Publications

The Accommodation Charge

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.

You may download this document in PDF format:

PDF printable version of Information Sheet 15 - The Accommodation Charge (PDF 109 KB)

Accommodation payments

There are two types of accommodation payments that may be payable to aged care homes:

• Residents requiring high care other than on an extra service basis may be asked to pay an accommodation charge;
• Residents requiring low care or entering an extra service place (at high or low care) may be asked to pay an accommodation bond (see Information Sheet The Accommodation Bond).

Respite residents cannot be asked to pay an accomodation payment.

What is an Accommodation Charge?

An accommodation charge (the charge) is the daily amount you may be asked to pay when you enter high care. It is fixed from the date you enter care until you are discharged from care for a period greater than 28 days. You cannot be asked to pay the charge more than a month in advance. By law, it must be used by the home to improve building standards, and the quality and range of aged care services provided.

A charge can only be charged by an aged care home that is certified as meeting minimum building and care standards. You are entitled to know the home's certification status.

Residents who enter care with assets in excess of $35,500 may be asked to pay an accommodation charge.

Top of page

How much will I pay?

The Department of Health and Ageing will write to you to advise the maximum amount of accommodation charge you may be asked to pay, based on the value of your assets. If you choose not to have an assets assessment, or your assets are above $91,410.40, the amount of accommodation charge you may be asked to pay will be the maximum applicable rate. This is currently $21.39 per day for pensioners and $26.88 per day for self-funded retirees.

Your accommodation charge amount will be calculated by the Department of Health and Ageing based on information it receives from Centrelink and the Department of Veterans’ Affairs.

The agreed accommodation charge must be included in the charge agreement or as part of a resident agreement. The agreement must also set out your rights and responsibilities.

Can I defer payment of my Accommodation charge?

Yes. You can agree with the aged care provider to defer the payment or pay it from your estate. The aged care provider is entitled to charge interest on the unpaid amount at no more than double the lowest pension deeming rate applicable at the time of entering the home (currently 8%).

Determining a resident's assets

The maximum amount of a resident's accommodation bond or charge depends on the amount of their assessable assets.

Centrelink and the Department of Veterans' Affairs (DVA) undertake assets testing for entry into permanent residential aged care on behalf of the Department of Health and Ageing. Centrelink undertakes all assessments except those for people who receive a means tested pension from DVA. Asset assessments can be undertaken before a person enters residential aged care.

To apply for an asset assessment you must complete a "Permanent Residential Aged Care – Request for an Assets Assessment" form. This form is available from the Aged Care Assessment Team who determines eligibility for residential aged care or by contacting the Aged Care Information Line on 1800 500 853.

An assets assessment is not compulsory unless you want to find out if you are eligible for government assistance with your accommodation costs for permanent residential aged care.

However, if you choose not to have an asset assessment, you can be asked to pay the maximum amount of accommodation charge.

Top of page

Will my home be "protected"?

The value of your former home will not be counted as an asset if, at the time of the assets assessment or date of your entry to care (which ever is the earlier):

• your spouse or dependent child is living there;
• a carer who is eligible for an income support payment has been living there for at least two years;
• a close relative who is eligible for an income support payment has been living there for at least five years.

Aged care residents who pay an accommodation charge are able to rent out their former home without the value of the home or the rental income affecting their aged care fees and, if applicable, their pension.

The former home is exempted from the pension assets test for two years for all people entering residential care (and longer if the person's partner remains living in the home).

Gifting

Assets gifted away from 10 May 2006 over $10,000 in a single financial year or $30,000 in a five financial year period will be included in your assets assessment.

As a result, you may not be eligible for government assistance with your accommodation costs.

If in any doubt, you should call Centrelink on 1800 227 475 or DVA on 133 254.

Top of page

What if I move to another aged care home?

If you move from one aged care home where an accommodation charge was payable to another aged care home where an accommodation charge is also payable, the level of your charge in the new home will be capped at the maximum accommodation charge you were eligible to pay in the previous aged care home.

You cannot be asked to pay a higher charge in the new home unless there is a gap of more than 28 days between leaving the earlier home and entering the new home.

What if I move from a low care home to a high care home?

If you paid a bond on entry to low care and subsequently move, within 28 days, to another aged care home to receive high care you may, with the agreement of the aged care provider, either:

• have the balance of the bond fully refunded from the previous aged care home and (if liable) pay an accommodation charge in the new aged care home (in this case you will need to re apply for an aged care assets assessment in order for the Department of Health and Ageing to work out the maximum charge you are eligible to pay) or
• transfer the balance of the bond to the new aged care home. In this case only the balance (if any) of the five year retention period will carry over to the new aged care home.

What are the safeguards for residents?

You can only be asked to pay the charge if you can afford to do so.

You cannot be asked to pay the charge unless you have entered an agreement with the aged care provider. This agreement sets out your rights and responsibilities. You have up to 21 days after entering an aged care home to enter into the charge agreement.

Where a person is unable to enter an agreement due to mental impairment, the agreement must be entered into within 21 days of a guardian being appointed.

You can only agree to pay a charge when you enter the aged care home. If your circumstances change after you enter the aged care home, you cannot be asked to pay more than you originally agreed to when you entered the home.

Top of page

What if I am not eligible to pay a charge?

If you cannot afford to pay the charge you will not be asked to do so, but you will still get the care you need. Aged care providers receive a full rate of Government assistance for residents in a certified residential aged carte facility whose assest are assessed as less than 2.5 times the maximum annual single basic age pension (currently $35,500).

Financial Hardship Assistance

Financial hardship provisions are there for people who would face genuine financial hardship if they were required to pay an accommodation payment. To receive an application for financial hardship assistance call the Aged Care Information Line on 1800 500 853.

Financial advice

Financial decisions, for instance about how you pay an accommodation charge, can have different effects on pensions, aged care fees and tax. You are advised to seek expert financial information to help make the decisions that are best for you.

A free Financial Information Service is available through Centrelink. To make an appointment call Centrelink on 13 10 21.

Disclaimer: This document is a guide for residents who first entered care on or after 20 March 2008 only, and cannot take account of individual circumstances. The Department of Health and Ageing recommends that you seek appropriate professional advice relevant to your particular situation. Top of page