Aged care – what is the real cost?

When it comes to making the difficult decision to place loved ones into aged care, considerations such as location, reputation and proximity to loved ones, are simple compared with navigating the options to pay for such a move.

Residential Aged Care is regulated by the Aged Care Act of 1997 and there are three categories of fees charged –basic care fees, accommodation fees and additional service fees. Seeking financial advice before choosing an aged care facility will help ensure the payment plan you choose is best suited to your lifestyle, needs and budget.

Basic care fees

These fees include a basic daily fee which is set by the government and can be up to 95% of the full pension. The only people exempt from this fee are those experiencing financial hardship(determined by Centrelink). The government makes a contribution to this fee based on a means test of assets. To help ensure that care is affordable for everyone, the Government regulates a maximum amount for daily fees.  

Accommodation Fees

These fees differ in every facility and depend on the room type chosen. Again, the government regulates the upper limit of these accommodation fees and each facility must apply to exceed these limits. There are four ways to pay these accommodation fees – by a further daily fee, by refundable accommodation deposit (RAD), a combination of both a daily fee and a RAD or a draw down payment. Each will be clarified by the aged care provider.

Thirdly, additional services fees. These are hotel style extras offered by some facilities such as newspapers or television subscriptions as upgrade bundles. All of the above fees must be recorded in the resident agreement.

The transition into aged care can be planned but when unexpected circumstances force a decision then having the support of a caring legal team will assist you in the process and ensure you have the clarity you need to choose a residential care facility that best suits your needs or the needs of your loved one.  Seeking legal advice will ensure that you understand all the contractual obligations associated with such a major lifestyle change.

If you would like to discuss your circumstances with our Eldercare Legal Team please call us on 9870 9870 or email office@hutchinsonlegal.com.au

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