Your Funding Options

September 05, 2017

It’s never an easy decision to move into a Residential Aged Care. The need can come unexpectedly, at an untimely moment and with a great deal of urgency. Adding to the stress of this emotionally charged situation is the challenge of coming to terms with the complexities of aged care funding and a vocabulary of new terminology.

That’s why we recommend that you call us and speak with one of our friendly experts who would be happy to explain things, answer your questions and help you through the process so that your experience is easy and quick as possible. Just call us on 1800 632 314.

We’ve also put together this summary of how Residential Aged Care funding works so that you have a reference to come back to.

Options

While private funding is an option, most people in a Residential Aged Care in Australia receive some level of subsidy from the Commonwealth Government. The amount of subsidy depends on your financial situation and is regulated by the Government’s Aged Care Act 1997. The Act also has protections in place to make sure that your care is affordable. We highly recommend that you seek advice from your pension provider or independent financial planner prior to applying for the subsidy.

There are three categories of residential Aged Care fees:

1. Accommodation fees
2. Daily care fees
3. Fees for optional services

1. Accommodation fees

These cover your accommodation expenses including your room, the common areas and amenities in a Residential Aged Care. Many people qualify for some level of financial assistance and can have their accommodation fees partly or fully covered.

To find out if you are eligible for support, you’ll need to submit a “Permanent Residential Aged Care Request for Combined Assets and Income Assessment” form that will be used by the Department of Human Services or Department of Veterans’Affairs to assess your financial situation. We can supply you with this form.

If they determine that you’re required to contribute to the cost of your accommodation, you have 28 days after you enter the Residential Aged Care to decide how you would like to pay for your accommodation.

There are 3 ways to do so:

Refundable Accommodation Deposit (RAD)

This is a single amount that is paid upfront and fully refunded to you when you leave the Residential Aged Care.

Daily Accommodation Payment (DAP)

This is a daily fees that is billed to you on a monthly basis.

A combination of RAD & DAP

It’s a combination of an upfront RAD payment and a monthly DAP payment and it works like this; the more RAD you pay, the lower the DAP fees or if you pay less RAD, your DAP fees ill be higher. The mix of RAD and DAP that you pay is your choice but will probably be limited by your financial situation. For example, if you don’t have enough savings to pay a large RAD but are on a pension then paying a lower RAD and using your pension income to pay the higher monthly DAP fees may be an option.

You also have the option to have the DAP fees deducted from the RAD that you paid. That means the value of those fees would be subtracted from the RAD refund when you leave the Residential Aged Care.

2. Daily care fees

When you enter aged care you will be asked to pay a fee to cover daily living expenses such as your care, meals, cleaning, laundry and more. This “Basic Daily Care Fee” is calculated at 85% of the basic rate of the single aged pension.

However, based on your current income and assets, the Department of Human Services could determine that you need to pay a “Means Tested Daily Care Fee”. There are protections in place to cap the total amount that you can be asked to contribute annually as well as over your lifetime.

3. Fees for optional services

There may be a number of optional services available to you that have fees associated with them should you choose to receive them. These can include the Internet, pay TV, private telephone, mobile phone, newspaper deliveries and many more optional services. Some of these services may need to be paid directly to the service provider, such as a mobile phone company, while others may be able to be paid via the Residential Aged Care.

If you have any questions please feel free to call us and speak with one of our friendly experts who would be happy to explain things, answer your questions and help you through the process so that your experience is easy and quick as possible.

You may want to also take a look at our Common Questions