How Much Does Residential Aged Care Cost?
Whether you are looking for an aged care home for yourself or a loved one, it can be a stressful and confusing search. One of these concerns is probably the question, “How much does aged care cost?” The answer to that question depends on what type of care is needed and the financial situation of the person in need.
As stated in the article Aged Care Home Costs, “the Australian Government subsidises aged care homes to keep costs reasonable and affordable.” The individual is expected to contribute to the cost of their aged care, but not beyond their financial means.
When looking at residential aged care, costs are broken down into four categories: basic daily fee, means-tested care fee, accommodation care costs, and fees for extra and additional services.
The components of each category are explained below:
Basic Daily Fee
Almost everyone pays at least a portion of the basic daily fee, which includes such services as food, electricity, laundry, heating, and cooling. Aged Care 101 explains that the Australian Government Department of Human Services sets the basic daily care fee based on 85% of the single Age Pension. This fee is re-assessed twice a year, to correspond with the indexing of the Age Pension. Certain veterans, though, may be exempt from this fee. The Department of Veterans Affairs pays this fee for former Prisoners of War and Victoria Cross.
Means-Tested Care Fee
Depending on assessed income and assets, and the type of care needed, a means-tested care fee may be charged. This fee is applied toward care provided above the basic daily fee up to certain annual and lifetime limits. An assessment is required to determine whether or not the means tested care fee will be charged and, if so, the amount. The Permanent Residential Aged Care – Request for a Combined Assets and Income Assessment is administered by the Department of Human Services.
Accommodation Care Costs
The accommodation care costs, also known as a Refundable Accommodation Deposit (RAD), are set by the care home and cover such expenses as facility upkeep and maintenance. These costs can vary significantly from care home to care home and are influenced by the amenities provided. As with the means-tested fee, these costs may be subsidised by the Australian Government based on income, as determined by the combined assets and income assessment. The RAD is fully refundable to the person, or their estate when they leave the home.
Extra and Additional Services
The final cost category, fees for extra and additional services, is optional and fully the responsibility of the individual living in an aged care home. These fees must be advertised clearly, agreed upon in a resident contract, and itemised on financial statements. They may include such conveniences as paid TV, internet, beautician services and massage therapy.
There are many reputable aged care facilities. Anglican Care is one such provider that takes into account the needs of the whole person – physical, spiritual and financial – in offering care. Understanding that every person has unique concerns and wishes, we are happy to assist prospective residents with their financial questions. Contact us today.