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The Australian Government pays for the bulk of aged care services in Australia through subsidies paid to aged care providers.

You may be asked to contribute costs if you are financially able to do so, however there is help available if you are unable to pay for care and accommodation costs. You will never be denied access to aged care if you cannot afford to pay the fees. 

If you or a loved one is moving into residential aged care you may be asked to pay: 

A basic fee: this is a fee paid by everyone who receives residential care. For some people, this may be the only fee you need to pay.  

A means tested care fee: this is an extra contribution towards the cost of care that you may need to pay - on top of the basic fee - depending on your income and assets.  

An accommodation payment: this is a payment for accommodation in an aged care home.You may have your accommodation costs paid in full or in part by the Australian Government or you will need to pay the accommodation price you negotiate with your aged care home.  

Extra service fees: this is an extra payment you can pay if a higher standard of accommodation is chosen or additional services such as hairdressing or pay TV in rooms is elected.  

What is a Refundable Accommodation Deposit? 

A Refundable Accommodation Deposit (RAD) is a lump sum payment for accommodation in an aged care home. This is the price of a room, in lump sum form that you have agreed with your aged care home to pay. You can pay the accommodation price in full by RAD or you can pay via a combination of a smaller RAD and Daily Accommodation Payment (DAP) or you can pay in full by DAP.  

If you and your aged care home agree, you can ask your provider to deduct certain amounts from the lump sum you've already paid - for example for care fees. The RAD (minus any amounts deducted, as agreed) is refunded when you leave the aged care home.  

What is a Daily Accommodation Payment? 

A Daily Accommodation Payment (DAP) is the daily payment for accommodation in an aged care home. The aged care facility will work out the DAP based on a legislative formula that converts the RAD to a DAP price. You will make this payment on a regular basis, up to a month in advance - similar to paying rent. The DAP is not refunded.  

You can choose to pay a combination of a RAD and a DAP for your accommodation costs.  

Read more about RADs and DAPs here.

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Do you need help finding aged care?

My CarePath can provide you with a complete end to end consultancy service to assist you in navigating the complexities of residential aged care & home care packages. Our consultants are ready to help - call or email today for a friendly, no-obligation chat! 

Call 1300 755 702

Article posted:Jun 9, 2019
Category: Aged care financial planning

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