Step 4.4

How incomes are tested?

Process for testing incomes

The Department of Human Services works out the income tested care fee based on your financial information.  If you are one of a couple, half of your combined income is included in the assessment, regardless of who earns the income.  The family home or other assets are not included in the assessment.  

Once Centrelink or the Department of Veterans Affairs has calculated how much you need to pay they will notify you and the provider. The Government will then reduce its subsidy accordingly.

There are several ways to access a form:

  • Download the form from the Department of Human Services here
  • Call the Department of Human Services on 1800 227 475 and have one posted to you
What constitutes 'income'?

‘Income’ is the amount you have left after paying income tax and the Medicare levy. 

The following are not counted as income:

  • Any pharmaceutical allowance, rent assistance or telephone allowance
  • The pension supplement 
  • The Clean Energy Supplement


  • In the case of a pension payable under the Veterans, “Entitlements Act 1986” an amount equal to four percent of the amount of the pension

Generally speaking you will need to lodge an income assessment form. 

The exceptions are if you already receive a support payment from the Department of Human Services or the Department of Veterans Affairs, such as an Age Pension or a Service Pension; or

If you don't lodge an Income Test form then you will have to pay the maximum contribution which is the equivalent to a self-funded retiree.

If you don’t lodge an Income Test form then you will have to pay the maximum contribution - which is the equivalent to a self-funded retiree.  (This is $35.95 per day capped at $13,087.39 per year – September 2023.) 

There is a lifetime cap of $78,524.69 (September 2023) on an income-tested care fee and/or means-tested fee. So if you paid say, $10,000 per year for 7 years of home care, then you would not have to pay a means-tested fee if you moved into residential care at a nursing home.

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A special thanks to our contributors

Jill Donaldson


Jill has been practicing as a clinical physiotherapist for 30 years. For the last 13 years she has worked solely in the Aged Care sector in more than 50 metropolitan and regional facilities. Jill has also toured care facilities in the US and Africa and is a passionate advocate for both the residents in aged care and the staff who care for them. She researches and writes for DCM Media.

Chris Baynes

DCM Media, agedcare101

Chris has been a journalist and publisher in the retirement village and aged care sectors for 11 years. He has visited over 250 retirement villages and 50 aged care facilities both within Australia and internationally. Chris is a regular speaker at industry conferences plus is a frequent radio commentator.

Annie Donaldson

Nurse and Carer

Annie has a long career in both nursing and the media. She has planned and co-ordinated the medical support from both international TV productions and major stadium events. In recent years she has been a primary family carer plus involved in structured carer support.