What are the different costs of residential aged care?

Making the choice to relocate the one you care for to a residential aged care facility is a big decision and you need to have peace of mind that they will receive the best care possible.

There are many benefits to considering residential aged care for loved one. An aged care home offers improved access to the care services older people are likely to require. From regular clinical and personal needs to periodic mental health and dental check ups, residential care facilities can tailor their services to the person you love, ensuring they maintain the best possible quality of life.

Care homes also offer the chance for residents to integrate with a community of like-minded individuals and partake in a wide range of social activities coordinated by dedicated staff teams. Religious fellowship groups, societies, hobby clubs - the person you love has the chance to enrich their social life in residential aged care.

However, alongside all the positives of choosing a respected care provider, the costs of residential aged care ultimately play a role in the aged care home you select. Here's a guide to the costs of accommodation and care services in residential aged care facilities.

The four fees you may need to pay

The cost of aged care in Australia is divided into four key areas. Not all individuals who want to enter residential aged care have to pay these fees - the final amount is dependent on factors, including your income and eligibility for government subsidies. The four costs are:

1) Basic daily fee

Everyone relocating to residential aged care has to pay this. This price is fixed at 85 per cent of the single person rate available through the basic age pension. The fee holds your place in the aged care home and is still payable if you exit the care facility on social leave or for hospital treatment

2) Means-tested care charge

The Department of Human Services works out this cost based on your income and assets assessment and ongoing care expenses. If your personal wealth is under a certain threshold, the government will cover this payment. Without an assessment you will be ineligible a subsidy on this charge. There are also annual and lifetime financial caps to limit your contribution to the means-tested care fee.

3) Accommodation payment

This figure is different for each aged care home and encompasses a lump sum (called a refundable accommodation deposit/RAD) or daily accommodation payment (DAP).

• RAD - This deposit is a standard bond price set by each individual care facility and depends on the quality, location and features of the accommodation in question.
• DAP - This form of payment breaks down the DAP from a lump sum into periodic instalments.

Your income and assets assessment determines how much government support you receive when covering accommodation costs. The rates advertised on the care facility's website and on My Aged Care are the maximum that an aged care home can charge.

4) Additional service fees

These costs apply to any extra payments your chosen residential aged care home may require. Any additional expenses should be published publicly and clearly itemised in your residential agreement. Charges can cover higher service class in your aged care home or improved accommodation options. It can also cover external fees the residential home may have to pay to meet your care needs.

My Aged Care provides a residential facility fee estimator for those entering aged care, which can be helpful when preparing yourself and the one you love financially.

Determining your eligibility for government support

Organising your ACAT evaluation

To figure out eligibility for government-subsidised residential aged care, you're required to organise an assessment with an Aged Care Assessment Team (ACAT). This evaluation is free and performed by a doctor or other healthcare professional. It will take place in your loved one's home and last for around one hour. Here the assessor will analyse your dependent's care needs and their suitability for different types of aged care home.

Arranging your means test

You will also have to arrange your financial assessment through the Department of Human Services. This process will take time, so ensure that you and your dependent begin this assessment well before you need to relocate. Once you have received this letter, the means test is valid for 120 days.

Checking your eligibility for financial hardship assistance

Certain individuals can apply for financial hardship assistance through the Department of Human Services. This subsidy is reserved for those unable to pay for their aged care facility costs due to factors outside of their control, such as medical expenses. If granted, the Federal Government will cover some or all of your care costs, aside from any additional or optional service fees charged by your aged care home.

How important is choosing the right residential aged care facility?

Both you and the person you look after have to make this important care choice together. You should also both consider how the future may affect your decision. Will your preferred facility still be suitable if the person you love requires more complex care down the track? Can they choose switch accommodation in the future? Does the facility's social activities fit all your loved one's interests?

Anglicare has residential aged care homes to meet the needs of every individual throughout the Sydney and Illawarra region. Our focus is on making the care experience for the person you love unique. No two family homes are alike, so why should a residential aged care home be different?

It's very important when deciding on a suitable facility to visit and speak with the staff and residents. They can provide you with inside advice on what the aged care home is like. You can also discuss your concerns around the costs of residential aged care individually with our respectful and compassionate nursing and administration team.