Residential Aged Care

Residential Aged Care provides full time residential care for older people who are assessed as being in need of such care.  The assessment is carried out by the Aged Care Assessment Team.

Residents of Aged Care facilities are expected to contribute financially towards the cost of their care.  With this in mind, there are four fees/expenditures which must be considered:

1. Accommodation Payment

The accommodation payment is the amount paid in order to secure a place within an aged care facility (ie the amount paid to get your foot in the door).  Each facility sets its own Accommodation Payment amount for each room type that it provides in the facility and must publish this on the My Aged Care website.  (An aged care facility can offer more than one room type, and have different accommodation payments applicable to each room type).  The Accommodation Payment can be paid in three ways:

(a) by way of a cash payment - this is known as a Refundable Accommodation Contribution (RAC).  This amount is held by the facility and fully refunded when the resident departs (although they do not pay interest).

(b) by way of a daily payment - this is known as a Daily Accommodation Contribution (DAC).  This is equivalent to interest on the Accommodation Payment at a rate set by the Government calculated on a daily basis (it is not refundable).

(c) a combination of RAC and DAC - ie you can pay some of the Accommodation Contribution as a deposit, and on that part that you do not pay by way of a deposit, you pay a DAC in respect of.

The average Accommodation Payment in this area is a little over $400,000.00.

2. Daily Care Fee

Everyone pays the daily care fee.  The daily care fee is equivalent to 85% of the single aged pension.  Those who do not receive the full single aged pension are required to fund any shortfall themselves.

3. Means Tested Fee

In addition to the Daily Care Fee, an additional daily fee may also be payable based upon the Resident's income and assets.  Each resident is required to have an income and assets test undertaken to determine if this fee is payable, and if so the amount of the means tested fee.  There is an annual cap on the means tested fee which at the moment is $26,566.54.  This that once a resident pays means tested fees to that amount in any year, they cease to pay further means tested fees for that year (it does not mean that the maximum daily amount is $26,566.54/365).  There is a lifetime cap which is currently $63,759.59.  Once a resident pays this amount of means tested fee, they do not pay any more for the rest of their life.  It is roughly equivalent to 2.5 times the annual cap.  We note the average life expectancy of a resident in aged care is under three years for males and just over three years for females.

4. Extra Services Fees

Extra Services Fees may be charged by an Aged Care Facility for everything that is not included in the normal services provided by the facility.  For example, wine with dinner and haircuts.