Understanding Aged Care Financials

Costs

Homes may be government funded hostels, standard nursing homes, 'extra service' nursing homes and the private sector. The costs are structured differently in each sector. Whether you are a pensioner, part pensioner, blind pensioner or non-pensioner will affect the payment.

Daily care fees are the same whether you are a resident in a low level or high level care home.

These fees have two components:

Basic daily care fees are based on the pension and are indexed.

Income tested daily care fees for residents with a higher income.

Part pensioners and non pensioners may be required to pay an additional income tested fee.

The assessment is done by Centrelink or the Department of Veterans' Affairs.

Accommodation payments.

Accommodation bond.

You may be asked to pay an accommodation bond if you enter hostel care. It can also apply in a low level or high level home offering 'extra service.' In effect, the bond is an interest free loan to the home and most is refunded to the person or their estate when they leave. If you can't afford it then you won't be asked to pay it. The bond is not treated as an asset by Centrelink and DVA pension Accommodation charge.

A high level care home may require payment of an asset tested accommodation charge. It can apply for a maximum of five years. If you pay an accommodation bond to a home you cannot also be asked to pay an accommodation charge.

Concessional and fully supported residents. If you cannot afford to pay the accommodation bond or accommodation charge you may be eligible to be a concessional or assisted resident. All providers must take a minimum number of concessional and assisted residents and they receive extra Australian Government payment for these residents.

Concessional residents include means-tested pensioners who have not owned their own home in the past two years and who have assets of less than two and a half times the annual single basic age pension.

Assisted residents must meet the same criteria as concessional residents but can have assets of more than two and a half times and less than four times the annual single basic age pension. There are also Hardship Provisions for people who would face genuine hardship if they were to pay an accommodation charge.

Extra service fee. If you are in a home with 'extra services' there will be an additional fee. The amount must be specified on the contract which you sign before taking up residence.

Respite Care. If you enter a residential aged care home for a short respite there will be a daily fee but there are no accommodation payments.

Rent Assistance. You may be able to offset some costs with Rent Assistance. It can be paid if the home you are living in does receive a subsidy from the government for your care costs.