As soon as you start researching aged care home options one thing becomes very clear: not all Aged Care Homes are equal. Not only do they offer different levels of accommodation and service, the fees can vary dramatically. This article will help you understand more about the costs and fees involved in entering an aged care home but if you still have questions or want to discuss your personal circumstances, contact CareAbout.
Aged care home fees
Fees can vary greatly in amount from one provider to another. There are three main types of fees:
Daily care fee: The daily care fee covers living costs such as meals, power and laundry services. Everyone must pay this fee. The daily care fee is set by the federal government and is set at 85% of the aged care pension. The fee increases twice a year in line with the aged care pension. From 20 March 2018 to 19 September 2018, the daily care fee is $50.16 per day or $702.24 per fortnight.
Means-tested fee: You may be required to pay a means-tested fee of up to $245 per day dependent on your income, assets and property. Annual and lifetime caps apply. The Department of Human Services works out the amount of the means-tested care fee based on your financial information. My Aged Care has a Residential Care Fee Estimator that will give you some indication as to what this fee may be for you.
Additional fees: Some facilities offer the option to pay for a more premium service. Additional Services may include:
- higher quality meals, greater meal choices,
- higher standard of accommodation fixtures and fittings,
- newspaper delivery, and so on.
*Note: Some homes may also charge one-off entry or exit fees or other daily fees, so it is important that you ask about all additional fees at the outset. You don’t want any unpleasant surprises.
RAD and DAP
As you research aged care homes, you will hear the terms Refundable Accommodation Deposit (RAD) and Daily Accommodation Payment (DAP). It is very important that you understand what they are and what options you have in paying them.
- The RAD is a bond that is based on the room type and is a lump sum payment payable when you enter the home. The balance of the deposit is refunded when you leave less any amounts you have agreed to have deducted.
- The DAP is a daily payment contributing to the cost of your accommodation and is paid periodically i.e. fortnightly or monthly. It is calculated by multiplying the RAD by the current government interest rate and then divided by the number of days in a year. This is not a refundable payment, unless you have paid in advance and leave the aged care home.
There are three options available when it comes to the RAD and DAP.
- Option 1: involves paying 100% of the RAD and no DAP. Remember, the balance of the RAD is refunded when you leave less any amounts you have agreed to have deducted.
- Option 2: involves paying 100% DAP but no RAD. That means there is no up-front payment.
- Option 3: is a combined payment of RAD and DAP as negotiated with the care facility. Some of the RAD is paid as a lump sum, the rest is paid as a DAP.
Basic questions to ask
If you talk directly to an Aged Care Home provider, there are many questions you will need to ask them. Many will relate to the services they provide but don’t forget to ask finance-related questions such as:
- Are there additional fees, and if so what are they for and how much are they?
- Are there any one-off entry or exit fees?
- Do you offer options around the RAD and DAP?
- What happens if I have temporary financial difficulties?
- Are your rooms different and if so do they range in price?
If you find a provider is not answering the questions as directly as you believe they should, be wary of signing an agreement. Or contact CareAbout and discuss your concerns with them. They have experienced experts who can advise further.
Navigating the aged care system in Australia can be daunting, especially when you dealing with financial issues. But it’s not something you have to do alone. Get in touch with CareAbout and let them guide you through the process.