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Aged care costs and fees

From how much does a nursing home cost, to understanding the types of fees and charges they have. You will find all the information you need to determine which way your budget will work best for you, along with what services you can expect to get in a residential aged care home.

Last updated: July 19th 2022
How much does a nursing home cost? There can be many variables. [Source: iStock]

How much does a nursing home cost? There can be many variables. [Source: iStock]

Key points:

  • The cost of nursing homes can differ from person to person, and depend on your financial situation
  • You will pay a basic daily fee, which covers the cost of services, supports and care you receive from your aged care provider
  • If you can afford to you will pay a means tested care fee, which is contribution towards the cost of your care
Call now for an obligation-free chat regarding Financial Services options for you or your loved one with a financial services expert.

How much does a nursing home cost?

As you get older and the level of care you need increases, you might be wondering, ‘how much does residential aged care cost?’

The amount you’ll pay for a place in an aged care home depends on a number of things, including the type of accommodation you need or have chosen.

Aged care services costs can be broken down into a number of different areas, including fees for your daily care, an accommodation payment, means tested fees and any additional fees if you’re wanting extra services during your stay.

Your aged care fees could be paid with the money you earn from assets and investments, or the Age Pension. If you are unable to afford nursing home care but need it, the Government can provide financial hardship assistance.

Fees for aged care are also worked out based on your financial situation – income you earn and assets you own.

If you don’t have a lot of funds at your disposal you may need to specifically look for a Government subsidised nursing home, rather than a private facility.

For more information about the costs of private facilities, read our article ‘What are your non-Government funded aged care alternatives?

Daily fees explained

Everyone that lives in a nursing home pays a basic daily fee. This fee covers the cost of meals, cleaning, heating and cooling, laundry, personal care, assistance with daily living and medical care.

There is a maximum amount you can be charged for a basic daily fee, which is generally updated by the Australian Government in March and September each year.

The maximum is always 85 percent of the annual basic Age Pension for a single person, so that aged care costs for pensioners are still affordable.

An accommodation payment is also required on top of the basic daily fee, but the amount depends on your assets and income.

If you have less than $52,500 in assets you won’t have to pay an accommodation fee (rate as per 1 July 2022).

For those who own more than $52,500, an accommodation payment can be made as a lump sum deposit when you move in, as a rental type payment based on a cost per day that is not refundable, or as a combination of a deposit and daily rental fees.

What are means tested fees and charges?

The means tested fee is a contribution to the cost of your care, paid in addition to the fees above.

How much you pay towards your care is dependent on your assets and income, so it can change if your financial situation changes, but it is capped at a certain amount per year ($29,399.40 as of 1 July 2022).

Your assets include any houses you own, including the family home. You don’t have to sell your home to move into an aged care facility but what portion of the home you own and who will be living there when you move out will affect how much you pay in nursing home costs.

For example, if you and your partner own your home, but only you move into the nursing home and your partner continues to live at home with home care services, the home can’t be counted in your assets. However, if you own your home and live alone, an amount of the value of your house will count in your assets assessment.

Our aged care costs calculator can give you an idea of how all of these fees and assessments might apply to you.

Extra services

Extra services fees can cost anywhere between $10 and $100 a day on top of your regular aged care fees, depending on what you are being provided.

Only some aged care providers are approved by the Government to provide extra services, but these could include “hotel-like” services such as massage therapy, an additional television provider with more channels, more meal options, a wine, beer and spirits selection, daily newspaper delivery and weekly hairdressing appointments.

Your care is not impacted by extra services as the fee only relates to luxury comforts provided on top of the services covered by regular aged care home costs and fees.

Basic services every nursing home provides

Every nursing home provider, regardless of the fees you pay, is expected to:

  • Provide staff who are always on call for emergency assistance
  • Provide assistance with personal care like going to the toilet, eating, dressing and showering
  • Provide support with mobility and communication
  • Provide help to access therapy or health practitioner services
  • Support people with cognitive impairment, such as dementia

Every provider must also meet the quality standards as laid out by the Aged Care Quality and Safety Commission. These quality standards are compulsory for every aged care provider operating in Australia. You can read more about them on the Commission’s website.

Some aged care facility costs may change after moving into a home so it’s worth understanding what to expect over time and regularly reviewing your finances.

Call to speak to a placement consultant today about your particular circumstances and the cost of aged care homes on 1300 903 627.

Disclaimer: The information on this site is general in nature and does not constitute legal or financial advice. Readers should seek their own personal legal and financial advice from a suitably qualified practitioner.

Related content:

Nursing home fee estimator
Daily living in a nursing home
How to apply for a nursing home

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