In this paper the relationship between resource use, costs and dependency is examined for a captured population' of old people living in the community but attending day hospital care. Dependency is measured using a Guttman (activities of daily living) based scale. Resource use is assigned by category of dependency and an opportunity cost methodology is used to estimate the cost of care. The results generally confirm that the overall cost of care increases with dependency, though there are exceptions to this trend when each component of care is analysed separately. For instance, not all elements of day hospital provision increase as dependency gets worse, as witnessed by the relatively low provision of paramedical care to old people in the highest category of dependency.The results also confirm that community care is not a cheap option. Once informal care is quantified and valued, the cost rises accordingly. Moreover, if persons living in the community are attending day hospital or have occasional in-patient stays in acute hospitals, costs will rise even more. This is not an argument against community care. Rather, it is to emphasize that while it may be better for some dependent old people to live at home it is not necessarily cheaper. This will come as no surprise to the many carers of old people whose work has rarely been satisfactorily taken into account in comparative analyses of the cost of care.