Retirement village vs aged care: what is the difference?

What is the difference between a retirement village and aged care?

A retirement village is housing. An aged care home is care. Retirement villages are run under state and territory retirement villages laws and contracts you sign with the operator. Aged care homes are funded and regulated by the Australian Government under the Aged Care Act 2024, which commenced on 1 November 2025. Different laws mean different rights, costs and exits.

People use "aged care", "nursing home" and "retirement village" as if they overlap. Legally they do not. Victoria's Retirement Villages Act 1986, for example, defines a retirement village as a place for retired people where at least one resident has made an entry payment, and which is not a residential care facility. Other states have their own Acts with similar effect.

An aged care home (the older term was nursing home) is for older people who can no longer live independently and need ongoing help with everyday tasks or health care. It provides personal care and nursing care, and it is one of the services the Commonwealth funds. For the full picture of that side, see our guide to residential aged care in Australia.

Who is a retirement village for, and who needs an aged care home?

A retirement village suits someone who can still live independently but wants a smaller home, less maintenance, neighbours nearby and some shared facilities. An aged care home suits someone who needs help with personal care or nursing that cannot be delivered safely at home, including overnight. The question is care needs, not age.

In Victoria, residents must be "retired persons": aged 55 or over, retired from full-time work, or the partner of someone who is. Other states set their own rules. Villages generally do not include health care.

Aged care homes are for people aged 65 and over, or 50 and over for Aboriginal and Torres Strait Islander people and people who are homeless or at risk of homelessness, who have been assessed as needing that level of care. Your finances do not affect eligibility for a government-funded aged care home. They affect what you pay.

A village is a lifestyle and housing decision. An aged care home is a care decision.

How do you get into a retirement village compared with aged care?

You get into a retirement village by applying to the operator and signing a contract. There is no government assessment. You get into an aged care home only after an aged care assessment approves you for residential aged care, then you apply to individual homes and agree terms with the one that offers you a place.

• Retirement village: inspect, read the disclosure documents and contract, get independent legal advice, sign, pay the entry payment. Most states give a cooling-off period after signing.
• Aged care home: register with My Aged Care (1800 200 422), have an aged care assessment (this replaced the ACAT), receive an approval letter, then apply to homes. Our guide on how to get an aged care assessment walks through each step.

Because the entry routes are separate, living in a village gives no priority in an aged care home, even one on the same site. Consumer Affairs Victoria states that an aged care operator cannot keep places free for residents of a particular retirement village, even on the same site, because access to aged care depends on assessment under the Commonwealth Aged Care Act 2024.

How are the costs different?

Retirement village costs are set by your contract with the operator and usually come in three parts: an entry payment, ongoing fees while you live there, and a fee or deductions when you leave. Aged care home costs are set largely by Commonwealth rules: a basic daily fee, means-tested contributions for some people, and an accommodation payment.

Retirement village costs

• Entry payment: called an ingoing contribution, entry contribution or purchase price, depending on the state and the type of contract. It may buy a lease, a licence, a loan-style arrangement or a strata title.
• Recurrent or maintenance fees: ongoing charges for running the village, such as shared facilities, gardens, insurance, security and staff. Rates, water and energy may be extra.
• Departure or deferred management fee: usually a percentage of the entry payment that builds up with each year you live there, up to a cap in the contract. The contract may also share any capital gain or loss on resale, and charge refurbishment or reinstatement costs.

These terms, the caps and how quickly your money is repaid vary by state and by contract. The rules also change. Most of Victoria's Retirement Villages Amendment Act 2025 took effect on 1 May 2026. It changed how departure fees are calculated and when exit entitlements are paid for contracts signed from that date. The contract you are offered is what counts.

Aged care home costs

In an aged care home, everyone pays a basic daily fee. Many people also pay means-tested contributions toward hotel-type services and non-clinical care, depending on income and assets. Accommodation is paid as a lump sum, a daily payment or a mix, unless the government covers it because of low means. Fee and contribution rates change on 20 March and 20 September each year. Our guide to what aged care costs sets out current fees, and RAD or DAP explains the accommodation choice.

Can you get aged care services in a retirement village?

Yes. A retirement village is your home, so you can receive government-funded home care there, just as you could in any other house or unit. Eligibility for Support at Home depends on an aged care assessment, not on the type of housing. The village itself is not required to provide care.

Support at Home replaced Home Care Packages on 1 November 2025. It funds services such as personal care, nursing, cleaning, meals and allied health, with eight ongoing classifications and quarterly budgets. Lower-level help may come through the Commonwealth Home Support Program. See the Support at Home service list for what the funding can and cannot pay for.

Some village operators are also registered aged care providers and will offer to deliver your Support at Home services. You can choose them, but you do not have to. Before signing a village contract, check if it limits which outside services can come in, and if you would pay the village for a service your Support at Home budget could fund.

Are serviced apartments aged care?

Usually not. Serviced apartments in a retirement village are still part of the village, covered by state retirement villages law and your village contract. They typically add services such as meals, cleaning or laundry for a fee. They do not come with the round-the-clock personal and nursing care an aged care home provides.

This is the grey area families most often misread. Marketing terms like "assisted living" or "care apartment" have no fixed legal meaning. A serviced apartment on the same site as an aged care home is not the same as a room in that home, and moving from one to the other still requires an aged care assessment and a separate agreement.

What happens if care needs increase in a retirement village?

When care needs grow, the usual first step is more help at home through Support at Home, delivered in the village. If needs outgrow what can be safely provided at home, the person moves to an aged care home. That means ending the village contract, paying the exit fees it sets, and waiting for the exit entitlement to be repaid.

Timing matters. Aged care accommodation payments may be due before the village money comes back. Some states have rules to help. In Victoria, a non-owner resident who has been accepted by an aged care home can ask the village operator to pay aged care accommodation payments directly to the home from their unpaid exit entitlement. Check the rules in your state and your contract.

If a sudden hospital stay forces the question, going from hospital to aged care explains discharge options, and respite care can give time to decide without signing a permanent agreement.

Where can you get independent advice before signing?

Get independent legal advice before signing any retirement village contract. The ACCC and state regulators all say this. For village rules and disputes, contact the consumer affairs or fair trading body in your state or territory. For aged care homes, contact My Aged Care, and for complaints the Aged Care Quality and Safety Commission.

• A lawyer: preferably one who regularly reviews retirement village contracts, paid by you, not the operator.
• State regulators: NSW Fair Trading in New South Wales, Consumer Affairs Victoria in Victoria, and the Department of Housing and Public Works in Queensland. Other states and territories have their own consumer affairs or fair trading offices.
• Residents associations: retirement village residents associations in several states give information to current and prospective residents.
• Financial advice: the ACCC suggests checking how a village contract may affect Centrelink or Veterans' Affairs payments.
• Aged care: My Aged Care on 1800 200 422 and the OPAN advocacy line on 1800 700 600. Our who to call page lists the rest.

If the aged care home side of the decision goes wrong later, our guide to complaints and your rights explains how to raise it.

Frequently asked