Aged care fees and charges can vary depending upon the personal financial situation of each resident.
Some fees are set by the Commonwealth and other fees are set by, and published by, the aged care provider - and can be sometimes reduced by discussion with the aged care provider.
There are 5 types of fees and charges relating to Commonwealth subsidised aged care:
The Basic Daily Care Fee (BDCF) is set by the Commonwealth and is paid by all residents - permanent or respite - regardless of income or asset level, to assist with the cost of care and living expenses.
The BDCF is 85% of the single basic aged pension and is reviewed every six months by the Department of Social Services in line with increases to the Aged Pension - on the 20th March and 20th September every year.
The BDCF is $49.42 per day (from 20th September 2017)
The Means Tested Fee (MTF) is a daily fee determined by the Commonwealth, based upon a residents income and assets, to further contribute to the care costs.
Full pensioners and ex-Prisoners of War do not pay MTF.
There are annual and lifetime caps that apply to MTF. Once these caps are reached, the Commonwealth will pay the MTF for the resident.
Some aged care homes will charge an interim MTF of around $ 50 per day for all residents, except for those residents who have an Accommodation contribution estimated to be less than $ 54.39 per day, who will be charged an interim MTF of $ 15 per day until the result of the means assessment has been received by the aged care provider.
Depending on your income and assets you may be asked to pay for accommodation at the aged care home.
Some residents will have their accommodation fees met in full, or in part, by the Commonwealth, while most residents will be required to pay the accommodation fee agreed with the aged care provider.
The fee for accommodation that you may be asked to pay will be based upon your assets and income, and will be one of the following:
Most rooms at aged care homes have a maximum advertised Refundable Accommodation Deposit (RAD) published.
This is the maximum fee for the room that the aged care provider is allowed to request for the room, but many residents will pay less that the maximum price, based upon discussions with the aged care provider.
The RAD can be considered a bond or a "gift" from the resident that is deposited during the resident's stay and will be refunded when they are no longer a resident. The RAD is not being used to purchase any asset by the resident. The resident does not own the room. The aged care provider uses the interest received from the RAD to pay for maintenance of the building and provide a pool of capital for expansion. RAD's have been steadily increasing over the years , essentially in line with increases in real estate values.
Information about the cost of the RAD per room, including size and key features of the room can be found on the aged care provider's website and the My Aged Care website.
Residents can choose to pay their accommodation fees by either:
A resident has 28 days from the date of admission to decide the mode of payment of the accommodation costs.
A RAD is fully refundable lump sum deposit - RAD is refunded in full when the resident departs the care home.
A resident has 6 months to pay the full amount of the RAD.
A DAP is the daily equivalent fee of a RAD. The DAP is calculated using the Maximum Permissbile Interest Rate (MPIR) set by the Commonwealth. The MPIR is currently 5.70% pa (as at 1st October 2017).
Accommodation payments by DAP are non refundable.
DAP will be charged on any unpaid accommodation amount until the full lump sum of the RAD is paid.
This is an additional daily fee that only applies to residents who occupy an extra service room at an aged care home.
Extra Service is a term that applies to premium accommodation and a suite of personal and lifestyle services - it does not relate to the care being provided.
ESF will vary according to the facility and the services provided.
ESF can range from $12 per day to $120 per day.
ESF can be negotiated with the aged care provider.
Usually, a resident can choose to opt out of the ESF, after discussions with the aged care provider.
The Asset Replacement Contribution (ARC) is slowly being implemented across a number of aged care provider groups (primarily the publicly listed "for-profit" aged care providers).
The ARC is applicable to all RAD, RAD/DAP, DAP, and RAC / DAC paying residents.
The ARC is a fixed amount for all payers regardless of payment mode and some aged care providers are indexing increases by 1.5 % each 1st February and 1st August each year. For example at REGIS aged care homes the ARC is capped at 30 months from the date of admission.
A "low means" resident is eligible for a full or partial accommodation supplement from the Commonwealth.
For a low means resident the Commonwealth will contribute to the cost of their accommodation.
All residents need to complete a Means Test Assessment, which will be used to determine what a resident will pay in aged care.
If a potential resident chooses not to have a means tested assessment then maximim fees for MTF will be automatically applied.