2020 has been an unconventional year, in which we have been faced with a once in a lifetime global health pandemic and our first recession in 20 years. A hot topic of late is the quality and safety of our aged care system, with the federal governments Aged Care Royal Commission well underway.
However, regardless of any flaws in our aged care system, it is still a key consideration for every Australian retiree and something that needs to be addressed as we get on with age and the need for ongoing care escalates. Below is a breakdown of the costs that you should expect if you are considering a move into an aged care facility.
Basic daily fee:
- Payable by all residents as a contribution for day to day living costs such as meals, cleaning, laundry, heating and cooling.
- Equivalent to 85% of the basic single person Age Pension.
- Currently $52.25per day (residents in designated remote areas may pay $1.06 per day more).
Accommodation payment or contribution:
- Cost of accommodation which may be payable depending on assets and income as well as choice of room. Also known as the applicable room fees, this can be negotiated with the aged care provider.
- Payable by residents not eligible for government subsidy in respect of cost of accommodation, however, partial subsidy may be required depending on asset/income assessment.
- Can be payable in either a fully refundable lump sum (RAD) or a daily accommodation payment (DAP) or a combination of both.
Means-tested care fee:
- Contribution towards cost of care which may be payable depending on assets and income.
- Income Component Thresholds – $27,840.80 per annum for singles and $27,320.80 (each) for a couple who are separated by illness. In a nutshell this means the tested fee will only apply to you if you earn above these income thresholds.
- Asset Component Thresholds – There are three levels of asset thresholds which determine if you are low means, moderate means or high means. The asset free threshold for low means is $50,500, moderate means is $171,535.20 and anything above $413,605.60 is high means.
- Subject to annual and lifetime caps with a current annual capping on fees of $28,087.41 and a lifetime capping of $67,409.85
- Currently the maximum means-tested care fee payable is $256.44 per day.
Additional charges / Extra services fee:
- Any other amounts agreed between the resident and the residential care facility.
- Includes additional care or lifestyle options.
Furthermore, you will need to consider whether to keep or sell the family home and for couples a key consideration is to decide if you move into care together or become separated by illness. It is a very complicated process and every scenario needs to be assessed based on its unique circumstances.
Please contact one of our financial advisers if you need advice in this area.
Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.