The fees you’ll pay for aged care are divided into the following four categories:
Accommodation Payment
This fee is set by the aged care facility, and it is published on websites and in other literature from the facility. As you look at accommodation payment fees, take note of whether they charge a lump sum (RAD) or daily fee (DAP). Although these fees are published on facilities’ websites, they may be willing to negotiate a lower amount in some cases.
Basic Daily Care Fee
Like the Accommodation Payment, the Basic Daily Care Fee is paid by all aged care home residents at a fixed amount, regardless of their assets or income. This fee is indexed in March and September every year. The Basic Daily Care Fee is currently $46.50 per day for all residents.
Means-Tested Fee
The Means-tested Fee is calculated on the combined income of your income and assets on an ongoing basis. Currently, there is an annual cap of $25,000 and a lifetime cap of $60,000. These figures are indexed, so they may change.
Additional Services Fee
Facilities often offer extra services above and beyond basic daily care, and they can charge an Additional Services Fee to cover these services. This fee usually ranges from $20-$120 per day, depending on the services and the aged care facility.
With this information, you can come up with a ballpark figure for how much your aged care will cost. You’ll find as you research different facilities’ websites that there is a range of accommodation payment fees, and you can tailor your aged care expenses to your budget by choosing a facility that best meets your needs and income.
Other Considerations
- You don’t have to make your accommodation payment before you move into an aged care facility. All you have to do is agree on how much you will pay and sign the facility’s Resident Agreement.
- The refundable accommodation deposit (RAD) is held in trust for you by the residential service provider. The money can be invested to earn interest or used to buy land or expand operations, or it can be used to pay for maintenance. You can think of RAD as an interest-free loan to the aged care service; it is not repayable until you leave.
- Take extra care when researching aged care facilities in Victoria or South Australia. Some facilities in these states are funded and regulated by the State Government, and they don’t guarantee repayment of RAD.
- Seek advice on how to restructure your investments to plan for aged care. There may be strategies you can use to increase your Age Pension in order to make sure you have enough cash flow to pay for aged care services.
