Understanding residential aged care home accommodation costs

Image: Emmaus Residential Aged Care Facility

When moving into an aged care home, it's essential to understand the costs involved. Here's a breakdown of how room prices are determined and your payment options:

Room prices

• Room price: Aged care homes are required to publish their maximum accommodation costs for their various rooms on My Aged Care website. Prices vary based on room type, geographic location (i.e. great Brisbane vs regional areas), quality of the facilities etc.
• WMQ room prices: our room prices can be found in our residential aged care community pages. Find a community you like; scroll down to Room cost; and download the room cost PDF.
• Types for room: rooms can be single or shared, with shared bathroom or ensuite, studio style or with a separate living area, be part of a standard or premium community.
• Considerations: Community location, room location, price, type, and availability should be factored in when choosing a provider.

Payment options

You have three main options for paying accommodation costs:

1. Refundable Lump Sum (RAD*)

• Pay the full amount upfront.
• Refundable when you leave (minus any costs used for other aged care fees).
• Affects your means assessment and may impact other care fees.

*RAD: room price (RAD) is only payable if a person has assets income over the first threshold $206, 039.20. If the person asset/income is under $61,500 they will be deemed fully supported and not subject to paying a RAD. Should their assets/income be between $61,500 and $206,039.20, Services Australia will advise what their room accommodation contribution RAC would be.

• DAP: Pay the full cost of accommodation daily (non-refundable).
• DAC: Government helps with costs based on your means assessment.
• No refund when you leave.

3. Combination of Lump Sum and Daily Payments

• Split the payment across both methods, e.g., a lump sum for part of the cost and daily payments for the rest.

Choosing your payment option

• 28 days to decide: You have 28 days from your move-in date to choose how to pay.
• Non-refundable payments: If you don’t decide within this time, you’ll pay daily payments.
• Lump sum payment deadline: Providers must give you at least 6 months to pay a lump sum.

Lump Sum Details

• Draw down option: You may use part of your lump sum for other aged care costs.
• Independent financial advice: Highly recommended to ensure the option suits your financial situation.
• Impact on partner: A lump sum payment may affect your partner's aged care costs as well.

Daily Payment Calculations

• DAP: Calculated using the Maximum Permissible Interest Rate (MPIR).
• DAC: Based on your means assessment.
• MPIR (maximum permissible interest rate): Government-set interest rate used to calculate a daily accommodation payment based on your agreed room price. The MPIR is not an interest charge to residents who have not paid for accommodation costs in full. It ensures daily payments cover accommodation costs if you choose not to pay a lump sum.

Seeking Financial Advice

• Free Service: Services Australia’s Financial Information Service (FIS) offers free, tailored financial advice. Call 132 300 to make an appointment or learn more.

Tip: Always consult with a financial advisor to understand the full implications of your aged care payment options, as they may impact your overall financial situation.

Visit the Government's My Aged Care webpage for more details.