When it comes to Aged Care services, one of the biggest considerations for older Australians and their families is the cost associated with care. Navigating the financial landscape of Aged Care can be complex. Therefore, it’s important to understand the Schedule of Fees and Charges for Residential and Home Care released by the Australian Government on 20 September 2023.
This comprehensive guide will shed light on the different components of these schedules, helping you to make informed decisions about Aged Care for yourself or your loved ones.
Australia’s Aged Care system is designed to offer subsidised support and services to senior Australians who may require assistance with daily living activities, health or personal care, and accommodation. However, while subsidised, these services do come with associated costs.
This includes services and accommodation provided in Aged Care Homes. It caters to older Australians who can no longer live safely and independently in their own home and require 24/7 care due to health or mobility issues.
There are two programs of Home Care support available: The Commonwealth Home Support Program and the Home Care Package Program. Home Care allows older Australians to receive support while continuing to live in their own homes. It provides various services like personal care, cleaning and gardening, and domestic assistance. Home Care services are tailored to the needs of each individual.
1. Basic Daily Fee
The Basic Daily Fee is a standard daily fee that everyone in Residential Aged Care must pay. It covers general day to day living costs such as meals, laundry, and cleaning services. The government sets this fee at 85% of the full Age Pension, which means that it is subject to adjustments in line with increases in the Age Pension. These adjustments occur every March and September.
The current Basic Daily Fee for Residential Aged Care is $60.86 (September 2023).
|March 2023||September 2023|
|Basic Daily Care Fee||$58.98||$60.86|
2. Means Tested Care fee
The Means Tested Care fee is an income and asset-tested fee that some individuals pay depending on their financial situation. The government takes into account an individual’s income, assets, and other factors to determine this fee. Those with higher income or assets are required to pay a higher means tested care fee.
In Residential Aged Care, you may have to pay an accommodation payment or contribution for your room. There are several ways in which you can pay for the cost of your room:
- Refundable Accommodation Deposit (RAD): an upfront, lump sum payment (likened to paying for your home outright). This amount is then returned to you or your estate once you are no longer living in the Home.
- Daily Accommodation Payment (DAP): a daily payment that accrues and does not need to be paid as a lump sum (likened to paying rent). Daily Accommodation Payments are not refunded once you are no longer living in the Home.
- Combination Payment: a combination of RAD and DAP, which allows you to pay part of the accommodation costs as a lump sum and the rest as a daily payment. The RAD portion is refunded once you leave the Home and the DAP is not.
The exact amount for the accommodation payment is determined by the Aged Care Home itself and is subject to government regulations. It’s essential to discuss accommodation payment options and costs with each Home you are considering. Just like buying or renting a property, the location, size and amenities available will determine how much you pay.
Some Aged Care Homes offer extra service options that provide additional amenities and services beyond the standard level of care, such as Foxtel or other pay TV. These extra services come with an associated fee, and the costs can vary significantly between Homes. It’s important to enquire about these fees.
Learn more about Aged Care Home fees.
In Home Care, older Australians receive government-subsidised care packages tailored to their specific needs. The fees associated with Home Care Packages may include:
1. Basic Daily Fee
Similar to the Basic Daily Fee in Residential Aged Care, it covers daily living costs. This fee is set by the government, but it isn’t compulsory like the Income-Tested Fee. Many providers choose not to charge this fee (and none of the Home Care Providers CareAbout works with charge the Basic Daily Fee). The maximum Basic Daily Fee is different depending on the level of Home Care Package you have:
|Level of Home Care Package||March 2023||September 2023|
2. Income-Tested Fee:
Based on an individual’s income, this fee is designed to ensure that those with higher incomes contribute more to the cost of their care. If your income is below the threshold, you won’t have to pay the income tested fee. Full pensioners are exempt from paying this fee. Find out more about the income-tested fee here.
Package management is the range of administrative and organisational activities your Home Care provider does to ensure the quality, smooth delivery and management of a home care package such as:
- establishing and managing home care budgets
- coordinating and scheduling services and workers
- preparing invoices and monthly statements
- complying with compliance, regulatory and assurance activities.
From 1 January 2023, your provider must not charge more than 15% of the package level for package management.
Care management is a service Home Care providers must deliver to all care recipients, even if you choose to self-manage. To provide care management, your provider must:
- regularly assess your needs, goals and preferences
- review your home care agreement and care plan
- ensure your care and services align with other supports
- partner with you and your family or carers about your care
- ensure your care and services are culturally safe
- identify and address risks to your safety, health and well-being.
From 1 January 2023, your provider must not charge more than 20% of the package level for care management.
Learn more about Home Care fees.
The Australian government has implemented fee caps and thresholds to ensure that individuals are not overwhelmingly burdened by the costs of Aged Care.
Both the means tested and income tested care fees have annual and lifetime caps. Once an individual reaches the annual cap, they won’t pay these fees until the next anniversary of the date they first began receiving aged care. If an individual reaches the lifetime cap, they won’t be required to pay any further means or income tested care fees.
|Annual Cap||Lifetime Cap|
|Means tested fee||$32,718.57||$78,524.69|
|Income tested fee |
First cap (income does not exceed threshold)
Second cap (income exceeds threshold)
| $6,543.66 |
The government sets income and asset thresholds to ensure that older Australians are only contributing toward the cost of their care if they can afford to do so.
The income threshold is $62,332.40 (September 2023). If your annual income is less than this, you will be subject to the first income tested fee cap and if it exceeds this amount, you are subject to the second income fee cap. If your annual income is less than $32,331 (September 2023), you will not be required to pay an income tested fee for your Home Care.
There are two thresholds for the means tested care fee. The first is $197,735.20 and the second is $476,205.60 (September 2023). if your total assets are less than $58,500 (September 2023) you will not need to pay accommodation fees towards Residential Aged Care, but you will still be required to pay the Basic Daily Fee and any extra fees if they are applicable.
CareAbout is here to help!
The Schedule of Fees and Charges for Residential and Home Care is a vital resource for older Australians and their families trying to navigate types of Aged Care in Australia. However, there is a lot of information to get your head around and when you’re trying to make the right decision for yourself or a loved one, the last thing you want to be doing is sifting through government documentation.
Let CareAbout help. Our expert Care Advisers understand the costs and fees associated with Aged Care and are looking forward to helping you make a choice that’s right for your family. Call us today on 1300 536 707 and get free, no-obligation access to our team of Aged Care Specialists.