, as the formula uses a combination of income and assets. However, using this rule can help to make quick assessments for many cases.

If approved as low-means and the service is willing to offer a place on this basis, the accommodation payment becomes an ‘accommodation contribution’ and is set by a formula instead of the published market rate. The person still has the choice to pay as a lump sum or daily rate. The government will also pay accommodation subsidies directly to the provider.

Residential aged care costs are broadly broken up into accommodation and ongoing care costs. Being a low means resident affects each of these costs differently.

Accommodation costs

Unlike other residents, a low-means resident cannot be asked to pay the published price for a particular room. Instead, low-means residents can only be asked to contribute an amount equal to their daily means-tested amount (MTA) and capped at the accommodation supplement received by the aged care facility.

Currently, the maximum accommodation supplement of $58.69 per day (as at 20 March 2021) can be received by ‘refurbished’ facilities. That is one that has been built or significantly refurbished on or after 20 April 2012. For older non-refurbished facilities, a lower accommodation supplement of up to $38.26 per day (as at 20 March 2021) applies.

When a person enters a facility as low-means, it is important to note that their accommodation contribution is not fixed for the time they are in the facility. In fact, their level of assessable assets and income is reassessed by Centrelink each quarter and if there has been a change this may impact their daily MTA. If their daily MTA has reduced, their accommodation contribution may also reduce. However, if it increases their accommodation contribution may also increase (subject to the government supplement received by the facility).

Ongoing care costs

Like other residents, low-means residents will need to pay a basic daily care fee that covers the cost of daily living such as meals, laundry and power. It is currently equal to 85% of the basic single Age Pension rate.

Additionally, residents can also be asked to pay a means-tested fee (MTF) towards the cost of their ongoing care, which is subject to an annual and lifetime cap. The MTF is calculated as the amount of the resident’s MTA less the maximum accommodation supplement of $58.69 (regardless of the actual supplement received by the facility).

Residents who are classified as low-means are generally not required to pay this fee as long as their calculated daily MTA remains below the maximum accommodation supplement. However, if their means increase after entry and their daily MTA increases above the maximum accommodation supplement, they too will be required to pay a MTF.


Low-means residents face challenges managing their residential aged care costs. Strategies for both before and after entry are available to help conquer these challenges. Advice should be sought by low means residents to ensure that they meet their lifestyle goals, are able to pay for their aged care fees and can navigate through any changes in their circumstances.