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The Costs of Residential Aged Care

on Thursday, February 24, 2011

In Australia there is a minimum cost of aged care set by the Government, which can be covered with the rate of the pension (plus rent assistance). If you are financially disadvantaged then there is financial assistance available. You can find out what you are entitled to by contacting the Aged Care Information Line on 1800 500 853 or by calling Centrelink on 13 23 00.

Basic Daily Care Fee

In subsidised aged care there are two key fees, basic daily care fees and accommodation payments.

Basic Daily Care fees refer to the basic services which must be provided in all homes such as meals, laundry/cleaning and mobility assistance. These daily care fees can also include the cost of specialised equipment that the resident needs to function on a daily basis, help with medications, nursing procedures et cetera.

The daily care fees are calculated by:

  • A basic daily care fee
  • An income-tested fee

The maximum Basic Daily Care Fee is currently set at $48.25. This rate increases on March 20 and September 20 each year in line with changes to the Age Pension.

If you have other income other than the pension, you will be assessed by Centrelink or Veteran’s Affairs if you are a veteran to determine how much extra you may be required to pay.

Regardless of your income situation, you cannot be asked to pay more in daily care fees than the actual cost of your care.

Means-Tested Care Fee

This is an additional contribution towards the cost of residential aged care that some people will be required to pay. The Department of Human Services will work out whether you are required to pay this fee based on assessment of your income and assets. They will advise you of the amount.

If you are a member of a couple, half of your combined income and assets are considered in determining your means-tested care fee, regardless of which partner owns the asset or earns the income.

There are annual and lifetime caps that apply to the means-tested care fee. Once these caps have been reached, you cannot be asked to pay any more means-tested care fees.

Any income-tested fees you have paid in a Home Care Package prior to moving into an aged care home will also contribute to your annual and lifetime caps.

Accommodation Costs

These costs cover your accommodation in the aged care home. Some people will have their accommodation costs met in full or in part by the Australian Government. Others will need to pay the accommodation price agreed with the aged care home.

The Department of Human Services will advise which applies to you based on an assessment of your income and assets.

Fess for Extra Services (and Other Additional Care and Services)

Additional fees may apply if you choose a higher standard of accommodation or additional services. Extra Service fees apply to residents in an Extra Service place. These fees are regulated and intended to cover the costs of a higher standard accommodation.

Other additional care and services and their associated fees are not regulated and are to be agreed upon by yourself and your chosen aged care provider. These fees can vary from home to home. Additional services may include hairdressing, daily newspapers, pay TV and a wider variety of meal choices.

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