Making the transition to an aged care home is a big step, requiring big decisions – not the least of which are financial. It’s important you have a good understanding of the fees and costs associated with aged care, so we have put together this guide to the costs involved, how the government can help, and the financial options available to you.

Everyone’s circumstances are a little bit different, so how the money works will vary depending on your particular situation.

Costs of living in an aged care facility

The costs of living in residential aged care vary from place to place, depending on the style of accommodation and amenities provided. At BlueCare, we list the prices and rates for each of our aged care homes and facilities. The costs may seem a little intimidating at first, but there are a few different ways you can pay and you may qualify for Australian Government assistance, depending on your assets and income.

Generally, the cost is divided into three fees:

  • Daily Care Fee – for meals, laundry etc

    All residents must pay a standard Daily Care Fee to cover meals, cleaning, laundry, heating, and cooling. This fee is equivalent to 85 percent of the standard full aged pension ($61.96 a day at present). Like the aged pension, it is indexed with increases every March and September.

    Good to know: The Daily Care Fee can be charged up to seven days before you move into residential aged care and must still be paid if you are on social leave or hospital leave from your aged care home.

  • Accommodation Fee – for accommodation

    Depending on your income and assets, you may also be required to pay for your accommodation in an aged care home. This comes in the form of a refundable lump sum, non-refundable daily payments, or as a mix of both (hybrid). Remember, we list the accommodation price for all BlueCare beds throughout Queensland.

    There are a few thresholds that apply to government assistance here.

    • If your income is less than $32,819.80 and your assets are below $59,500 you do not have to pay the Accommodation Fee at all.
    • If your income is more than $82,425.72 a year and your assets more than $201,231, you will need to pay the full amount.
    • If your assets or income sit between those two thresholds, you may be entitled to some government subsidies. Visit My Aged Care to find out more.

    Lump sum

    If you choose to pay the full lump sum when you leave Residential Aged Care your lump sum (less any deductions you agree with the aged care home) is refunded. The Australian Government guarantees this refund.

    Good to know: If family members want to contribute to the full bed price (lump sum), it is recommended they seek legal advice because the refund is paid to the estate of the former resident.

    Daily payment

    If you do not pay a lump sum for the refundable Accommodation Fee, you can instead pay a non-refundable daily Accommodation Fee. It is non-refundable because it is charged at a rate intended to reflect the interest earnings on the price of the room – currently set at 8.38%.

    For example, if a room cost $400,000, your daily fee would be charged at 8.38% of the $400,000 or $91.84 a day.

    Good to know: The rate charged can change four times a year.

    Hybrid fee

    There is also the option to pay part of the lump sum and then make a smaller daily payment. This would be calculated at 8.38% on the remainder of the lump sum amount.

    Good to know: The rate charged can change four times a year.

  • Means-Tested Fee – for healthcare needs

    You may be required to help pay the costs of your individual healthcare needs, depending on your financial situation. The amount you are expected to pay increases in accordance with your wealth. But there is a safety net in place, with a yearly cap and a lifetime cap on the amount you have to pay.

    The annual cap is currently $33,309.29 and the lifetime cap is $79,942.44.

    Good to know: If you have been contributing to a Home Care Package for home care services prior to entering residential care, the money you have paid will count towards your annual and lifetime safety net.

Government assistance for residential aged care

The key to receiving government assistance is to complete a Combined Asset and Income Assessment. This allows the Department of Human Services or Department of Veteran Affairs to decide if you are eligible for Government support.

Good to know: Even if you are over the current threshold for accommodation support, it is important to complete the assessment, to avoid being charged the default means-tested fee for those who do not declare their assets (roughly $250 a day).

To get an estimate of the fees you may have to pay when entering into an aged care home, try the My Aged Care Residential Fee Estimator.

You may also like to speak with a financial adviser who specialises in aged care.

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