The cost of aged care can depend on a lot of factors – from the type of care you choose, the level of care you need and your income and assets.
Regardless of which model of aged care you choose, be it home care, residential aged care or an aged care community, what you end up paying can depend on your own financial position. Let’s break down the type of aged care available and what costs you could be looking at for each.
Subsided home care comes in the form of the Federal Government’s Home Care Package Programme. Home Care Packages allow you to stay in the comfort and familiarity of your own home while the care comes to you. Home Care Packages range from level 1 for low-level care up to level 4 for high care.
While the care is subsidised by the Federal Government, you may be asked to pay an income-tested care fee or a basic daily care fee towards your home care. The income-tested care fee is based on your financial situation and will be assessed by the Department of Human Services (DHS), while the basic daily care fee can be up to 17.5% of the single basic age pension. The schedule of fees and charges are updated regularly and can be found on the Aged Care website.
Residential aged care or nursing homes are what comes to mind when many people think of aged care. Residential aged care facilities offer care for those who can no longer stay in their own home and need more help with day-to-day tasks or health care. While residential aged care is also subsidised by the government, what you pay is determined by an aged care assets and income test through the DHS. There are a number of upfront and ongoing costs that you will need to pay to cover your accommodation and care for the duration of your stay. These costs can vary from resident to resident and can include:
To get an idea of costs based on your personal circumstances, use the My Aged Care residential care fee estimator. Most facilities are required to offer a certain number of places for people who can’t afford to pay accommodation costs.
Aged care communities are best described as combining the level of aged care services offered by nursing homes with the community living and lifestyle of retirement villages. This is what we offer at Seasons Aged Care. The main differences between this model and that of a residential aged care facility is that you will be living in your own private self-contained residence with access to 24-hour care and a personalised care plan that is developed with you and your family’s input.
The cost of this model of care differs from provider to provider but with most aged care communities falling under the Retirement Villages Act each share key similarities in their financial model and the terminology.This includes the payment of an ingoing contribution, a weekly payment and a deferred management fee (which covers accommodation costs) deducted upon exit from the community.
For some providers, this deferred management fee is a set percentage (usually about 40%). At Seasons, our deferred management fee takes the form of a daily accommodation fee, which will be deducted from your ingoing contribution for the length of your stay. This amount is capped at four years.
When trying to work out which option would suit you better from a financial perspective it’s important to get financial advice from a financial planner or accountant who is familiar with the aged care sector. They can help you work through the costs involved in each option and also advice you on financial decision making around your investments and whether to sell your own home.