Fees & Charges

AGED CARE COSTS

The Commonwealth Government of Australia regulates the fees payable by a resident in an aged care facility. These fees are regularly indexed by the government and can be obtained on the Department of Social Services website.

A resident’s fees and charges can be made up of 3 components:
1. Accommodation CostRAD/DAP or Accommodation ContributionRAC/DAC
2. Basic Daily Care Fee (Standard Resident Contribution) – everyone must pay this
3. Means Tested Care Fee – not everyone needs to pay this, it depends on the outcome of their means test
In addition, some facilities may charge an Extra Services Fee, or fee for additional services.

We encourage you to seek our advice to determine the fees you will be eligible to pay, assess the impact on your cashflow and look at strategies to make it work for you.

ACCOMMODATION COST

Facilities must advertise their accommodation costs – the published price is capped at $550,000 with amounts above this requiring government approval. The fee can be negotiated downwards but not upwards.

Residents whose total assets are valued at less than $159,631.20 may be required to pay an Accommodation Contribution instead of the Accommodation Cost.

REFUNDABLE ACCOMMODATION DEPOSIT (RAD)

A lump sum payment towards the cost of non-supported accommodation costs – guaranteed by the government to be refunded (less any drawdowns).

DAILY ACCOMMODATION PAYMENT (DAP)

An interest payment payable on the unpaid non-supported accommodation costs – this can be paid for from the RAD or your personal cashflow.

ACCOMMODATION CONTRIBUTION

A permanent resident with assets valued between $46,500 to $159,631.20 will be asked to pay an accommodation contribution. When calculating the accommodation contribution, all residents must be left with a minimum of $46,500 in assets.

Note: If your asset value increases to more than $159,631.20 after admission to care as a supported resident, we strongly encourage you to seek our advice, as your fees may increase significantly.

REFUNDABLE ACCOMMODATION CONTRIBUTION (RAC)

A lump sum payment towards the cost of partially supported accommodation costs – guaranteed by the government to be refunded (less any drawdowns).

DAILY ACCOMMODATION CONTRIBUTION (DAC)

An interest payment payable on the unpaid partially supported accommodation costs – this can be paid for from the RAC or your personal cashflow.

ACCOMMODATION SUPPLEMENT

The Government pays an accommodation supplement to aged care facilities for residents who are eligible for Government assistance with their accommodation costs. The current maximum accommodation supplement is $54.39.

BASIC DAILY CARE FEE (STANDARD RESIDENT CONTRIBUTION)

This is the general accommodation fee which is required to be paid by all residents and is linked to the Aged Pension. The Standard Resident Contribution (commonly referred to as the Basic Daily Care Fee) is $48.44 per day. It is a fee which all residents pay, no matter what their financial position, and equates to 85% of the full single pension. This payment is for the provision of services related to care of the resident and will be means tested from 1 July 2014. For residents who cannot afford the full cost of care, government funding is paid to the aged care provider to support them so that no one is disadvantaged. These fees are usually aligned as a percentage of the pension.

EXTRA SERVICE FEE

Some homes offer a higher standard of accommodation including additional hospitality services. These homes are approved by the Department of Social Services as Extra Service facilities and attract an additional daily fee, which is capped from date of admission. Note: Some facilities may charge for additional service offerings, at an additional cost which they may not call an Extra Service Fee.

MEANS TESTED CARE FEE

The Commonwealth Government via Centrelink, will be assessing the assets and income of all permanent residents entering a Commonwealth funded residential aged care home. Every resident will be assessed for income and assets upon admission to evaluate their capacity to financially contribute further towards residential aged care.

The Means Tested Care Fee is a daily fee, which is capped at $26,041.09 per resident per year and has a lifetime cap of $62,499.66 per resident.

The means tested care fee is payable from day of admission. If the means tested care fee has not been calculated upon day of entry, the fees will default to the maximum rate until a determination has been made by Centrelink, following their assessment of your Request for Asset Assessment.

We encourage you to seek our advice to determine your Means Tested Amount and determine the impact on your cashflow and networth, and look at strategies to help make it work for you.

MAXIMUM PERMISSIBLE INTEREST RATE (MPIR)

The current maximum permissible interest rate (MPIR) is 5.76%. It is set by the government at the time a resident enters permanent care, ad remains fixed at that rate unless the resident subsequently moves rooms within the aged care facility, or moves to another facility.

MINIMUM PERMISSIBLE ASSET AMOUNT

The minimum permissible asset amount is currently set at $46,500. Residents whose total assets are valued below this amount will be assessed as Fully Supported Residents.

ACCOMMODATION PAYMENT OPTIONS
Applicable to Non Supported Residents

OPTION 1: REFUNDABLE ACCOMMODATION DEPOSIT (RAD):

Pay the total amount of the Accommodation Payment. The RAD is payable at the time of entry. Daily payments must be paid from the date of entry until RAD is paid and must be paid not later than 6 months after the date of entry. RADs are fully secured by the government for approved aged care homes - that have been assessed by the government for their ability to provide pre-set standards of care and compliance.

OPTION 2: DAILY ACCOMMODATION PAYMENT (DAP):

If you do not intend to pay the Accommodation Cost as a RAD the Maximum Permissible Interest Rate (MPIR) is charged on the unpaid portion of the Accommodation Payment from date of entry. The interest amount is calculated on a daily rate and paid monthly.

OPTION 3: COMBINATION of RAD and DAP

You can pay a partial lump sum amount as a RAD and an ongoing interest payment on the unpaid portion of the Accommodation Cost as a DAP based on the agreed Accommodation Cost. The interest amount is calculated on a daily rate and paid monthly.

OPTION 4: DEDUCTION of DAP (and other amounts) from RAD

If you pay a partial RAD you can request the facility to deduct the DAP from that amount; and may require you to maintain the agreed Accommodation Cost if the RAD is reduced. The amount of your DAP will increase if your RAD is reduced in accordance with the method of calculation.

Other amounts – such as care fees or the costs of additional services – may be deducted from the RAD, if agreed between the resident and the provider. This must be set out in writing.

We encourage you to seek our advice, to determine the most suitable option for your circumstances and objectives.

ACCOMMODATION CONTRIBUTION OPTIONS
Applicable to Fully Supported or Partially Supported Residents

OPTION 1: REFUNDABLE ACCOMMODATION CONTRIBUTION (RAC)

Pay the total amount of the accommodation contribution as per Asset Assessment. The RAC is payable at time of entry.

OPTION 2: DAILY ACCOMMODATION CONTRIBUTION (DAC)

If you do not intend to pay the Accommodation Contribution as a RAC the Maximum Permissible Interest Rate (MPIR) is charged on the unpaid portion of the Accommodation Contribution from date of entry. The interest amount is calculated on a daily rate and paid monthly.

OPTION 3: COMBINATION of RAC and DAC

You can pay a partial lump sum amount as a RAC and an ongoing interest payment amount on the unpaid portion of the Accommodation Contribution as a DAC based on the Accommodation Contribution as per the Asset Assessment. The interest amount is calculated on a daily rate and paid monthly.

OPTION 4: DEDUCTION of DAC (and other amounts) from RAC

If you pay a partial RAC you can request the facility to deduct the DAC from that amount; and this may require you to maintain the assessed Accommodation Contribution if the RAC is reduced. The amount of your DAC will increase if your RAC is reduced in accordance with the method of calculation.

Other amounts – such as care fees or the costs of additional services – may also be deducted from the RAC, if agreed between the resident and the provider. This must be set out in writing.

The information provided on our website is general in nature, and does not take into account your personal circumstances. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

We encourage you to seek our advice, to determine the most suitable option for your circumstances and objectives.