If your family member has NDIS (National Disability Insurance Scheme) funding now, you might assume aged care at 65 will cost less. The reality is more complex.

We know financial planning for care transitions is stressful. When families ask us about the difference between NDIS vs aged care costs, they're often surprised by what they learn. This post breaks down what each system costs, what's covered, and what you'll pay out of pocket. Understanding aged care vs NDIS funding helps you plan realistically for your family member's future.

We're being honest with you about these costs because financial planning works best with realistic information.

Understanding the Two Systems

Before we compare costs, it helps to understand how each system works. The NDIS is a federally funded scheme for people under 65 with disability. It provides individualised plans based on disability-related needs. Aged care is also federally funded, but available from 65 onwards (or 50 and over for Aboriginal and Torres Strait Islander people).

The critical difference that affects costs: the NDIS is not means-tested, but aged care is.

Both systems fund accommodation and support, but their payment structures differ significantly. Under the NDIS, funding is based on your family member's disability needs, not their financial means. If they qualify for SDA (Specialist Disability Accommodation), the NDIS pays for specialist housing regardless of income or assets.

Aged care takes a different approach. The cost you pay depends on an assessment of income and assets. This means-testing can significantly increase out-of-pocket costs, particularly for people with assets or income above certain thresholds.

For people with disability who've lived under the NDIS, this shift represents more than a funding change. It's a move from a needs-based system to a means-tested one. That distinction matters when you're planning financially.

The NDIS confirms what it can and cannot fund in aged care settings. But to understand disability aged care funding differences, we need to look at each system's costs separately.

NDIS Funding: What You Pay (and Don't Pay)

Under the NDIS, funding decisions are based on disability needs, not financial capacity. This is a core principle of the scheme.

SDA Housing Costs Under NDIS

If your family member qualifies for SDA, the NDIS pays the SDA dwelling payment directly to the housing provider. This covers the cost of the specialist accommodation itself. Participants don't pay this, providers don't invoice participants for it, and it's not means-tested.

What participants do pay is a Reasonable Rent Contribution. This is calculated as 25% of the Disability Support Pension (DSP) plus 100% of Commonwealth Rent Assistance. For most participants, this works out to around $180-$220 per week.

That's the housing cost. Your family member pays rent contribution (roughly $200/week), and the NDIS pays the SDA dwelling component (which varies by design category and location). For a detailed breakdown of SDA payment rates, you can see how these rates differ across building types and categories.

Support Costs Under NDIS

SIL (Supported Independent Living) or other supports are funded separately in the NDIS plan. There's no participant contribution for these core supports. If your family member's plan includes $80,000 for SIL support, that's funded by the NDIS directly.

Your Out-of-Pocket Costs with NDIS

Here's what you actually pay:

• Rent contribution: $180-$220/week ($9,360-$11,440/year)
• Daily living costs: Food, electricity, gas, water, internet, personal items (just like any tenancy)
• Contents insurance: If you choose to have it

Here's what you don't pay:

• SDA dwelling payment: Covered by NDIS
• Bond/deposit for SDA: Housing provider's responsibility, not the participant's
• Core support services: Funded through the NDIS plan
• Assistive technology: If it's included in the plan

The key point: your out-of-pocket housing cost is the rent contribution ($9,360-$11,440/year), plus standard living expenses. Your family member's income and assets don't change what they pay. For more detail on how NDIS pays for housing, this funding model remains consistent regardless of financial means.

Aged Care Funding: What You Pay (and Don't Pay)

Aged care operates differently. Costs are determined by income and asset assessments, and the fees can be substantial.

Accommodation Costs in Aged Care

When your family member enters an aged care facility, they'll face accommodation costs in one of two forms: a Refundable Accommodation Deposit (RAD) or a Daily Accommodation Payment (DAP).

The RAD is a lump sum paid to the aged care provider. In 2026, the average RAD across Australia is around $470,000, with a capped maximum of $750,000. That's a significant amount. If your family member has assets, they may be expected to pay this upfront.

Alternatively, they can choose the DAP option: an interest charge on the unpaid RAD amount at 8.42% per year. On a $470,000 RAD, that's approximately $108 per day, or $39,420 per year.

If your family member's income is below $34,762 and their assets are below $63,000, the government pays accommodation costs. But for many people with disability who've worked, saved, or inherited property, means testing means they'll be paying.

Daily Care Fees in Aged Care

Everyone in aged care pays the basic daily care fee. As of 2026, this is $65.55 per day, which amounts to $23,925.75 per year. This fee covers basic accommodation costs like meals, cleaning, and laundry.

On top of that, there's a means-tested care fee. This additional amount is calculated based on your family member's income and assets assessment. The more assets or income, the higher the fee. This can add thousands more per year to the cost.

What You Pay vs What's Funded

Here's the breakdown:

• Accommodation: RAD ($470,000 average lump sum) OR DAP (~$108/day, $39,420/year)
• Basic daily care fee: $65.55/day ($23,925.75/year) - everyone pays this
• Means-tested care fee: Variable, based on income/assets assessment
• Additional services: Extra costs for premium rooms, additional allied health, etc.

What the government subsidy covers:

• Basic care costs (nursing, personal care) if you're a low-means resident
• Accommodation costs if income below $34,762 and assets below $63,000

For comprehensive detail on aged care costs, My Aged Care provides the official government breakdown of fees and charges.

Side-by-Side Cost Comparison

Let's compare the actual costs families face under each system. We'll look at accommodation, daily costs, means testing, and total out-of-pocket expenses.

Accommodation:

• NDIS SDA: Rent contribution ~$200/week ($10,400/year). No bond, no deposit, no lump sum required.
• Aged Care: RAD lump sum $470,000 average OR DAP ~$750/week ($39,000/year). Means-tested based on assets.

Daily/Ongoing Costs:

• NDIS: Rent contribution ($10,400-$11,440/year) + standard living costs (food, utilities, personal items). No means testing.
• Aged Care: Basic daily fee $23,925/year + means-tested fee (variable, often $5,000-$15,000+/year) + DAP if not paying RAD.

Means Testing Impact:

• NDIS: None. Costs are the same regardless of income or assets.
• Aged Care: Significant. Assets and income directly determine accommodation and care fee costs.

Out-of-Pocket Annual Estimate:

• NDIS: ~$10,400-$11,440/year (rent contribution) + living costs
• Aged Care (with assets): $23,925/year (basic fee) + means-tested fee + DAP ($39,000+/year) OR RAD lump sum payment
• Aged Care (low means): $23,925/year (basic fee), with government assistance for accommodation

Is aged care cheaper than NDIS? For families with assets or income, aged care often costs substantially more out-of-pocket. If your family member owns a home, has savings, or receives income beyond the aged pension, means testing will increase their costs significantly.

The assumption that aged care will cost less is understandable. But the means-testing reality often proves otherwise.

What This Means for People with Disability

For people with lifelong disability, this cost comparison has practical implications. If your family member has been living independently under the NDIS, they may have accumulated assets, maintained their family home, or built up savings. Under aged care means testing, those assets could substantially increase their accommodation and care costs.

The NDIS SDA model is designed specifically for disability needs. Properties are purpose-built with accessibility features like ceiling hoists, roll-in showers, and wide doorways. Aged care facilities are designed for frailty and ageing, not necessarily for younger people with physical disability or complex needs.

Beyond costs, there's the matter of choice and control. The NDIS offers greater choice in housing providers, locations, and support services. Plan management gives participants control over their funding. Aged care is more regulated, with less flexibility in provider choice and service customisation.

From a quality-of-life perspective, staying in SDA housing designed for disability often makes more sense than transitioning to aged care at 65. That's why many families and advocates push for extending NDIS SDA access beyond 65 for people with lifelong disability.

Financial planning for this transition should account for a potential cost increase, not a decrease. If your family member turns 65 in five years, it's worth understanding these costs now. Speak with a financial planner who understands disability funding to explore options for protecting assets or planning for increased aged care costs.

At Paramount, we focus on SDA housing that supports long-term stability. We know that aged care may not be the right fit, financially or practically, for people with lifelong disability. That's why we're honest about these realities.

Conclusion

The comparison between NDIS vs aged care costs reveals an uncomfortable truth: aged care often costs more out-of-pocket for people with assets or income, despite being called "aged care." The NDIS isn't means-tested. Aged care is. That single difference can add tens of thousands of dollars per year to what your family pays.

We know this isn't what most families expect to hear. The assumption that aged care will be cheaper is reasonable. But means testing changes the equation significantly, particularly for families who've saved, owned property, or worked.

For more on the transition process itself, including advocacy efforts and policy discussions, read our guide on Transitioning from NDIS to Aged Care at 65. If you're planning for your family member's housing future and want to discuss SDA options, we're here to help.

Got questions? Call us on (03) 9999 7418 or email admin@paramounthomes.com.au. We're happy to talk through your situation.

Disclaimer: Costs are based on 2026 figures and may change. Aged care fees are updated annually each July. Speak with a financial planner or aged care advisor for advice specific to your family's situation.