Aged Care Levels 

Aged care levels on a medical care basis will still have low to high care needs for residents. However, financially there is now no distinction on a low of high care level. Accommodation costs and fees will be similar for both low and high care needs as residents age in place.

 

Supported Accomodation Care beds:

        • Accommodation Supplement also known as Daily Accomodation Contribution
        • Basic Daily Care fee
        • Means Tested Care fee generally not applicable for supported residents

Extra Service Care beds:

        • RAD (Refundable Accommodation Deposit)
        • And/or Daily Accommodation Payment (DAP). Is interest on the RAD.
        • Basic Daily Care fee
        • Extra Service fee opt in or out, or user pays. 
        • Means Tested Care fee (dependent on income & assets after thresholds)

 

 
Daily fees explained:
 

Accommodation Contribution or Supplement:

The amount of the accommodation supplement is calculatedon the basis of when the resident enters the facility and is determined by their level of assets. The full charge of accommodation is applicable if a single persons assets exceed the first asset threshold. See fully supported for more information on this site.
 

Basic Daily Care fee:

Also known as the standard resident contribution. This fee is applicable to all high level care residents and is a contribution towards costs of daily standard living such as meals, cleaning, laundry and heating (as well as assistance with personal care and medical care). The general rule is that the standard resident contribution is 85% of the maximum single age pension. However a number of grandfathering provisions mean that residents have their rate of daily fees set according to four categories. The main fee quoted by facilities is the 'standard resident contribution'. You can contact PrimeCare Financial Planning on (03) 9006 1736 to determine which rate is applicable. 
 

Means Tested Care fee:

This fee is payable after an income and assets free thresholds are reached, which is set by the government. The formula is complex as it is based on 'total assessable income' and assets levels and can either include a portion of the home or not at all. Income sources can include; aged or service pension, rental income, deemed income, trust distributions, super pension payments and overseas pensions.
 
 
You can contact PrimeCare Financial Planning for an accurate determination of your income tested fee (03) 9006 1736.
 

 Extra Service fee:

These fees are only payable to facilities that provide a better standard of accommodation, care services and hotel like services. It does not mean a better standard of medical care. This charge is stipulated by the facilities and varies significantly from facility to facility and is available in an opt in or out option of user pays. It is not a government standard fee.
 

Refundable Accommodation Deposit (RAD):

Aged Care RAD's and DAP's vary from facility to facility and you do not have to accept the RAD amount the facility offers you. RAD amounts are negotiable, however if the facility has a waiting list they will be very reluctant to reduce the RAD on offer. Some facilities will offer you a RAD room according to your level of assets. This may be beneficial in some circumstances, as the facility must leave you with a legislated minimum (see fee snapshot on current minimum amount), however generally people who own a home will be above this minimum amount. Therefore a resident may be charged far more for a room than market rates on the basis of the assets assessment. When this occurs it may be best to negotiate with the facility to lower the RAD amount. You also do not have to show the facility your assets assessment, particularly if you are a self funded retiree or if the facility is extra service. You should seek professional help to determine when it is ok to show the facility your assets position. 

Generally facilities have a set RAD (which is determined by local real estate values in the area), and the RAD will then vary according to the size of the room or view within the facility.

 If the resident is a member of a married couple, the combined assets of the couple are divided by half and the resident must still be left with the minimum amount.

The RAD payable is also guaranteed by the federal government in the event of insolvency by the facility, less the retention amount. So the RAD money is secure. If the resident decides to leave the facility the RAD is payable within 14 days or if the resident moves to another facility, the RAD must be rolled over within 28 days.

Daily Accommodation Payment (DAP)

This charge is payable on the balance of the RAD. If the lump sum RAD has not been paid in full on entry into a facility then interest accrues - the official term for this interest payment is 'periodic payment'. The Commonwealth Department of Human Services sets a ceiling rate and facilities cannot charge more than this rate. Most facilities will charge the ceiling rate, even though they have the discretion to charge a lower rate.The periodic rate is generally 4% above the current cash rates, so facilities have a very comfortable margin and hence their willingness to receive periodic interest payments. The resident is also locked into the same rate from the time of entry. This is a massive disadvantage for residents who move into facilities when interest rates are high. See fee snapshot for current rates
 

Retention amount: (Will no longer exist from July 1st 2014)

 
 
Call PrimeCare Financial Planning today to help with your Aged Care requirements on (03) 9006 1736