Aged Care Costs & Considerations - Need Advice?

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Residential Aged Care Costs & Financial Considerations

Understanding aged care costs can feel overwhelming at first. The good news is that financial arrangements are designed to ensure older Australians can access the care they need, while those who can afford to contribute towards their care and accommodation do so.

The Australian Government continues to fund the majority of residential aged care costs. Depending on your financial circumstances, you may be asked to contribute to some of these costs.

Every person's situation is different, and the fees that apply to you will be determined through a means assessment completed by Services Australia.

1. Basic Daily Fee

The Basic Daily Fee contributes towards everyday living expenses such as:

Meals and refreshments
Laundry services
Cleaning
Heating and cooling
General household services

This fee applies to all residents and is set by the Australian Government.

For many residents, particularly those receiving government support, this may be the only ongoing fee payable.

2. Accommodation Costs

Accommodation costs help cover the cost of your room and facilities within the aged care home.

Depending on your financial circumstances, you may:

Have your accommodation fully supported by the Australian Government
Pay part of your accommodation costs
Pay the full agreed room price

Accommodation can generally be paid in one of three ways:

Refundable Accommodation Deposit (RAD)

A lump sum payment that is generally refunded when you leave the aged care home, subject to applicable government rules and deductions.

Daily Accommodation Payment (DAP)

A daily payment instead of a lump sum.

Combination Payment

A combination of a partial RAD and partial DAP.

Before moving in, we'll explain all available payment options and help you understand what applies to your situation.

3. Means-Tested Contributions

Some residents may be asked to contribute towards the cost of their care and everyday living services based on their income and assets.

Under the current aged care funding arrangements, assessments may determine contributions towards:

Everyday living and hospitality services
Non-clinical care and support services

Importantly:

The Government continues to fund all clinical care.
Contribution amounts are based on an individual means assessment.
Protections and contribution caps apply to help limit what residents can be asked to pay over time.

Services Australia will advise you if any means-tested contributions apply.

4. Higher Everyday Living Fee (HELF)

The Higher Everyday Living Fee (HELF) is an optional fee for residents who choose to access additional lifestyle, hospitality or wellbeing services that go beyond the standard services required under the Aged Care Act and Strengthened Quality Standards.

Examples may include:

Enhanced dining experiences
Premium entertainment options
Additional lifestyle programs
Beauty and personal care services
Other optional hospitality services

Participation is entirely voluntary, and residents can choose whether these additional services are right for them. Providers cannot require residents to purchase optional services as a condition of receiving care.

Support for Residents with Limited Financial Means

We believe quality aged care should be accessible to everyone.

Residents with lower levels of income and assets may be eligible for government assistance with accommodation and care costs.

Our team can help you understand what support may be available and assist you in navigating the assessment process.

Existing and Legacy Fee Arrangements

The Australian aged care system is currently transitioning to new funding arrangements introduced under the Aged Care Act 2024.

As a result, not all residents will pay fees under the same structure.

Some residents may continue under earlier fee arrangements that applied when they first entered aged care, while others will be assessed under the newer arrangements. In some cases, accommodation arrangements and care fee arrangements may also differ.

The fee structure that applies to you will depend on factors such as:

When you entered residential aged care
Whether you were already receiving aged care services before the reforms commenced
Your individual income and assets assessment
Any applicable government transitional arrangements

The Australian Government has introduced "no worse off" protections for many people who were already receiving aged care services before the reforms were introduced. These arrangements are designed to ensure eligible older Australians do not pay more than they would have under the previous system.

Because every person's circumstances are different, our team can help you understand which fee arrangements apply to you and explain any costs before you move into care.

Considering aged care for yourself or a loved one? We’re here to help.