For you and your family’s peace of mind, it is important that you fully understand the costs of residential aged care as well as the fees and charges you may incur along the way.
There are also a number of extra services and benefits that you may be eligible for.
The upfront entry cost will depend principally on two things:
- the type of care you are looking for – permanent or respite care
- how much you (or your family member going into aged care) have in ‘assessable’ assets
All providers are required to advertise their prices for accommodation on both their own website and the My Aged Care website.
The price you pay for the accommodation is fixed on entry and will not rise whilst at the home – new rises only apply to new residents.
Residents can choose to pay for their accommodation by either a Refundable Accommodation Deposit,(or RAD) , a Daily Accommodation Payment (or DAP), or a combination of both.
• A Refundable Accommodation Deposit is paid as a lump sum amount and is completely refundable.
• A Daily Accommodation Payment accrues daily at an interest rate set by the Government and is paid periodically, for example monthly. This payment is not refundable.
• A combination payment includes both a partial lump sum and daily payments .
A Refundable Accommodation Deposit (RAD) is like an interest free loan to the aged care home. By law the funds must be used to improve building standards and the quality and range of services provided. The RAD or lump sum is government-guaranteed and refundable.
Extra Service offers additional lifestyle extras and hotel like services including higher standards of accommodation and meals, wine with meals and increased services and entertainment.
Extra services vary from home to home.
As well as an accommodation payment you will also be asked to pay daily fees which contribute towards your daily living costs such as nursing and personal care, meals, linen and laundry, and heating and cooling. Daily fees are comprised of two parts:
• basic daily care fee which is set by the government at 85% of the full pension,
• an additional means tested care fee which is payable depending on assets and income of the resident.
More information can be obtained fromyour pension provider.
How is my income assessed?
When you move into aged care, your pension provider will assess your assets and income including that of your partner and spouse so that the Department of Social Services can work out the amount of means tested care fee you could be asked to pay. Once you have been assessed you will be asked to pay the fee from your date of entry into the home.
Assets and partners or spouses
You are considered to own half your assets with your spouse or partner regardless of who holds the title to the assets.
As part of your asset assessment you will be asked to provide details of all assets owned by both of you.
The family home, however, is excluded from your assets assessment if:
- you have a spouse, partner or dependent child still living in the family home at the time of the assessment or at the time of the residents entry into care (whichever date is earlier)
- a close family member has lived in the family home for at least five years and is eligible for an income support payment
- a carer has lived in the family home for at least two years and is eligible for an income support payment.
Aged care fees and my pension
Your pension will not be affected when you enter an aged care home. If you are part of a couple receiving a pension you may be entitled to a higher rate of pension if you have been separated for care reasons.
For more information on your pension and aged care contact your pension provider or the Department of Social Services.
What happens to my RAD if I leave my aged care home?
Your RAD is refundable to you when you leave your home within the following timeframes:
• if you give at least 14 days notice of leaving the facility your RAD should be repaid within that period
• if you notify your provider more than 14 days before you leave your RAD should be refunded on the day you leave
• if you give no notice of your departure your RAD must be repaid within 14 days after your leaving date
• in the case of death the RAD must be refunded 14 days after the provider is shown probate or letters of administration
What happens to my RAD if my care needs change?
If your care needs change within the same home your RAD arrangements simply continue. If you move to a new home your RAD will be refunded to you and you will enter into a new agreement with the new home.
What if I can’t afford to pay my aged care home payments?
The Australian Government has made arrangements to help residents of aged care homes who may experience difficulty in paying for their care.
Please contact the Aged Care Information Line on 1800 500 853 for more information.
Your costs checklist
Here is a checklist to ensure you fully understand the cost implications of any aged care homes you might be considering to ensure they are suitable to your financial situation.