Aged care is a vital service available to all in Australia, regardless of their financial circumstances. For those who are concerned about the aged care costs and whether they are being able to afford it, there are various options and strategies available to help you manage the costs effectively.
Understanding Aged Care Costs
There are four different types of fees for those who decide to live on a residential aged care or nursing home:
- Basic Daily Care Fee: Every resident, regardless of financial status, is required to pay a Basic Daily Care Fee. This fee covers essential day-to-day living expenses such as meals, cleaning, facility management, and laundry. The government sets this fee at 85% of the standard full aged pension. It can be paid directly to the aged care facility or deducted from your pension.
- Means-tested Care Fee: The Means-tested Care Fee is determined based on your income and assets, including your home if you own one. If your income and assets exceed a certain threshold, you may be obligated to pay this fee, which contributes to your personal and clinical care.
- Accommodation Costs: The cost of your room in a nursing home or residential aged care facility can be managed through either a Refundable Accommodation Deposit (RAD) or a Daily Accommodation Payment (DAP). The choice between RAD and DAP depends on the outcome of a means test assessing your income and assets.
- Extra/Additional Fees: Some aged care facilities may impose additional fees for optional services, such as pay TV. These fees are typically not covered by government funding and are entirely optional.
Four Steps to Receiving Government-Funded Aged Care:
To ensure that you can afford government-subsidised aged care services, follow these four essential steps:
- Check Eligibility: To be eligible for government-subsidised aged care, you must meet specific criteria, including being aged 65 years or older (or 50 years or older for Aboriginal and Torres Strait Islander individuals) and needing assistance to maintain your health and well-being. You can use the eligibility checker on the My Aged Care website to assess whether you meet the requirements for an assessment.
- Complete an ACAT Assessment: Register with My Aged Care and submit an application for an assessment by the Aged Care Assessment Team (ACAT). The ACAT assessment involves a face-to-face interview to evaluate your current circumstances and care needs.
- Income and Assets Test: An income and assets (means) test will determine whether you are required to pay a Means-tested Care Fee and if the government will contribute to your accommodation costs. This assessment is conducted by Services Australia or the Department of Veterans’ Affairs (DVA). Those who receive a means-tested pension from Centrelink or DVA may not have to complete the income and assets test. To find out more about this, call Services Australia on 1800 227 475 or the DVA on 1800 555 254 before getting started.
- Approval and Support Plan: Once approved for government-subsidised aged care, you will receive a letter containing your support plan and referral code(s). With this information, you can select a government-supported room in a residential aged care facility that aligns with your needs.
Read more about how to find and choose a residential aged care facility: 15 Point Checklist: How to Choose a Residential Aged Care Facility
At My Care Journey, we provide a complimentary and unbiased service designed to assist you in discovering residential aged care vacancies that align with your financial considerations, preferred location, and specific needs and preferences. Furthermore, we offer invaluable support and expert guidance to support you through every phase of your aged care journey.
Frequently Asked Questions on Aged Care Costs
How do I find a Financial Advisor?
We highly recommended to consult with a financial advisor before entering residential aged care. You can access free financial information through Services Australia’s Financial Information Service (FIS) for guidance.
Can I negotiate the costs for a nursing home?
The Basic Daily Care Fees are government-set and non-negotiable. You can potentially negotiate accommodation costs and additional fees with your chosen facility.
How much savings can I have to receive funded aged care?
Australia does not have a specific savings threshold for aged care. Savings are considered as part of an individual’s overall assets during income and assets assessments.
Can I avoid paying for aged care if I give away my assets or money?
Attempting to give away assets explicitly to avoid care fees is referred to as deprivation of assets. Such assets may still be assessed during the aged care funding application process.
What if I cannot afford to pay the costs of aged care?
If, due to circumstances beyond your control, you cannot afford any aged care costs, you can apply for financial hardship assistance through Services Australia. Eligibility criteria include completing an aged care means assessment and meeting specific asset and gifting limits.
How can I apply for Financial Hardship Support?
To be eligible for financial hardship assistance you must complete an aged care means assessment, have assets less than $41,496 and have not gifted over $10,000 in the past 12 months or more than $30,000 in the 5 years before that.
Services Australia can also check if you are eligible for financial assistance from other government programs, pensions, or benefits.
For more information on financial hardship assistance and how to apply, visit Financial hardship assistance | My Aged Care.
In Australia, ensuring that you can afford aged care is a priority. With the right information and support, you can navigate the aged care system effectively, allowing you or your loved ones to receive the care needed while managing costs. My Care Journey offers a valuable and free service to assist you throughout this important journey. Get in touch with us today and find out how we can help you.
