Pre 1 July 2014 residential aged care fee arrangements

Current rates

A resident on the pre 1 July 2014 fee arrangements may pay up to 5 types of fees:

• a basic daily fee
• an income tested fee
• accommodation costs
• an extra service fee
• additional service fees.

Read more about fees for people entering residential aged care from 1 July 2014.

Agreeing on and recording fees

You must:

• discuss and agree on any fees before residential aged care can begin
• include the agreed fees in the resident agreement, accommodation bond agreement, accommodation charge agreement and extra services agreement.

Read more about:

• managing agreements
• managing fees and accommodation costs.

Basic daily fee

You can ask every resident to pay a basic daily fee. This fee, also known as a standard resident contribution, helps cover the costs of daily living, like meals, cleaning, laundry, heating and cooling.

For pre 1 July 2014 residents, the fee is either:

• standard
• non-standard
• protected.

The standard fee amount is 85% of the single basic age pension. The amount changes with the pension amount every March and September.

The Department of Veterans' Affairs (DVA) may pay the basic daily fee for former Prisoners of War (POWs) and Victoria Cross (VC) recipients. Find out more about payment of the Basic Daily Fee to ex-POW and VC holders on the DVA website.

You may receive the 2012 basic daily fee supplement for residents who did not get any financial support to meet the increase that occurred on 1 July 2012.

Eligibility for the standard, non-standard and protected resident contributions are in Section 58-3 of the Aged Care (Transitional Provisions) Act 1997.

Non-standard resident contribution

Some residents pay the non-standard resident contribution rate until their circumstances change or they leave care.

To pay the non-standard resident contribution rate, a resident must have first entered residential aged care before 20 March 2008. On 19 September 2009, and on each day since then, they must not have had a dependent child and must either:

• not receive an income support payment
• have paid an accommodation bond that is more than 10 times the basic age pension amount at the time of entry into care
• have not provided income and asset information to Services Australia.

If a resident no longer meets the criteria on or after 20 September 2009, they will pay the standard basic daily fee.

Protected resident contribution

An aged care resident pays a lower rate of basic daily fee if they were in care on 19 September 2009, and on that day:

• they were a self-funded retiree or part pensioner
• their private income was equal to or more than the threshold amount for protected residents.

See the basic daily fee protected resident contribution rate in the Schedule of Fees and Charges for Pre 1 July 2014 Residents.

Income tested fee

Some residents will also pay an income tested fee. This fee is different for everyone because it depends on their income and the cost of their care. 

A resident pays this fee if their income is above the income threshold when Services Australia or DVA assesses them. The amount of income tested fee may change while the person is in your care.

You cannot charge this fee to a resident who:

• is in respite
• is an Australian former Prisoner of War
• has a dependent child
• was in permanent residential aged care between 30 September 1997 and 1 March 1998.

The fee is equal to a resident's income-tested amount or the cost of their care, whichever is lower. Services Australia calculates and advises the income-tested amount. The cost of care is the amount of adjusted basic subsidy and primary supplements you get for that resident.

Daily cap

The income tested fee has a daily cap. The cap is set at 135% of the single basic age pension.

Means not disclosed

If a resident chooses not to disclose their income information to Services Australia or DVA, they will have ‘means not disclosed’ status. 

You can ask these residents to pay their full cost of care (up to the daily cap), and an accommodation bond or accommodation charge.

Review of the income tested fee

Services Australia regularly reviews the income tested fee. If the resident’s cost of care or financial circumstances change, their income tested fee may also change.

Services Australia will send you and the resident a letter if there is a change to the fee. You might owe the resident a refund as a result.

Residents should update their details with Services Australia if they have a major change in income.

Accommodation costs

Residents who had assets above the minimum assets amount on the day they entered care may need to contribute to their accommodation. 

These residents pay an accommodation bond or accommodation charge.

Assets assessment

Services Australia and DVA assessed the assets of residents who entered care between 1 July 2005 and 30 June 2014. Providers did the assessments before 1 July 2005.

If a resident did not complete an assets assessment and had:

• low care needs or occupied an extra service place, they pay an accommodation bond
• high care needs, they pay the maximum accommodation charge.

Accommodation payment types are fixed for residents who entered care before 1 July 2014 and remain on these fee arrangements. This applies if a resident moves to a new service and remains on their existing fee arrangements.

Residents can request a new assets assessment when moving aged care homes. Services Australia will review the amount of accommodation bond or charge payable.

Accommodation bond

A resident who has paid an accommodation bond and moves to a new residential care service: 

• can pay a bond in the new service
• cannot pay an accommodation charge.

Read more about accommodation bonds.

Accommodation charge

A resident who is paying an accommodation charge and moves to a new residential care service:

• can pay a charge in the new service
• cannot pay an accommodation bond.

Residents do not pay an accommodation charge if they:

• were in permanent high-level care on 30 September 1997 – they may be eligible for the concessional resident supplement (formerly known as the charge-exempt resident supplement)
• occupy an extra service place.

Services Australia will advise you of the amount of accommodation charge you can ask a resident to pay. 

Read more about accommodation charges.

Extra service fee

If your aged care home has extra service status you can offer residents a bundle of extra services, and charge an extra service fee. Extra services are hotel-type services, such as:

• better-than-average accommodation
• higher-quality food 
• non-care services, like recreational and personal interest activities.

You may have extra service status for your whole service or individual rooms in the service. You can only charge an extra service fee to residents who occupy an extra service room.

The Independent Health and Aged Care Pricing Authority approves extra service fees. You must set out these fees in an extra services agreement. The maximum amount you can charge for a resident on pre 1 July 2014 fee arrangements is the sum of:

• the IHAPCA-approved fee for the extra service place
• the extra service subsidy reduction amount. 

If you have extra service status you can charge GST for any item included in the extra service package that is not GST-exempt

Additional service fees

If the resident agrees, you can charge additional service fees for services not outlined under Schedule 1 of the Quality of Care Principles 2014. This includes:

• services you are not otherwise required to provide under Schedule 1, such as alcohol options with dinner, hairdressing services, wi-fi and pay TV
• services substantially better than the standard that you must provide under Schedule 1.

What you can’t charge additional service fees for

You must ensure any fees you charge to residents are consistent with aged care legislation. 

Providers cannot charge additional service fees for:

• specified care and services outlined in the Schedule 1 of the Quality of Care Principles
• services or activities that are part of the normal operation of an aged care home
• services required as part of your provider responsibilities
• services already covered by the payment of an extra service fee or an accommodation payment.

You cannot charge fees for ‘asset replacement’ or ‘capital refurbishment’, including:

• maintenance inside and outside the aged care home
• any repairs or replacements needed 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 are part of the general operation of the aged care home
• services or activities that are required to deliver care to the resident
• employment of administration staff, whose job mainly involves the general running of the aged care home
• capital costs, asset management or replacement.

The Aged Care Quality and Safety Commission (ACQSC) may receive information about additional service offerings and additional service fees, including through its complaints process.

If you are not meeting your additional care and service responsibilities, the ACQSC may respond by:

• issuing directions to ensure you make improvements to address the concern
• taking necessary compliance and enforcement action.

Read more about managing additional service fees, including what to do if you have charged or are charging fees that are not permitted.

When fees can 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
• rates are indexed
• a resident’s cost of care increases.

Services Australia will tell you of these changes after each review of fees.

Residents in financial hardship can apply for help, or you can do so on their behalf. Financial hardship assistance can help to pay the basic daily fee, the income tested fee and accommodation payments.

When a resident moves to another service

If a resident spends more than 28 days outside of residential care (other than on approved leave), the post-1 July 2014 fee arrangements will automatically apply when they enter the new service.

If a resident enters a new service within 28 days, the fees from before 1 July 2014 will continue to apply unless they opt into the post-1 July 2014 arrangements.

To opt in to the post-1 July 2014 fee arrangements, a resident must:

• complete and sign the Continuing Care Recipient Opting into the New Arrangements Form
• submit the completed form to their new provider before they transfer to the new service.

If a continuing care recipient intends to move into your service, you must:

• give the person the New arrangements for aged care from 1 July 2014 publication to help them decide whether to opt in
• submit the Continuing Care Recipient Opting into the New Arrangements Form with the Aged Care Entry Record Form to Services Australia if applicable.

This is not a reviewable decision, so must be done correctly.

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