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Information Sheet 9 - Fees and Charges for Residential Aged Care - An Overview

Information sheet providing detailed information in relation to community and residential care issues for older Australians, young people with disabilities and their carers and the associated costs.

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Residents in Australian Government subsidized residential aged care can be asked to pay fees as a contribution towards accommodation costs, living expenses and the cost of their care. There are strong protections in place to ensure that care is affordable for all residents. The Government recognises that not all residents can pay for the entire cost of the care they receive, so provides substantial subsidies to assist with these costs.

Details on dollar amounts have not been included in this information sheet. For this detailed information, residents or their nominated representatives can call the Aged Care Information line on 1800 500 853 ^*.

What are the fees

A resident may be charged for the care and services provided, as follows:

• Basic daily fee – as a contribution toward accommodation and costs of daily living.
• Income tested fee – as a contribution towards the costs of care.
• Accommodation payment – as a contribution towards capital accommodation costs.
• Extra services charge – where extra service applies to residents occupying extra service places (both permanent and respite) for the provisions of a significantly higher standard of accommodation services and food.
• Additional service fee – where the resident requests or agrees to additional services (such as newspapers and hairdressing).

The level of the residents daily fees and accommodation payments can be negotiated between the residents and/or their representatives, and the aged care providers.

However, the Australian Government sets the maximum level of the daily fees and accommodation payments.

Basic Daily Fees

All residents in aged care, including respite residents, can be asked to pay a basic daily fee as a contribution towards accommodation costs and living expenses, like meals, cleaning, laundry, heating and cooling.

The maximum basic daily fee for all permanent residents who enter an aged care home on or after 20 September 2009 is 84 per cent of the annual single basic age pension. This is also the maximum fee for all respite residents, excluding those receiving respite care on an extra service basis.

Note: The Department of Veterans’ Affairs pays the basic daily fee on behalf of all former prisoners of war.

Income Tested Fee

Residents (other than respite residents) may be asked to pay an income tested fee, depending on their income and level of care they require (See information sheet on – Income Tested Fees for Residential Care for more detail.)

This fee is paid directly to the aged care home. No resident will pay more than they can afford, and no resident will pay more than the cost of their care.

The Australian Government sets the maximum amount a resident can be asked to pay to the aged care provider.

Accommodation Payment

The two types of accommodation payment are accommodation bonds and accommodation charges. (See information sheets on Accommodation Bonds and Accommodation Charges for more detail).
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Accommodation Bond

Residents with sufficient assets who require low (hostel) level care or who enter an extra service place may be asked to pay a bond.

The Australian Government sets the minimum assets a person must retain when establishing the bond amount. A person cannot, therefore, be charged a bond amount that would leave them with less than the minimum asset amount. Where bonds are payable, the amounts and payment methods can vary and should be negotiated with the aged care provider.

The aged care provider is able to retain a monthly amount from the bond for the first five years, and the balance of the bond is repaid to the resident or their estate when they leave the aged care home.

Accommodation Charge

Residents with sufficient assets who require high (nursing home) level care (but not on an extra service basis) may be asked to pay an accommodation charge. While the Department of Health and Ageing will write to the residents to advise the maximum amount of accommodation charge they can be asked to pay (based on the value of their assets), the actual amount payable can be negotiated between the resident and the aged care provider.

If a person chooses not to have an asset assessment, or has assets above the threshold, the amount of the accommodation charge they may be asked to pay will be the maximum applicable rate.

Financial Information

Financial decisions, for instance about how to pay an accommodation bond or charge, can have different effects on a person’s pension, aged care fees and tax. People are advised to seek expert financial information to help make these decisions.

A free Financial Information Service is available through Centrelink, who can also assess a person’s assets and income for the purposes of establishing aged care fees.

To make an appointment call Centrelink on 13 23 00 ^*.

Nominees

A person may prefer the Department of Health and Ageing to deal directly with someone else, on their behalf, about their residential aged care fees.

Anyone who wants to nominate another person to represent them in this way should complete an appointment of a nominee form and return it to the Medicare Australia office in the relevant state or territory.

Forms are available from service providers, the Department of Health and Ageing’s website and the Aged Care Information Line on 1800 500 853 ^*.

Further Information

Further information can be found at www.agedcareaustralia.gov.au or by calling the Aged Care Information Line on 1800 500 853 ^*.

Note: Reference to a partner and/or couple includes both opposite and same sex couples.

*Cost of phone calls

• Calls to 1800 numbers are generally free to the caller when made from a land line.
• Calls to 13 or 1300 numbers are charged at a low fixed amount to the caller when made from a land line.
• All calls made from mobile phones are charged at the rates applicable to each phone provider.
• All calls made from public phones are charged at the rates applicable to each phone provider.

Disclaimer: This document is only a guide to the Government’s law and policies, and cannot take account of individual circumstances. The Australian Government Department of Health and Ageing recommends that you seek appropriate professional advice relevant to your particular situation.

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