23 January 2023
Aged care fees and costs guide
7 min read
Aged Care Fees and Costs Guide
Moving into a residential aged care home is a big decision and it’s important to understand the different fees and charges you may need to pay. These are dependent on the aged care home you choose, the level of care you need, the services available and your individual ability to pay for these.
Services Australia (formerly The Department of Human Services) assesses and determines your financial circumstances and your ability to pay for your required aged care services.
We recommend seeking independent financial advice when you start looking to move into a residential aged care home to understand your situation and the best payment option for you.
If you’re looking for other aged care services such as home care support, you can visit My Aged Care.
Aged care costs are broken down into four areas:
a. Care costs relate to clinical care you will receive while living in an aged care home and can be partially or fully funded by the government. The costs will depend on the level of care you need (determined by a care assessment) and your ability to contribute to the cost (determined by a means assessment). If you’re required to contribute to care costs, it’s called a means-tested care fee and it is a daily fee. If required to contribute to this, it’s a daily fee.
2. Accommodation Costs
a. Accommodation costs depend on the specific home and room you choose. The amount you contribute towards accommodation costs is assessed by Services Australia following a means assessment. Depending on your means assessment, if you are required to pay for your accommodation in full or contribute to the cost, there are several options available. The government can subsidise your accommodation costs to a maximum of $55 per day, meaning you may need to pay part of the cost.
3. Living (also known as the basic daily fee)
a. Living costs are for a range of services you can access once you’re living in a home. These include all day-to-day services like meals, laundry, cleaning and lifestyle activities and a set of additional services. You can never be charged more than 85% of the single age pension for your basic daily fee at a government-subsidised aged care home. As a guide as of 20 March 2023, the maximum basic daily fee was $58.98. Because this is tied to the pension, it goes up twice per year.
4. Additional Services
a. There are extra costs depending on the choices you may. For example, some aged care homes offer rooms that are a higher standard or larger than others and come with extras such as:
i. Paid/satellite tv
iii. Onsite hairdresser, beautician
iv. Special therapies such as massage, aromatherapy, hydrotherapy
v. Facilities like a gym, pool, cinema, workshop, library, et.
vi. Plus, a wider choice of meals and inclusions such as beer, wine and spirits.
Basic Daily Fees in in Aged Care
Daily Care Fees are paid by all residents in care. These covers living costs such as meals, power and laundry. For some people this is the only fee they are required to pay.
The basic fee is set at 85% of the single person rate of the basic aged pension. This works out at $58.98 a day (changes 20 March and 20 September, annually). This figure is the same for singles and members of a couple.
Means Tested care fee
This is an additional contribution towards the cost of care that some people may be required to pay. Department of Human Services (Centrelink) will work out if you are required to pay this fee based on an assessment of your income and assets and they will advise you of the amount.
There are annual and lifetime caps that apply to the means-tested care fee. Once these caps are reached, you cannot be asked to pay any more means-tested care fees.
There is an annual limit on the maximum amount you can be asked to pay in means tested care fees. This annual limit is $31,706.83. Once you reach this, the Australian Government will pay the rest of your means tested care fees to the provider.
There is lifetime cap on income tested care fees (in home care) and means tested care fees (in residential care) of $76,096.50. Once you have reached this cap you will not have to pay any further income or means tested care fees during your lifetime.
Department of Human Services (Centrelink) will let you and your provider know when you have reached the annual or lifetime caps. The lifetime cap only applies to income tested care fees (and means tested care fees in residential care). You may still need to pay the relevant basic fee and any accommodation costs in residential care.
Your family home will continue to be exempt from any means testing if your spouse or dependent adult child (referred to as a protected person) is living in the home. Your home will be included in the means tested if a protected person does not live there; but its value will be capped at a maximum of $186,331.20.
Any income-tested care fees you have paid since 1 July 2014 in a Home Care Package prior to moving into an aged care home will also contribute to your annual lifetime caps.
For further information, click here for advice at Estia Health call 1300 682 833.