UNDERSTANDING RESIDENTIAL AGED CARE

Residential Aged Care is funded by a combination of private and public financing. Basically, there are two main categories of funding:

1. CARE COSTS PAYMENTS

   In general, the Government funds most of these payments, which cover the costs of care and related services.

   
   

   The Government calculates and makes payments directly to providers (that is, residential care facilities) on behalf of residents based on the resident’s classification under the Australian National Aged Care Classification (AN-ACC). The payment consists of a basic subsidy plus supplements based on the resident’s appraised specific care needs (as distinguished from general nursing care, interventions, and treatments).

   
   

   Residents may be asked to contribute to the cost of their care and accommodation through payment of the Means Tested Amount (MTA), which involves assets and income tests.

   
   

   The MTA is collected by the provider but is wholly paid to the Government.




2. DAILY LIVING EXPENSES AND ACCOMMODATION PAYMENTS

   In most cases, residents pay for the majority of these charges, which cover the cost of food, utilities, and providing accommodation for residents.

   
   

   • DAILY LIVING EXPENSES:

     These expenses consist of day-to-day living costs just like when living at home, such as breakfast, lunch, dinner, morning and afternoon teas, linen, laundry, lighting, heating and cooling, amenities, room cleaning, entertainment, excursions and care costs such as nursing and personal care.

     
     

     This is partly covered by payment of the Basic Daily Fee (BDF), a standard contribution that all residents pay.

     
     

     The BDF is currently set by the Government at 85% of the single basic age pension, indexed twice yearly at the same time as changes to the age pension. Residents in financial hardship can apply to the Government for help paying the BDF.

   
   

   • ACCOMMODATION PAYMENTS:

     This is a payment to assist with the capital costs of building, landscaping, furnishing, maintaining and providing accommodation in the residential care facility, just like at home.

     
     

     The Accommodation Payment prices vary to reflect different room sizes, amenities and locations.

     
     

     Residents can choose to pay their Accommodation Payment as a refundable lump sum deposit, known as a Refundable Accommodation Deposit (RAD), an equivalent periodic (daily) payment, known as a Daily Accommodation Payment (DAP), or a combination of both.

The Government assesses and assists those residents who do not have sufficient means to pay their accommodation payments. Fully and partly supported residents (full and part pensioners) may be eligible for the Government’s Accommodation Supplement payment.

If a resident’s assets are between $61,500.00 and $206,039.20 (1st October - 31st December 2024), the resident can be means tested and may be required to pay a lesser Accommodation Contribution, rather than an Accommodation Payment. Like the Accommodation Payment, an Accommodation Contribution can be paid as a refundable lump sum deposit [the Refundable Accommodation Contribution (RAC)], periodic (daily) payments [the Daily Accommodation Contribution (DAC)] or a combination of both. If a resident chooses a combination payment, the DAC can be deducted from the RAC.

The actual Accommodation Contribution amount is assessed and advised by Services Australia (Centrelink).

The Government will either pay the full or a part amount of the Accommodation Supplement, depending on the resident’s assessed financial circumstances.

The Means Tested Amount (MTA) is the contribution that residents may be asked to pay towards to the cost of their accommodation and care. It is calculated through asset and income tests.

A resident’s contribution is currently capped to a maximum of $34,174.16 annually to a lifetime maximum of $82,018.15. This will be assessed and calculated by Services Australia through Centrelink.

This is different to the situation prior to 1st July 2014, where only an asset assessment was used to determine a resident’s contribution towards accommodation costs, and only an income assessment used towards their ongoing costs of care.

Selected Regents Garden facilities have been approved to offer Extra Services, which is where residents are provided with higher standards of accommodation, services, and food. For this, an additional Extra Service Amount is payable by residents. Please look for the “Extra Service + PLUS” logo for suites where an Extra Service Amount applies.

The Extra Service Amount has been approved by the Department of Social Services. The Extra Service status does not affect the care provided to residents, as all facilities are required to meet set care standards for all residents.