Depending on your personal financial situation and your choice of aged care home, residential aged care can range from very expensive through to heavily subsidised. For your protection, there are annual and lifetime limits (known as caps) on the amount you pay (this doesn’t apply if you’re paying the full cost of care yourself).
Good to know
If you’ve already paid fees for home-based care, that amount is included in your lifetime cap.
Fees and charges
You will need to pay aged care home accommodation costs (these used to be called ‘bonds’). Here’s where it gets sticky. Depending on your circumstances, you can choose to pay by:
- RAD: Refundable Accommodation Deposit; a government-guaranteed, one-off lump-sum payment that is largely returned when you leave (similar to purchasing your place); or
- DAP: Daily Accommodation Payment, for daily living costs such as food and lodging (similar to rent); or
- A combination of RAD and DAP:
Good to know
If you’re attracted to a certain aged care home because of location or special features, or you don’t qualify for subsidies, you can pay the full cost of your care. There is no means test or Aged Care Assessment required, as your fees aren’t subsidised by the government.
We strongly recommend that you speak with a financial advisor before committing to a residential aged care home, as this can all be pretty complicated.
And remember that although you can’t be charged more than the advertised amount, you can try to negotiate and pay less. It’s worth a shot!
Low-means residents
Every accredited aged care home must make a certain number of beds available to people who are assessed as being of “low means” (these have been known in the past as “supported”, “concessional” and “assisted” residents). The ratio of beds differs depending on the region, and range between 16% and 40%.
Once you have completed your Income and Assets Assessment through Services Australia, you will be told if you qualify as a low-means resident. If you do, the Commonwealth government will pay a proportion of your fees. (Also, because this is the government, if you get some government support they change the names to RAC and DAC. Don’t even ask…)
Government subsidies
Subsidised care is only available to people who can’t afford to fund their own care. You need to pay for your own care if you can afford to.
To access subsidies, you’ll need to have an Aged Care Assessment and also submit an Income and Assets Assessment form through Services Australia.
Find out more about assessments and subsidies
