Fees for people entering residential aged care from 1 July 2014
As a residential aged care provider, you can ask people in government-subsidised care to pay some fees and costs. Fees vary depending on the resident’s financial situation. These arrangements apply to people who first entered care after 1 July 2014.
This schedule applies to residential and home care recipients who first entered care on or after 1 July 2014. It also applies to those who entered care before this date and have chosen to be covered by the 1 July 2014 arrangements.
Post-1 July 2014 fee arrangements
The fees that may apply to residents entering your care from 1 July 2014 are:
- a basic daily fee
- a means-tested care fee
- accommodation costs
- an extra service fee
- additional service fees.
These fees are outlined below. You can use the Understanding fees for aged care homes fact sheet to help explain fees to your residents.
See the Residential aged care fee scenarios for some simplified examples of how fees are worked out for people with different financial circumstances.
The fee arrangements are different for people who entered into a resident agreement before 1 July 2014. See Fees for People who Entered Residential Aged Care before 1 July 2014.
Opting in to the post-1 July 2014 fee arrangements
Residents who entered care before 1 July 2014 and are transferring into your care will stay on their pre-1 July 2014 fee arrangements. They can choose to be assessed under the post-1 July 2014 arrangements before they enter your service.
You must provide some specific information to these residents. These obligations are set out in Section 13 of the User Rights Principles 2014.
If the resident would like to opt-in to the post-1 July 2014 fee arrangements, you must:
- give them a copy of the New Arrangements for Aged Care from 1 July 2014 – Residential Care document
- have them complete and sign the Continuing Care Recipient Form before they transfer into your service
- submit the signed form to Services Australia with the Aged Care Entry Record Form
Basic daily fee
Everyone who lives in an aged care home can be asked to pay the basic daily fee. This fee is also called a standard resident contribution in aged care legislation. The fee helps to cover the costs of daily living, like meals, cleaning, laundry, heating and cooling.
The maximum fee is 85% of the single basic age pension. The fee amount changes with the pension amount every March and September.
The Department of Veteran’s Affairs pays the basic daily fee for former Prisoners of War and Victoria Cross recipients.
Means-tested care fee
The means-tested care fee is on top of the basic daily fee. The fee is different for everyone because it’s based on their:
Residents can submit an Aged Care Calculation of your cost of care form to Services Australia either before or after starting aged care. Services Australia will complete a means assessment for them to determine whether they:
- need to pay a means-tested care fee
- are eligible for Australian Government assistance with their accommodation costs.
If the resident has a means assessment before they enter your service, they should have a fee advice letter which states whether they need to pay a means-tested care fee and what they need to contribute towards their accommodation costs.
If the resident does the means assessment after they enter your service, Services Australia will let you and the resident know the outcome of the means assessment. For these residents, you may choose to set an interim fee while you wait for the means assessment to be completed.
Once the assessment is complete, Services Australia will set the means-tested care fee at the lower of the resident’s means-tested amount or their cost of care.
When a person first enters your care, you will receive an interim subsidy until you complete the Aged Care Funding Instrument (ACFI). Once you complete the ACFI, you will be paid the subsidy and primary supplements less the means-tested care fee for the resident backdated to their date of entry to your service.
Services Australia will either:
- deduct subsidy amounts already paid from future payments if you owe money
- add subsidy amounts to future payments if they owe you money.
See the Residential aged care fee scenarios for some simplified examples of how the means assessment works for people with different financial circumstances.
You may wish to start collecting fees while waiting for a resident’s means assessment to be finalised. Interim fees are set by providers, not by the Australian Government. You can use the My Aged Care fee estimator or the Residential aged care fee scenarios to determine an appropriate interim fee for the resident.
Read more about charging interim accommodation costs.
Means not disclosed
The resident can choose not to disclose their information to Services Australia. If they choose not to, they will have means not disclosed status. If this is the case, Services Australia will notify you, and you can ask the resident to pay their full cost of care.
You can also ask the resident to pay the agreed accommodation price.
A resident may have been given the means not disclosed status before you complete their ACFI. If this is the case, the means-tested care fee is set to the maximum possible subsidy reduction for:
- activities of daily living – high
- behaviour – high
- complex health care – high
- oxygen supplement
- enteral feeding supplement – non-bolus.
Once ACFI is known, Services Australia will amend the resident’s means not disclosed amount to the ACFI amount at the next quarterly review and backdate it to their date of entry to your service.
Services Australia will either:
- deduct subsidy amounts already paid from future payments if you owe money
- add subsidy amounts to future payments if they owe you money
If a resident is later found to be eligible for Government assistance with their cost of care or accommodation costs, any overpaid amounts must be refunded to them. This change can be backdated to the day they entered care.
If a person requires assistance to complete a means assessment
A person must complete a means assessment to determine their eligibility for Government assistance with residential aged care fees. In addition, a means assessment is required for a resident to be approved for financial hardship assistance.
If the person is unable to complete and sign a means assessment form due to physical or mental disability, a third party may complete and sign it on their behalf. The third party must be registered with Services Australia as a nominee for that person.
The Authorising a person or organisation to enquire or act on your behalf form (SS313) lists third parties who can complete a means assessment and financial hardship form on another person’s behalf, such as a social worker.
Annual and lifetime caps
Annual and lifetime caps limit how much a person will need to pay in means-tested care fees. This includes residents with means not disclosed status.
Annual and lifetime caps are indexed in March and September each year. The cap amount that applies for a resident is the amount current at the time the resident reaches the cap. Find current cap amounts in the Schedule of Fees and Charges for Residential and Home Care.
Once a resident reaches the annual cap, the amount of means-tested care fee they can be asked to pay is reduced to zero. They start paying the fee again on the next anniversary of the date they first entered aged care.
You cannot ask a resident to pay their full annual amount of means-tested care fees upfront, even if they will later reach the annual cap. Fees cannot be charged more than 1 month in advance. Any fees paid more than 1 month in advance must be refunded in accordance with section 11 of the Fees and Payments Principles 2014 (No. 2).
Services Australia will let you know when the resident has reached their annual cap, and when their means-tested care fee can recommence.
Once a resident reaches the lifetime cap they will no longer have to pay any means-tested care fees. The Government will pay the full cost of their care.
Services Australia will let you know when the resident has reached their lifetime cap.
A resident may have paid an income-tested care fee for a Home Care Package before they moved into an aged care home. The amount they have paid in income-tested care fees will count towards their annual and lifetime caps.
The caps only apply to means-tested care fees. Residents may still need to pay the basic daily fee and any accommodation costs.
Means-tested care fee reviews
Services Australia reviews residents’ means-tested care fees quarterly. This ensures each resident is paying the right fee for their circumstances.
A resident’s means-tested care fee may change when:
- their financial circumstances change
- the means testing thresholds are indexed
Services Australia will send you a letter if there is a change to the fee. You may owe the resident a refund as a result.
Residents should contact Services Australia if they have a major change in their financial situation.
All residents must agree to an accommodation price before they enter care. The agreed price cannot be more than your published maximum accommodation payment amount for that room, but you can agree a lower amount.
The maximum price for a room cannot exceed a refundable deposit of $550,000 (or the equivalent daily payment) unless approved by the Aged Care Pricing Commissioner.
Whether you can ask the resident to pay the agreed amount will depend on their means assessment.
Services Australia will let you and the resident know if:
- the resident will need to pay the agreed accommodation price
- the Australian Government will pay some or all of the resident’s accommodation costs through the accommodation supplement
If the resident is eligible for Government assistance with some of their accommodation costs, they will need to pay their contribution as either:
- a refundable accommodation contribution (RAC)
- a daily accommodation contribution (DAC)
- a combination of these two
If the resident is not eligible for Government assistance with their accommodation costs, they will need to pay the full costs of their accommodation as either:
- a refundable accommodation deposit (RAD)
- a daily accommodation payment (DAP)
- a combination of these two
You must not require a resident to pay any amount of their accommodation costs as a lump sum RAD or RAC before they enter your service. It is up to the resident how they choose to pay for their accommodation. If they do not make a payment choice within 28 days of entering your service, you can only ask them to pay by daily payments (DAP or DAC).
In the accommodation agreement, you must record:
- the resident’s date of entry to care
- the agreed room price for the resident’s accommodation
- all possible payment arrangements for the resident
Read about managing accommodation payments and contributions for residential aged care.
Extra service fee
Providers with extra service status can charge an extra service fee.
Extra services are hotel-type services, such as better-than-average accommodation, food and services.
Providers with extra service status can charge GST for any item included in the extra service package that is not GST-exempt.
Additional service fees
With the resident’s agreement, you can charge a fee for services that:
- you can demonstrate are better than what must be provided under Schedule 1 of the Quality of Care Principles 2014 (the Principles)
- are not specified care and services in Schedule 1 of the Principles
- are not covered by the payment of an extra service fee or an accommodation payment
- are not services you’re required to deliver under your responsibilities as a provider
There are some types of care and services in Schedule 1, Part 3 of the Principles that, with the resident’s agreement, may attract an additional service fee based on the resident’s Aged Care Funding Instrument (ACFI) assessment.
For example, you can charge a fee for extra:
- allied health services
- incontinence aids
- mobility equipment
- specialised bedding
What you cannot charge an additional service fee for
You cannot charge additional service fees for care and services in Schedule 1, Part 3 of the Principles if the resident:
- has a high category in 1 or more domains in their (ACFI) assessment
- has a medium category in 2 or more domains in their ACFI assessment
- doesn’t have an ACFI classification
- is a high-care residential respite care recipient
You cannot charge residents for ‘asset replacement’ and ‘capital refurbishment’ type fees. This includes, but isn’t limited to:
- maintenance inside and outside the aged care home
- any repairs or replacements necessary because of normal wear and tear
- general refurbishment of the resident’s room after they have left the aged care home
- services or activities that would form part of the general operation of the aged care home, or are required in order to deliver residential care to the individual
- employment of administration staff where the staff member is primarily undertaking activities related to the general operation of the aged care home
- capital costs, asset management or replacement
Read more about managing additional service fees, including what to do if you have charged, or are charging fees that aren’t permitted.
When can fees vary?
Fees can vary when:
- a resident goes on temporary leave
- a resident gets financial hardship assistance
- a resident who entered care before 1 July 2014 is transferring into your care and chooses to be assessed under the post-1 July 2014 fee arrangements
- your accommodation supplement rate changes
- rates are indexed
- a resident’s ACFI changes
- a resident reaches their annual or lifetime caps on the means-tested care fee
Services Australia will advise you of these changes after the next quarterly review.
Residents in financial hardship can apply for help if they need it. You can also apply for financial hardship assistance on their behalf. Financial hardship assistance can help to pay the basic daily fee, the means-tested care fee and daily accommodation payments.
Agreeing on and recording fees and payments
- discuss and agree on any fees before residential aged care can begin
- include the agreed fees in the resident agreement, accommodation agreement and extra services agreement, although these might be one document
If you are charging additional service fees, you must provide the resident with an itemised account of the services and their costs.
The itemised account should clearly list the individual services and their costs. It’s not enough to group services together or give an overall cost.
The frequency of providing the itemised account should be:
- agreed with the resident
- in a reasonable timeframe — for example, monthly if you charge fees on a monthly basis
- only while the resident is accessing, and benefiting from, the agreed additional services
Residential aged care and home care fees contact
Contact us about fees for residential respite care, home care (basic daily fee, income tested care fee) and residential aged care (means tested care fee, income tested fee, additional service fees, time extensions to enter into accommodation agreements, accommodation payments, bonds and charges).