Establishing exactly what an individual’s cost will be in residential aged care can be confusing as we have a number of parties involved. You have the residence itself and the services it offers, and Centrelink and the subsidies it can provide.
Live well club for the Over 50s, 60s, 70s and seniors.
These fees are calculated after taking into account the clients’ financial position, whether they are single or part of a couple and whether they have their own home. Some residents enter aged care as a fully supported resident (someone of limited means with less than $46,500 of net assets) or partially concessional where their assets are between $46,500 and $159,423.
If income and assets are above these levels then they are considered a ‘fully financial’ resident and need to pay the advertised ‘Refundable Accommodation Deposit’ (RAD) amount. This is a per-person amount so if we have a couple they would need $318,846 of net assets before they are considered fully financial.
Confused yet? Well, it even gets a little messier. If one half of a couple is remaining in the primary residence then the house may be excluded when considering net assets.
Assuming your net worth is more than $200k and you are single you would be classed as fully financial. The accommodation costs can be paid by way of lump sum RAD (Refundable Accommodation (deposit) or a DAP (Daily Accommodation Payment) or any combination of the two.
Average RADs in Queensland’s South-East (excluding Brisbane) are around $400,000. It is important to note the RAD is refundable and government-guaranteed. Ongoing costs are the daily care fee, which is currently $48.25 per day which covers 24-hour care, food, laundry and toiletries. Some facilities charge an extra service fee which can be for a larger room, nicer fixtures and fittings, a balcony, choice of meals, wine with dinner, etc. This cost varies from $10 per day to $44 per day and varies from residence to residence.
The other cost that self-funded retiree residents can be asked to pay is the means-tested fee which is an amount that the government asks you to contribute towards the cost of care and is calculated on the level of assets and income you have.
There is an annual limit of $25,939 per annum and a lifetime cap of $62,255. So for a full financial resident with a daily care fee, extra services and a means-tested fee, the daily fees could be anywhere between $129.25 a day and $163.25 a day (assuming you have paid the RAD). Any pension or other income you receive can be used to offset this.
The means-tested fee is the fee that tends to surprise new residents. Clients with higher levels of assets and income are not just going to lose subsidies, they will also contribute additional fees to their support. As mentioned above, it does have a lifetime cap, however, it can be expensive in those first few years. Other costs are medication and private health insurance which are not covered by the daily care fee.
Many people wait until the decision to enter a residence is forced upon them before learning about their options and the costs involved. There are strategies to help manage the net asset position and maximise income support where possible, but this is very dependent on the individual’s financial position and personal circumstances, and you are far better off taking the time to understand the options and being prepared. This can reduce stress and allow for less emotive decisions.