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As we age, many individuals may require assistance with daily living activities, and residential aged care facilities provide a safe and supportive environment. However, understanding the costs associated with residential aged care can be complex, and it's important to have a clear understanding of the financial commitments involved. This guide will explain the various costs involved in residential aged care, helping you make informed decisions for yourself or your loved ones.
Residential aged care provides long-term care and support for older adults who are no longer able to live independently. It includes assistance with daily tasks such as bathing, dressing, medication management, and meal preparation. Facilities typically offer 24-hour care, including access to health professionals such as nurses and doctors, and may offer specialized care for individuals with dementia or other health conditions.
In Australia, the cost of residential aged care is determined by several factors, including the level of care required, the type of accommodation, and the individual's financial situation. The key costs involved are:
The accommodation cost is for the room in which the individual will live. It covers the building, amenities, and support services provided by the aged care facility.
Basic Daily Fee: This is a fixed daily amount that every resident must pay. It covers living expenses like meals, cleaning, and laundry. The current maximum basic daily fee is set by the government.
Accommodation Payment: This payment depends on the accommodation room chosen (e.g., a single room or a shared room) and can be paid in three ways:
The cost of accommodation can vary greatly, depending on the location, type of room, and facility. Some aged care homes offer more luxurious rooms with additional amenities, which will naturally cost more.
In addition to accommodation, there are fees associated with the level of care provided. The Australian Government uses a care assessment to determine the level of care required. The two main components of care fees are:
Basic Daily Fee: As mentioned, this covers personal care and support services provided to all residents.
Additional Services Fee: Some aged care homes may charge an additional fee for extra services, such as higher-quality meals, additional activities, or specialized care.
Residents may also have to pay for extra services like physiotherapy, dental care, and other specialist treatments, depending on their specific needs.
The Australian Government conducts a means test to determine how much financial support an individual is eligible to receive for their aged care. The means test evaluates both income and assets to determine whether the resident will need to contribute to the cost of care.
Income Test: The government considers the resident’s income to determine if they can afford to contribute toward their care costs.
Asset Test: The resident’s assets, including savings, property, and investments, are assessed to determine if they are required to contribute to the accommodation costs. The family home may be exempt from the assessment in certain circumstances.
Based on the means test, individuals may be required to pay the full cost of their accommodation and care or receive financial assistance from the government.
If the individual is eligible for financial support, the government may provide a subsidy to help with the cost of care. The government pays a portion of the cost, and the resident is responsible for the remaining amount. The level of government subsidy is determined by the results of the means testing process.
The costs of residential aged care can vary depending on the specific facility, the level of care required, and the individual’s financial situation. On average:
Costs are regularly reviewed and may increase over time, so it is important to plan for potential changes in fees.
There are various ways to fund residential aged care:
Managing the costs of residential aged care can be challenging, but there are strategies to help manage the financial impact:
Understanding the costs associated with residential aged care is essential for planning and ensuring that the right level of care is provided without causing financial stress. The costs depend on various factors, including the type of accommodation, level of care, and the individual's financial situation. By researching and considering different funding options, individuals can make informed choices for their future care. It is always a good idea to consult with professionals to ensure that all financial avenues are explored and to help find the best solution for your needs.
Residential aged care homes are located throughout Australia. To begin your search, simply click on your state below and then enter in your desired suburb (or the name of the aged care provider if you already have a home in mind):
