Fees for people who entered residential aged care before 1 July 2014

Current rates

Pre-1 July 2014 fee arrangements

The fees on this page only apply to permanent residents who entered care before 1 July 2014. 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.

Residents who entered care before 1 July 2014 and are transferring into your care will stay on their pre-1 July 2014 fee arrangements.

The fee rules are different for people who entered into a resident agreement after 1 July 2014. See Fees for People Entering Residential Aged Care from 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. The fee 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) pays the basic daily fee for former Prisoners of War and may pay the basic daily fee for Victoria Cross recipients.

Providers may receive the 2012 basic daily fee supplement for residents who did not get any financial support to meet the basic daily fee 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 a dependent child and must meet one of the following criteria:

• are not getting an income support payment
• 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 is protected from paying higher fees if they were in care on 19 September 2009, and on that day:

• were self-funded retirees or part pensioners
• their private income was equal to or more than the threshold amount for protected residents

Their basic daily fee is set at the protected resident contribution rate in the Schedule of Fees and Charges for Pre-1 July 2014 Residents.

Income tested fee

The income tested fee is in addition to the basic daily fee. The fee is different for everyone, because it’s based 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 assessed 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 Prisoners of War
• has a dependent child
• was in permanent residential aged care after 30 September 1997 and before 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.

If the resident did not do an income test, Services Australia will advise them to pay the maximum income tested fee.

Daily cap

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

See the Schedule of Fees and Charges for Pre-1 July 2014 Residents.

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 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 may owe the resident a refund as a result.

Residents should updates 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 can be asked to contribute to their accommodation. These residents pay an accommodation bond or accommodation charge.

Assets assessment

Services Australia and DVA conducted assets assessments for residents who entered care after 1 July 2005. Providers conducted the assessments before 1 July 2005.

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

• low care needs, they pay an accommodation bond
• high care needs, they pay the maximum accommodation charge

From 1 October 2022, accommodation payment types became fixed for residents who entered care before 1 July 2014 and remain on the pre-1 July 2014 fee arrangements. If a resident moves to a new service on or after 1 October 2022 and remains under the pre-1 July 2014 fee arrangements, they can only be asked to pay the same type of accommodation payment as they were paying in their prior service (bond or charge).

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

Accommodation bond

Before 1 October 2022, residents may have been asked to pay an accommodation bond if they had assets above the minimum assets amount on the day they entered residential aged care and either:

• had low-level care needs
• occupied an extra services place

The resident and provider would have agreed on the bond amount when the resident entered care. It could not be above the difference between the minimum assets amount and the resident’s assets assessment amount.

A resident who has paid an accommodation bond and moves to a new residential care service on or after 1 October 2022 can only be asked to pay a bond in the new service. They cannot be asked to pay an accommodation charge.

Read more about managing accommodation bonds.

Accommodation charge

Before 1 October 2022, residents paid an accommodation charge if, on the day they entered residential aged care, they:

• had above the minimum assets amount
• had high-level care needs

The aged care provider set the accommodation charge amount for residents who entered care before 20 March 2008.

The Government advises residents who entered care from 20 March 2008 of the amount they can be asked to pay.

Residents who entered care before 1 July 2004 paid an accommodation charge for 5 years only. The 5-year limitation does not apply to residents who entered care from 1 July 2004.

A resident who is paying an accommodation charge and moves to a new residential care service on or after 1 October 2022 can only be asked to pay a charge in the new service. They cannot be asked to 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

Read more about managing 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 and 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. Providers must set out these fees in an extra services agreement. The maximum amount a provider can charge is the fee for the extra service place plus the extra service subsidy reduction amount.

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 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 the Schedule such as alcohol options with dinner, hairdressing services, Wi-Fi and pay TV
• services substantially better than the standard that you must provide under the Schedule.

What you cannot charge additional service fees for

Providers cannot charge additional service fees for:

• specified care and services outlined in the Schedule
• services required as part of your provider responsibilities
• services already covered by the paying of an extra service fee or an accommodation payment.

You also cannot charge fees for ‘asset replacement’ or ‘capital refurbishment’. Including, but not limited to:

• 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 forming part of the general operation of the aged care home, or required in order to deliver residential care to the individual
• employment of administration staff where activities mainly involve the general running of the aged care home
• capital costs, asset management or replacement.

The Aged Care Quality and Safety Commission (the Commission) may receive information about provider practice regarding additional service offerings and additional service fees, including through the Commission’s complaints process.

Where a provider is not meeting their responsibilities in relation to additional care and services, the Commission may respond in a range of ways, including:

• issuing directions to ensure a provider makes improvements to address the concern
• taking one or more compliance and enforcement action where necessary.

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

Difference between extra service fees and additional service fees

You need extra service status and approval from IHACPA to charge extra service fees. However, approved providers do not need to seek approval to offer and charge for additional services.

Extra services and additional services are not like for like. You cannot offer some items that may be allowed under an extra service fee arrangement as an additional service fee. When setting additional service fees, you should refer to the Schedule for items you must supply to the resident at no additional charge.

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 cost of care increases

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 income tested fee and accommodation payments.

Agreeing on and recording fees and charges

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.

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.

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