For peace of mind, it’s critical that you understand aged care costs - particularly the costs of residential aged care as well as any fees and charges you may incur along the way. It’s also important to understand that the overall amount you pay for both care and accommodation depends on your individual financial situation.

The Department of Human Services (DHS) is the body that determines your financial situation. To do this, DHS conducts a Combined Income and Assets Assessment, which is a form that you need to complete and submit to the government.

Since DHS can sometimes take a long time to send you the outcome of your income and assets assessment (14-120 days), we recommend using the government’s Fee Estimator to help you estimate the likely cost of aged care. The Fee Estimator can be found on our website here opalhealthcare.com.au or at the My Aged Care website myagedcare.gov.au. It’s important to remember that the accuracy of the Fee Estimator depends on the accuracy of the information you enter, so it’s important to be as precise as possible.

We also encourage any person considering residential aged care to seek independent financial advice for aged care costs. This will help you access any government assistance to which you are entitled and advise you on the likely costs of your care. If you need help finding an independent advisor, please speak to our team at your local Opal HealthCare Community or you can contact DHS for a referral.

How are my assets and my income assessed?

The Combined Income and Assets Assessment form (SA457) is an extensive questionnaire with over 140 questions about what you and your partner/spouse own and earn. It’s important to understand that you are considered to own half your assets with your partner/spouse regardless of who holds the title to the assets. As part of your assessment, you will be asked to provide details of all assets owned by both of you.

The family home is excluded from the asset assessment if:

• You have a spouse, partner or dependent child still living in the family home at the time of the assessment or at the time you enter into care (whichever date is earlier).
• A close family member has lived in the family home for at least 5 years and is eligible for an income support payment (such as a government pension or allowance).
• A carer has lived in the family home for at least 2 years and is eligible for an income support payment (such as a government pension or allowance).
• For more information on the assessment process, call DHS on 1800 227 475.

What are the fees and charges included in residential aged care?

Accommodation Charge
(the cost of your room)

Set by individual Care Communities and varies between them.

The price of a room is determined by the Care Community and will depend on the standard of the Care Communities and the type of rooms within it. For example, a private room with an ensuite will be more expensive than a companion room with a shared bathroom. Any room price of over $550,000 is approved by the Aged Care Pricing Commissioner. The amount that a resident can be asked to pay for accommodation is based on their Combined Income and Assets Assessment.

Once your Combined Income and Assets Assessment is complete, DHS will advise you what fees and charges a residential aged care provider can ask you to pay.

Your assessment will place you in one of the following categories:

• Supported: the government will pay for your accommodation.
• Partially Supported: the government will contribute to some of your accommodation costs and you will be asked to pay the balance.
• Financial or self-funded: you will be required to pay your full accommodation costs.

If you are required to pay for your accommodation, you can pay for your accommodation in three ways:

• Refundable Accommodation Deposit (RAD): a lump sum amount that is completely refundable to you when you leave the home for any reason. Those who are partially supported by the government have the option to pay a refundable accommodation contribution (RAC). The refundable amount is 100% government guaranteed.
• Daily Accommodation Payment (DAP): a rental style equivalent, which is a daily interest payment on the full room price. The maximum permissible interest rate is set by the government. Those who are partially supported by the government will be asked to pay a daily accommodation contribution (DAC). Since this is a monthly interest-only payment, it is not refundable in any part.
• Combination of both (RAD/DAP) or (RAC/DAC): a combination of the two types of payment above whereby you can pay a partial lump sum amount and the remainder as a daily accommodation interest payment. Only the partial lump sum payment is refundable when you leave the home.

You have 28 days from the day you move into a home to decide which payment method best suits your financial situation. The rental style (DAP) must be paid until you decide on your preferred method of payment. More information about payments for accommodation is available on the My Aged Care website.

Basic Daily Care Fee 
(meals, laundry, cleaning, other day-to-day costs)

Set by the Australian Government and is the same across every Care Community in Australia.

The Basic Daily Care Fee covers your day-to-day living costs in residential aged care such as meals, cleaning, and laundry, heating and cooling.

It is the same for every resident in every Care Community across Australia regardless of your financial situation.

The Basic Daily Care Fee is set by the Federal Government and is calculated as 85% of the single person rate of the basic age pension. It is indexed with the age pension (it increases when the aged pension increases) and is adjusted every March and September.

Please check myagedcare.gov.au/ aged-care-home-costs-and-fees for the most current fee.

Means-Tested Care Fee
(to supplement the cost of your overall care)

Set by the Australian Government based on an assessment of your personal financial situation.

If you are required to pay a Means-Tested Care Fee, this will be clearly stated on the determination letter you receive from the Department of Human Services (DHS) after completing your Combined Income and Assets Assessment. This fee applies to residents who are assessed to have sufficient means to contribute to their overall residential aged care costs, including nursing and personal care.

The MTF is capped at a maximum amount per year and also has a lifetime limit. The current maximum amount that can be charged is available on the My Aged Care website.

Please keep in mind that you may only find out that you are eligible to pay an MTF after you have already moved into care. To avoid any unexpected fees, we recommend that you seek independent financial advice before you move into care and/or use the government’s My Aged Care Fee Estimator, which can be found at myagedcare.gov.au or on our Opal website at opalhealthcare.com.au.

The accuracy of the estimated MTF generated by the Fee Estimator depends on the accuracy of the information you enter.

Additional Services Fee or Extra Services Fee
(higher-end services and accommodation)

Set by individual Care Communities and varies from between them.  Some have Additional Services or Extra Services which are are optional and in others, residents are required to purchase these services as a condition of entry.

• Additional Services: Many Care Communities offer Additional Services, which enhance daily living and social experiences such as an extended variety of meals and lifestyle options. The cost of these services is determined by each Care Community and can vary between them.
   
• Extra Services: Some Care Communities have services that are attached to a specific bed as part of an agreement with the government. Residents who choose an extra services bed are required to pay the Extra Services fee. This fee is determined by each Care Community in consultation with the government and can vary within between them.
   

Checklist to help you navigate fees and charges

• Do you understand the costs and resident agreements associated with moving into care?
   
• How does the home charge for the room you are interested in?
   
• Can you see a copy of the home’s latest Prudential Compliance Statement showing that they have met their obligations to repay lump sum accommodation balances?
   
• Are the fees reasonable and what do they cover?
   
• If the home has Additional Services and/or Extra Services, are these services and offerings that you value and can afford?
   
• Which services are considered ‘standard’ and which are considered ‘additional’?