In Australia, aged care fees are calculated based on a combination of factors including the individual’s financial situation, the level of care required, and the type of aged care service they choose. A senior receiving the full aged pension may not need to contribute much extra towards the cost of aged care services, while a homeowner with significant assets and income may be required to pay several fees, contributions, and payments.
Here’s a general overview of how aged care fees are calculated:
- Basic Daily Care Fee: This is a standard fee that all residents in aged care pay. It covers the costs of living expenses such as meals, cleaning, laundry, and basic personal care. The government sets a maximum daily amount for this fee, and the actual amount an individual pays may depend on their income and assets.The basic daily care fee is set at 85% of the standard full aged pension and is currently $58.98 per day. If you are on a pension, this fee will be paid from your pension, directly to the aged care facility.
- Means-Tested Care Fee: The means-tested fee is calculated based on a resident’s income and assets, including their home if they own one. This is an ongoing fee that contributes to the cost of personal and clinical care. Means-tested fees are determined by an assessment coordinated by Centrelink or the Department of Veteran Affairs.The means-tested care fee has an annual and lifetime cap, beyond which individuals won’t need to pay any more means-tested care fees. The maximum means-tested care fee an aged care home can charge you as of 1 July 2023 is $31,706.83 per year, or $76,096.50 in a lifetime.
- Accommodation Payment: This fee is related to the accommodation provided in the aged care facility. It can be paid as a lump-sum refundable accommodation deposit (RAD) or as daily accommodation payment (DAP), or a combination of both. The amount depends on the facility, its location, and the room type chosen.
- Extra Service Fee: Some aged care facilities offer additional services and amenities beyond the standard care. If an individual chooses to access these services, an extra service fee may apply. This fee is not applicable to all aged care homes.
- Additional Fees: There might be additional charges for specific services or items, such as hairdressing, outings, or special therapies. These are usually optional and can vary between facilities.
If an individual’s income and assets exceed the following thresholds they will be required to contribute to their aged care, over and above the basic daily care fees:
- Income: $31,504.20 per year
- Assets: $57,000
The income test considers:
- Government income support payments
- Interest earned on your bank accounts or other investments.
- Rental income
- Business income
- Superannuation income
- Overseas income
- Private trusts
- Compensation payments
The assets test considers:
- Deposits with financial institutions
- Shares
- Managed investments
- Motor vehicles and boats
- Foreign assets
- Your superannuation balance
- Real estate (outside of the family home)
- Household contents and personal effects
- Any special collections or items of value
It’s important to note that there are rules and regulations in place to ensure that people with different financial circumstances can access aged care services. If someone can’t afford to pay the full fees, the government provides subsidies to cover the gap between the individual’s contribution and the actual cost of care.