Summary of the costs involved to move to an aged care home
We strongly recommend that you do the Income and Assets Test so you get a clear understanding of your money situation before you sign a contract to move into an aged care home (nursing home). See Aged Care Homes Tab Section 4.
What you have to pay for and when
Here are some typical scenarios:
- You are a pensioner with no family home – your aged care home costs are paid by the Government. You will be required to contribute 85% of your age pension towards your day living costs such as meals, cleaning, laundry, heating/ cooling. Everyone entering an aged care home can be asked to pay this Basic Daily Fee.
- You are a pensioner with your partner living in the family home or you have wealth of less than say $50,000 – your aged care home costs are largely paid by the Government. You will still be required to pay the Basic Daily Fee which is 85% of your age pension (assuming you can get a Government funded bed when you want it).
- You are not a pensioner and your partner is still living in the family home – depending on the assessment of your assets and income, as well as the Basic Daily Fee you will be expected to either pay for, or contribute to, your accommodation costs by either a lump sum payment called a Refundable Accommodation Deposit (RAD) or Refundable Accommodation Contribution (RAC) or non-refundable daily payment, a Daily Accommodation Payment (DAP) or Daily Accommodation Contribution (DAC). You may also be required to make a non-clinical care contribution and a Hotelling Supplement.
- You may or may not be a pensioner, you do not have a partner but you do have a family home – you are likely to be assessed as having enough income and assets to pay the Basic Daily Fee, the full accommodation price of the aged care home, non-clinical care contribution and a Hotelling Supplement.
N.B. There are annual and lifetime caps that apply to the Non-clinical care contributions.
Higher Everyday Living fees will apply if you choose a higher standard of accommodation or additional services.
Whatever your wealth, you will be required to have paperwork to prove to the aged care home your financial position and what you can commit to pay.
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View transcript of video hereIdeally you will have this worked out months before the move is planned. Then you will know which aged care home you can afford, and if you are on a pension, you will have identified the homes that are likely to have Government beds available for you at no cost above the pension.
To accurately complete the income and assets test for the government to calculate the rate you have to pay for your aged care and to support your application for an aged care home, you ideally will have an appraisal of the value of your family home. Our downsizing experts can provide this as a no oblifation service.
Brian White
Chairman Ray White
The cost of paying a RAD versus paying a DAP
It is important to understand the cost of the alternative ‘accommodation’ payments you may be required to pay, either an upfront lump sum RAD or the daily DAP fee (see Aged Care Homes Tab Section 4).
The lump sum RAD you pay (which is likely to be $300,000 or more) will be partly refunded to you when you leave.
If you choose to not pay the lump sum but pay a daily DAP fee, it will not be refunded when you leave.
The regulations state you have up to a month after moving into an aged care home to decide how to pay for your accommodation, (a lump sum amount, a daily payment or a combination of both).
12 weeks
Time estimate to complete all of the tasks within this step, including all sub-steps.
