Residential care
Step 4: Financial decisions
“Can I afford my care?” is bound to be a big worry for you. And it’s not surprising as there are lots of fees and big numbers are attached. Let’s first understand what fees you might be asked to pay.
Residential care fees
Why and what it covers
1. Accommodation payment
- On average, expect $400,000 – $550,000.
- But ranges up to $2.2 million.
You will be asked to pay for your room plus use of the amenities and common areas.
You need to choose a room that you can afford but you will be able to choose to pay a lump sum (buy the right) or daily fee (rent the room). If you are assessed to have low financial capacity, the government sets the room price instead of the provider and helps with the cost. Learn more
2. Basic daily fee
- $58.98 per day (indexed)
A contribution towards your daily living expenses such as food, electricity, cleaning and laundry services – the things you used to pay for at home. Learn more
3. Means-tested fee
- Up to $358.41 per day.
- Limited to $31,707 a year and $76,096 over your lifetime.
A contribution towards the cost of your care – includes staff, equipment and resources used to care for you. How much you pay depends on your assets and income (means-test assessment) and the government pays the balance. Learn more
4. Additional service fees
- Typically $10-$60 per day.
- But set by provider and varies.
Your care provider might offer additional services that can provide you with choices, a higher quality of services, or additional services that can add to the quality of your lifestyle.
This might be a compulsory package attached to your room, or you might be able to select from a menu of items. Any services and fees should be agreed and specified in your Resident Agreement.
5. Other expenses
- Estimate $100 per week plus medical costs.
- Depends on your choices and health.
As well as the fees paid to the provider, you will also have personal expenses. For example, you might want to pay for coffees, sweets, presents for family, hairdressing or outings. You will also need to pay for medical expenses, chemist bills and health insurance costs. A good cash reserve to cover unexpected or larger expenses will be important to maintain.
Work out your costs and how to make affordable
Calculate your fees
Use the MyAgedCare calculator to gain an estimate of your means-tested fee (fee).
Get financial advice
An Accredited Aged Care ProfessionalTM can help to calculate your fees and provide strategies to generate the cashflow you need, while also protecting the value of your estate.
Examples
We have provided examples of how the fees work – so you can understand them more.
Examples: residential care fees
(current to 19 March 2023)
Athol – single (lives alone)
Athol is moving into residential care and has been quoted a room price of $520,000. He has the following assets:
- Home: $960,000
- Contents: $5,000
- Cash & shares: $90,000
Fees payable:
- Room price: $520,000 or $100.58 per day
- Daily care fee: $56.87 per day
If no lump sum is paid, Athol needs to pay $157.45 per day ($57,469 per year) plus personal expenses. This can reduce if he pays all or some of his room cost as a lump sum.
Mary & Will – couple (self-funded)
Mary is moving into residential care, while her husband Will continues to live at home. She has been quoted a room price of $650,000. They have the following assets:
- Home: $870,000
- Contents: $5,000
- Holiday home: $230,000
- Cash & shares: $120,000
- Account-based pension: $700,000
Fees payable:
- Room price: $650,000 or $125.73 per day
- Daily care fee: $56.87 per day
- Means-tested fee: $14.28 per day
If no lump sum is paid, Mary needs to pay $196.88 per day ($71,861 per year) plus personal expenses. This can reduce if she pays all or some of her room cost as a lump sum.
Andrew & Jess – couple (low-means)
Andrew is moving into residential care, while his wife Jess continues to live at home. He has been quoted a room price of $480,000. They have the following assets:
- Home: $930,000
- Contents: $5,000
- Cash & shares: $60,000
- Account-based pension: $200,000
Fees payable:
Andrew will be assessed as low-means so the published room price does not apply. The government will determine how much he pays for his room, and this will change as their circumstances change.
- Starting room price: $37.26 per day or $192,633
- Daily care fee: $56.87 per day
If no lump sum is paid, Andrew needs to pay $94.13 per day ($34,357 per year) plus personal expenses. This can reduce if he pays all or some of his room cost as a lump sum.
