Damon Mcknight
Paying for aged care in Australia can be a complex process, with costs varying depending on the type of care required and an individual's financial situation. The Australian Government subsidises aged care homes and home care packages, with the amount of subsidy depending on individual needs. The government also provides financial hardship assistance for those who cannot afford the costs. Services Australia assesses individuals' income and assets to determine the fees they will pay, with regular reviews to ensure fairness. It is recommended that individuals seek financial advice and utilise the My Aged Care website to estimate their costs.
| Characteristics | Values |
|---|---|
| Who pays for aged care in Australia? | The individual pays for aged care in Australia, but the government subsidises aged care homes and home care packages. |
| How much does the government contribute? | The subsidy amount depends on the ongoing care needs of the individual and their means assessment. The government contributes more if the individual has less capacity to pay. |
| How much does the individual pay? | The individual pays a basic daily fee, which is set at 85% of the single person rate of the basic age pension. The maximum basic daily fee is $63.82 per day or $23,294.30 per year. The individual may also pay a means-tested care fee, which is different for everyone and depends on their income and assets. |
| How are the fees determined? | The fees are determined through a means assessment, which takes into account the individual's income and assets. |
| What if the individual cannot afford the fees? | If the individual is unable to afford the fees, they can apply for financial hardship assistance from the government. They may also receive free financial information and guidance from Services Australia. |
| How can the individual estimate their costs? | The individual can use the My Aged Care website to estimate their costs. They can also apply for an aged care calculation of their costs. |
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What You'll Learn
Government subsidies and contributions
The Australian Government subsidises aged care homes across Australia to provide affordable, accessible care. The subsidy amount depends on your needs, and the government contributes more if your means assessment shows you have less capacity to pay. The amount you pay and the amount the government pays also depend on your Home Care Package level, your income assessment, and what you agree to with your provider.
The basic daily fee is set at 85% of the single person rate of the basic age pension. The government updates it on 20 March and 20 September each year in line with increases to the age pension. Based on current rates, the maximum basic daily fee is $63.82 per day, or $23,294.30 per year. This fee is an extra contribution that some people pay, as determined through a means assessment. It is an ongoing fee towards the cost of your personal and clinical care. The means-tested care fee is different for everyone, and not everyone will have to pay it. If you do need to pay it, Services Australia will let you and your provider know the amount once you enter care. Your means-tested care fee will be between $0 and $407.33 per day.
If you are eligible for government assistance (low means), the government will pay some or all of your accommodation costs to your provider. You will be asked to pay an accommodation contribution if the government does not pay the full amount. The amount you contribute is worked out by Services Australia based on your income and assets. It does not depend on your agreed room price. You (or your family) cannot be asked to pay or choose to pay the agreed room price. Your status as low means or not low means is set based on your income and assets at your date of entry to an aged care home. It does not change while you remain in the same home, regardless of how your financial circumstances may change after entry.
If you’re worried that you may not be able to afford your home care, residential respite care or permanent residential care costs, you can ask to be considered for financial hardship assistance. If you are eligible, the Australian Government will pay some or all of your aged care costs.
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Basic daily fees
The basic daily fee is a standard resident contribution that covers the costs of daily living, such as meals, cleaning, laundry, heating, and cooling. It is set at 85% of the single person rate of the basic age pension, which is currently a maximum of $63.82 per day or $23,294.30 per year. This fee is subject to change and is updated on the 20th of March and September each year in line with increases to the age pension. The Department of Veterans' Affairs may pay the basic daily fee for former Prisoners of War (POWs) and Victoria Cross (VC) recipients.
The basic daily fee is an extra contribution that some individuals may have to pay, as determined by a means assessment. It is an ongoing fee towards the cost of personal and clinical care. This means-tested care fee is different for everyone and is based on an individual's income and assets. The amount can range from $0 to $407.33 per day. Services Australia will inform the resident of the amount they need to pay through a fee advice letter. Additionally, the Australian Government may provide financial hardship assistance to those who cannot afford the basic daily fee. If eligible, the government will pay some or all of the aged care costs.
The basic daily fee is separate from accommodation costs. Depending on an individual's financial situation, the government may contribute partly or fully to these costs. Residents with low means status may receive accommodation contributions from the government if they cannot pay the agreed-upon room price. On the other hand, residents without low means status will be expected to pay the agreed room price. It is important to note that the agreed price should not exceed the published maximum accommodation payment amount for that room, and it is possible to negotiate a lower amount.
The basic daily fee is a standard charge for all residents, regardless of their care arrangement. Whether an individual receives care at home, in the community, or in an aged care home, they may be required to pay this daily fee. It is important to consider that the level of care and subsidy received will depend on individual needs and circumstances. The Australian Government provides subsidies for aged care, and the amount of subsidy an individual receives will depend on their specific situation.
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$12.97
Means-tested care fees
The Australian Government subsidises aged care homes to make it more accessible and affordable for Australians. The subsidy amount depends on your needs and your capacity to pay.
The means-tested care fee is a contribution that some residents pay towards their cost of care. It is paid in addition to the basic daily fee. This fee differs for everyone and is calculated based on a person's income and assets. Services Australia will advise you of the amount payable in a fee advice letter.
The means-tested care fee is regularly reviewed by Services Australia to ensure each resident is paying the right fee for their circumstances. A resident's fee may change when their financial situation changes. Services Australia will send a letter if there is a change to the fee.
There are annual and lifetime caps that limit how much a person can pay in means-tested care fees. Once a resident reaches the annual cap, their means-tested care fee is reduced to zero. They will start paying the fee again on the next anniversary of the date they first entered aged care. Once a resident reaches the lifetime cap, the government pays the full cost of their care, and the resident will pay no more means-tested care fees.
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Accommodation costs
The Australian Government subsidises aged care homes across Australia to provide affordable, accessible care. The subsidy amount depends on your needs and your income and assets.
If you are eligible for government assistance (low means), the government will pay some or all of your accommodation costs to your provider. You will be asked to pay an accommodation contribution if the government does not pay the full amount. The amount you contribute is worked out by Services Australia based on your income and assets. It does not depend on your agreed room price.
If you are not eligible for government assistance with your accommodation costs (not low means), you will pay the room price you agreed to with your aged care home as an accommodation payment.
To work out how much you'll pay towards a government-funded Home Care Package or a place in an aged care home, Services Australia will use your income and asset information. You can estimate your costs on the My Aged Care website, or apply for an aged care calculation of your cost of care anytime. You can also use the My Aged Care fee estimator or the residential aged care fee scenarios to decide an appropriate interim means-tested care fee.
The basic daily fee is set at 85% of the single person rate of the basic age pension. The government updates it on 20 March and 20 September each year in line with increases to the age pension. Based on current rates, the maximum basic daily fee is $63.82 per day, or $23,294.30 per year. This fee is an extra contribution that some people pay, as determined through a means assessment.
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Financial hardship assistance
If you are struggling to pay for aged care in Australia, you may be eligible for financial hardship assistance from the Australian Government. This is available to those who cannot afford their aged care costs due to reasons beyond their control. Each case is assessed individually, and if eligible, the government will pay some or all of your fees and charges.
To apply for financial hardship assistance, you must complete and lodge the Aged Care Claim for financial hardship assistance form (SA462) with Services Australia. This form asks for details of your assets and expenses. You can download the form from the Services Australia website, and it must be sent to the address provided on the form, along with any supporting documents. Services Australia will assess your application within 28 days, and they may ask for more information to support your application. You will then find out if you are eligible within 28 days of them receiving this additional information.
It is beneficial to seek financial advice when considering your application. You can do some research to see what options work best for you, and you can also receive free financial information and education through Services Australia's Aged Care Specialist Officers (ACSOs) and Financial Information Service (FIS). They can also provide information about the Home Equity Access Scheme. You may also want to talk to a financial adviser about your finances.
It is important to note that if you are receiving a Home Care Package, your care must have started on or after 1 July 2014 for you to be eligible for financial hardship assistance. You should also ensure that your financial details are up to date before submitting your application, as this will impact the outcome of your claim.
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Frequently asked questions
The subsidy amount depends on your needs and package level. The government will pay some or all of your aged care costs if you are eligible for financial hardship assistance.
You can use the My Aged Care fee estimator to get an idea of what you might need to contribute. Your exact fees can only be determined once you have had an income assessment.
The basic daily fee is set at 85% of the single person rate of the basic age pension. Based on current rates, the maximum basic daily fee is $63.82 per day, or $23,294.30 per year.
A contribution that some people pay towards the cost of their care, determined by a means assessment. The means-tested care fee is different for everyone and not everyone will have to pay it.
An amount that some people pay to contribute towards or cover the full costs of their room, depending on their means assessment. If you are eligible for government assistance, the government will pay some or all of your accommodation costs to your provider.
