If you or a loved one is thinking about moving into an aged care home, you might be feeling anxious about the costs. As these facilities provide comprehensive, round-the-clock care, the associated fees tend to be high.

While most older Australians sell their homes to fund the move, this option isn’t available to everyone. Thankfully, Government-funded supplements can help people who lack the financial means.

This post will examine the costs and explain the available financial aid for aged care home residents.

Understanding the Costs of Moving Into an Aged Care Home

How much does an aged care home cost in Australia?

It depends on your financial situation—specifically, your income and assets.

The Australian Government expects aged care home residents to contribute to the costs of their ongoing care, but only if they can afford it. The amount you’ll be expected to pay depends on your financial means.

To determine this figure, most (but not all) prospective age care residents will need to undertake an income and assets assessment. This evaluation looks at your income (if any) and your assets, such as property, shares, investments, and vehicles. The Government then uses this information to determine what means-tested fees you should pay.

The easiest and most accurate way to work out your fees is to use the My Aged Care Fee Estimator.

Generally, an aged care provider will ask you to pay the following:

  • A basic daily fee: covers meals, cleaning, facility maintenance, and laundry. It’s means-tested and currently capped at a maximum of $54.69 per day.

  • A means-tested care fee: covers personal and clinical care, such as check-ups, bathing, and assistance with dressing or going to the bathroom. This variable fee depends on your requirements; it may be between $0 and $259.26 per day.

  • Accommodation costs: vary depending on the facility and the size or location of your room. The Government will foot the bill if your income is below $28,974.40 and your assets are worth less than $52,500. Otherwise, you will be required to pay some or all of the accommodation costs.

  • Additional services: covers things like hairdressing, pay-TV, and toiletries. The aged care provider sets these fees, which are not subsidised by the Government.

  • Extra services: covers luxury items like fancy furniture, specialised menus, and high-quality linen. Like additional services, these depend on the provider and are not subsidised.

  • Note: All rates are accurate as of May 2022 and indexed twice per year.

The Types of Financial Aid Available for Aged Care Home Residents

The Government offers two types of financial assistance for older Australians who can’t afford to reside in an aged care home: Financial Hardship Assistance and Residential Aged Care Supplements.

Financial Hardship Assistance can help cover the cost of the basic daily fee, the means-tested care fee, and/or the accommodation costs. It does not cover any extra or additional services.

The Government assesses eligibility on a case-by-case basis. However, to be considered, you must have:

  • Completed and lodged the Aged Care Calculation form (SA486)
  • Assets valued at less than $38,516.40, not including unrealisable assets (those you can’t sell or borrow against)
  • Not gifted $10,000 or more in the last year or $30,000 or more in the last 5 years

Residential Aged Care Supplements help cover the costs of specific needs, such as oxygen administration and feeding support. These supplements can also help cover accommodation costs, but only for applicants who lack the financial means.

The Government sets the supplement rates, which it indexes on 01 July each year.

Obtaining Financial Advice

For the everyday Australian, assessing your financial situation and determining what assistance you may be eligible for is a daunting task.

To help make the process easier, Services Australia offers a free Financial Information Service (FIS). In addition to a wealth of written information, FIS hosts videos and webinars covering various financial themes.

FIS is general in nature, so ensure you visit the Aged Care section for the most relevant information.

Many older Australians choose to hire a financial planner to help manage their funds in their later years. A licensed professional can offer expert assistance across numerous aged care topics, including what aid you may be eligible for.

How CareAbout Can Help

While CareAbout can’t help pay for your aged care facility, we can do the next best thing: find a good deal on your behalf.

We work with a vast network of aged care home providers around Australia, from premium, high-end options to budget-oriented facilities. Get in touch with the team today and let us help you find a provider that aligns with your financial means.