Aged Care fees and charges explained simply.

Since the Living Longer Living Better changes to aged care fees and charges came into effect on 1 July 2014, the costs of aged care have become very complicated and confusing. It is easy to find information about the costs of residential aged care by just doing a google search or going on to the website. To save you that trouble, in summary, there are 4 components to the costs and those components are:

1. daily care fees which every resident pays. These are pegged at 85% of the full aged pension, currently $50.16 per day and revised every March and September;
2. means tested care fee which, as the name suggests, are calculated using a very complicated formula on the resident’s income and assets. The formula is not only complicated because of the convoluted definitions of the various elements of the formula but also because of the rules around what is included and excluded from each of the elements of the formula. They vary from $0 per day to around $245 per day;
3. extra services or additional services fees which some facilities (but not all facilities) charge. These fees have no bearing on the care provided; they are just extra or additional services such as wine with meals or newspapers or other items that can usually be purchased independently of the facility. If you are considering a facility with these charges, you should ask what the resident gets for those charges and work out whether you think it is worth the cost;
4. Accommodation Payment (what used to be called the bond). This can be paid to the facility in whole or in part as either cash which is called a Refundable Accommodation Deposit (RAD) or as a Daily Accommodation Payment (DAP). The DAP is calculated as an interest payment on the amount of Accommodation Payment that is not paid as a RAD. The interest rate is fixed by the Government, currently 5.77% per annum, and paid on any part of the Accommodation Payment that is not paid as a RAD for each day in care. The RAD is guaranteed by the federal government and refunded when the resident leaves the facility.
You pay some or all of these charges, depending on the resident’s means and whether the facility charges extra services or additional services fees. The aged care residential facility, in conjunction with Centrelink, will work out the payments for you if you want them to or if you do not take control. Residents will most likely but not always need to complete the Centrelink assessment form and aged care residential facilities now often hand them out during a tour of the facility and want them filled out before the resident is admitted. However, it is not their job to optimise these costs. There are numerous ways to ensure that you are not paying more than you should for aged care and every situation is different. It is nigh impossible to work out how to do it unless you are a aged care specialist financial adviser. Pensions can be affected by the way that aged care is funded and paid for and the way the resident organises the funding of aged care can be to the financial detriment of the resident.  Seek advice from a specialist in aged care. We can assist.

So, if you do not already have a financial planner, given the current bad press around financial planning, how do you choose the right one? As aged care is seen as a growing source of revenue, a lot of planners will tell you they have the requisite knowledge when they do not. Here are some tips (although not foolproof):

– you can google ‘aged care financial advice’;
– screen the results for those who, on their website, focus on financial planning for aged care;
– ring around those firms and find out the cost of the advice. The cost varies from around $500 to over $3,000. Cost does not indicate quality. The cost is generally a function of the manner in which they deliver the advice; and
– choose one that charges a fixed fee for that advice.
Or you can call us.

Until next time.

Sara and Margaret

*All figures in this article are correct as at 1 June, 2018.  The figures are reviewed quarterly.

How do home care packages work?

How do Home Care Packages work?

Home Care Packages are federally funded packages which provide services at home for those who need them.  An individual needs to be assessed as needing care to access these packages.  The assessment process is free and is done by your local assessment service, usually in your home.  To start the process, you need to call My Aged Care on 1800 200 422 who will send a referral to your local assessment service.  If you are eligible for a home care package funding, the assessment will state whether you are eligible for a lower level package (level 1 or 2) or a higher care package (level 3 or 4).  Each of the 4 levels equates to an amount of funding – about $8,000 per annum for a Level 1 package and about $49,500 per annum for a Level 4 package.  The level depends on your needs disclosed in the assessment process so it is important that you do not understate your care needs during the assessment process.  Even if you are wealthy, you can receive these subsidies although you will be required to make a contribution if your income exceeds certain thresholds.

What happens after you are assessed as eligible?

Once you are assessed as eligible, your name is placed on a national queue.  There are a limited number of Home Care Packages available and you need to wait your turn.  Your priority for one of these packages would have been determined at the time of your assessment.  You will receive a letter from My Aged Care when your Home Care Package is allocated to you and you then have 56 days to select and appoint an Approved Provider.  You can find a list of Approved Providers in your area by searching the My Aged Care website here behind the Home Care Packages tab.  The home care services under a Home Care Package are delivered under a Consumer Directed Care model meaning that you can choose the services you want to be delivered provided that the services fall within the permitted uses for the funds. Approved Providers vary in terms of services that they provide and the prices they charge for those services so it is very important that you know what services you want and that you shop around to get the best out of your package.  The only way that can be done at the moment is actually calling a number of Approved Providers and asking – websites often do not disclose you the information you need to make a fair comparison.

How much will my home care package cost me?

There are two potential components to the cost to you of a home care package:

  1. a daily care fee for which the maximum amount is pegged at 15% of the full single age pension – currently around $10 per day.  Many Approved Providers will either negotiate this fee with you or not charge it at all; and
  2. an income tested fee which depends on your income (or deemed income).  This fee is generally not negotiable.  For full age pensioners, there is no income tested fee.  For part pensioners, the income tested fee is maximum of around $5,000 per annum which is averaged out over a year and for self funded retirees, the maximum is around $10,000 per annum averaged out over the year.

These income tested and daily care fees (if charged) can mean that it is not cost effective for a part pensioner or a self funded retiree to take up a Level 1 or 2 package because it ends up costing more than if the services were funded privately.  You should ask the Approved Provider whether it would be more cost effective for you to not to take up the Home Care Package with them.  Level 3 and 4 packages are always cost effective irrespective of income.

What do I do while I am waiting for a home care package?

The wait times for a Home Care Package can be considerable.  Sometimes, the assessor who has done the original assessment will give approval for interim services to tide you over.  These are often expressed in your My Support Plan (the report received from the assessor) as individual services such as ‘Domestic Assistance’.  If these services are approved, you can search the My Aged Care website here behind the ‘Help at Home’ tab to find Approved Providers in your area for those services.  Once again, you should shop around to find out the services that are provided and the amount it will cost as it does vary between Approved Providers.  If you hold a DVA Gold card, you may be entitled to services from DVA.  If you need services immediately and not have these approvals, the only option is to privately fund the services until the Home Care Package is finally allocated.

Implementing home care services can be time consuming and stressful.  If you need help accessing the services or understanding the options, contact us by phone on 1800 744 676.

Until next time

Margaret and Sara

Helping Seniors Settle in Aged Care

9 Effective Tips to Help Seniors Settle in Aged Care Easily

Seniors moving from independent living to an aged care residence is a bit challenging at first. Likewise, the entire family going through such might find it hard to adjust to changes. For old people, most of all, adjusting to a new environment and dealing with strangers may become distressing.

But because such times eventually come for most families, preparation is key.

According to the Australian Institute of Health and Welfare in 2016, there is about 1 out of every 3 seniors who have already gone through aged care; whether permanent residential care or respite care. It is inevitable for many.

Although it is emotionally upsetting to let your elderly parents move out of the house, you can do a few things to make this transition from home living to aged care an exciting experience for the entire family.




Your ageing parents may become emotionally invested in their own home. Thinking about leaving it, may make them feel apprehensive and morose. So, before anything else, you have to make sure that they are prepared emotionally. Let them have their time to grieve.

However, you must clarify why they have to go through changes and why they are moving. This will help them understand where you are coming from. Since moving out from their own home is perceived as a loss of control, you can let them take part in the process of planning their transfer.




Speaking of planning, you can provide them a visual of what to expect. If possible, show them possible aged care facilities and the potential rooms for them. To be creative, you can create a graphic plan of their residence by cutting pieces of paper to represent furniture and having elderly loved ones help in arranging them. In this manner, they will have an idea of what they are getting into, making them feel excited about moving out.




This should not be a solo job. If possible, you can gather family members to help you out with the planning. Encourage your siblings and other close relatives to take days off from work and even let young children participate. Surrounding your elderly relatives with their loved ones will make them feel inspired and courageous, thus easing out the emotional stress they are going through.  




Since your ageing parents are moving out of their home, downsizing is sure to follow. Go through your family’s possessions and see which stuff needs to go and which needs to stay. Categorise each item and label accordingly.

However, you must not do all the deciding and allow your parents to take charge and see which objects will go with them and which will be passed on to other members of the family. This might cause them to be too emotional. So just check if they will be bringing too much stuff with them to the nursing home.




Moving your loved one to an aged care facility is, in itself, an emotional phase in life. However, you must remember to keep a positive outlook during this transition even if your elderly parents do not. You have to be their emotional support during this time. Never complain and bicker as doing these may only make matters worse.




Remember the plan you did earlier? Now is the time to execute that plan. Once you have brought in all the furniture and stuff, you can start making the room homely. Add aesthetic appeal if possible and make it feel similar to a senior’s old home or bedroom. Bring in the same decorations they had and make sure that the entire space is very comfortable for them to move around.




Feeling abandoned is probably the most common feeling seniors get when in aged care facilities. So it is extremely vital to visit them once in a while if your schedule permits. Just spend at least a few moments to catch up with them. These moments can do wonders for them.




Your visits, be it weekly or monthly, are also opportunities to check-in with the staff. Hear out any complaints from your ageing parents and see if these are reasonable. Whenever they have complaints, make sure that you politely bring this to the attention of the staff. Similarly, you can ask what activities are done daily or ask for any special requests. Just remember that the entire management and the staff are only there to make sure that all residents are comfortable and happy with their services.  




If you think your elderly loved one can manage, you can take them out for afternoon walks or meals in nearby restaurants. You can come up with fun activities and bring along with you other members of the family to join in. By having friends and family over to spend time with seniors, living in aged care will be a bit easier.


Helping an elderly family member or a friend transition into aged care facilities or nursing homes may draw out a lot of emotions. By following these simple tips, the move will become less painful for everyone.

Make sure to choose the right aged care home on the first try so future transfers are avoided. Seek financial and legal advice today.

Call Signpost Aged Care Services on 1800 744 676.  

Until next time

Sara and Margaret