Aged Care Costs in Australia
Navigating aged care expenses can feel overwhelming. Understanding the key cost components - government subsidies, daily care fees, accommodation options, and financial assessments - can make a significant difference in your decision-making process.
Daily Care Fees
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Basic Daily Fee – A compulsory daily charge covering meals, utilities, cleaning, laundry, and general living services. It’s currently set at 85% of the single aged pension, approximately $61.96 per day.
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Means-Tested Care Fee – A variable fee based on the resident’s income and assets, determined by a financial assessment. It ranges from $0 to around $300 per day, capped annually and over a lifetime.
Accommodation Costs: RAD & DAP
Residential aged care accommodation can be funded in three ways:
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Refundable Accommodation Deposit (RAD) – A lump-sum payment, typically between $200,000 and over $1 million depending on location and room type. Average RADs fall between $450,000 and $750,000, with premium facilities reaching up to $2 million.
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Daily Accommodation Payment (DAP) – A non-refundable daily fee for those who prefer not to pay a lump sum. The amount is calculated as interest on what the RAD would have been.
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Combination of RAD and DAP – A blend of both the lump sum and ongoing payments.
The Australian Government subsidises accommodation costs for eligible individuals based on a means assessment.
Extra Service Fees
Some providers offer enhanced amenities - like luxury meals, upgraded rooms, or premium activities - for an additional cost. These extra service fees can range from $20 to $100 per day and must be clearly outlined in the resident agreement.
Funding & Subsidies: Means Assessment
Your capacity to pay is assessed by Services Australia or the Department of Veterans’ Affairs:
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Subsidies & Contributions – The government fills gaps according to assessed need, providing greater assistance to those with fewer assets.
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Fee Estimator Tool – Available via My Aged Care, this tool helps estimate your aged care costs based on income and assets.
Example Cost Breakdown
Here’s a typical scenario for residential aged care:
| Cost Component | Approximate Amount |
|---|---|
| Basic Daily Fee | ~$62/day |
| Means-Tested Care Fee | $0–$300/day, capped |
| RAD (Accommodation) | $350,000–$550,000 (or higher) |
| Extra Service Fees (optional) | $20–$100/day |
Tips to Manage Aged Care Costs
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Explore payment options: Choose RAD, DAP, or a mix that aligns with your financial needs.
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Use the fee estimator: Get a clearer idea of costs before committing.
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Check eligibility for subsidies: Financial assessments often lead to reduced accommodation costs or fee waivers.
Search for residential aged care vacancies in:
- Canberra and the Australian Capital Territory
- Sydney and New South Wales
- Brisbane and Queensland
- Adelaide and South Australia
- Hobart and Tasmania
- Melbourne and Victoria
- Perth and Western Australia
Need help finding an aged care home?
My Care Path's aged care coordinators and placement specialists will help you find the best options tailored to your needs. Get a personalised shortlist, and make an informed decision with confidence.
Call 1300 197 230
Article posted:Jun 25, 2019 Category: Aged care financial planning
