Aged Care Fees and Costs Explained (With Printout)
Updated 18th September 2023 | | 4 minute read
We're going to be honest: aged care finances can get really, really complicated. But conquer the basics and you'll put yourself on the path to feeling in control of what can be a very stressful time. Let's get started.
The first part of understanding aged care costs, is that everyone is different.
You can’t compare your experience to a friend’s or vice versa. This is because the cost of your care depends on, not only how much care you need, but also your income and assets (aged care financial support is means tested)
Because of this, to work out how much care is going to cost, you need:
- An ACAT assessment – to work out the level of care you need
- A financial assessment from Services Australia (Centrelink)– to work out how much you need to contribute to the cost of your care and how much the government will
If you are missing either of these documents, our friendly team can point you in the right direction and assist completing them.
Important note: Even if you don’t have a home or assets, you can still be eligible to access aged care. St Vincent's recommends doing both an ACAT assessment and a financial assessment so you can get the clearest idea of what kind of financial support you can receive.
The 2 aged care costs to remember
These are used to pay for your day to day living costs
These cover the cost of your home
How much do I pay of each?
What you pay in care fees and accommodation payments will depend on your income and assets and the value of the home you’re purchasing.
You can get an estimate of the types of fees you can expect to pay from My Aged Care.
The 3 types of Care Fees and what they do
Basic Daily Care Fee
Everyone pays a basic daily care fee
The Basic Daily Care Fee is used to pay for your day to day services like meals, laundry, in-house activities. No matter your income and assets, you will pay a Basic Daily Care Fee
Means-Tested Care Fee
Some pay an additional means-tested care fee.
The Means- Tested Care Fee is an additional co-contribution you may get asked to pay based on your assets and income that the facility collects on behalf of the Government.
Additional Services Fee
Some pay an additional services fee.
The Additional Services Fee is fee which you pay for personalised services. The availability of this will depend upon your chosen home.
3 ways you can pay for accommodation
1. Refundable Accommodation Deposit (RAD)
A one off lump sum accommodation payment that is fully refundable at the end of your stay, less any amounts you have agreed to have deducted.
The refund is guaranteed by the Australian Government within 14 days.
- See examples of room costs and RADs with our Sydney aged care homes
2. Daily Accommodation Payment (DAP)
The accommodation cost converted into a daily payment, which is charged periodically at the maximum permissible interest rate (MPIR) set by the Australian Government. (The MPIR will change but is locked in upon admission)
There is no refund at the end of your stay.
3. Combination payment (RAD+DAP)
The accommodation cost paid by a combination of a Refundable Accommodation
Payment (RAD) and a Daily Accommodation Payment (DAP).
You can choose the RAD amount and we will calculate the remaining cost as a DAP.
Important: The amount each person pays for their accommodation depends on:
1. The negotiated price of the room
2. How much financial support the government provides (this is determined by an income and assets assessment)
You have 28 days (from the day you enter care) to choose your payment method. In the interim, you are required to pay a Daily Accommodation Payment (DAP).
If you are classified as needing government support, the names of payments you make will also change:
1. Your RAD payment becomes a RAC (a Refundable Accommodation Contribution)
2. Your DAP payment becomes a DAC (a Daily Accommodation Contribution)
3. If you have your accommodation payments covered by the government (fully supported) you will not be required to pay any accommodation payments.
Aged care costs can be incredibly complicated. But understand the basics, write things out and get all of your assessments done and you'll be well on your way to choosing the right home that works for you and your budgetWe're going to be honest: aged care finances can get really, really complicated. But conquer the basics and you'll put yourself on the path to feeling in control of what can be a very stressful time. Let's get started.