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Australia has a rapidly growing aging population that has to deal with the fact that they will have to sort out their accommodation once they are retired. Many people are intimidated by this concept and tend to shut down when the topic is brought up. It doesn’t have to be stressful though as there are many very useful resources out there that can be very beneficial.

To understand aged care finance you must be aware of all the different fee and pricing structures that different establishments have in place. Understanding your accommodation situation will ultimately decide your aged care finance for you. Your own finances also play a big part of this which is why it is important to understand how much everything costs.


Home care costs

The Australian Government does subsidize the delivery of home care services but they do however expect you to contribute if you have the capability to do so. The costs for each service are delivered under the CHSP and how much you contribute depends upon your income and how many services you require. When you enlist the services of a aged care finance advisor they will discuss with you what services you need so that you can get a rough estimate of how much you will be paying.

The rates for your assistance are reviewed in March and September of every year so that they are in line with the pension age. This also includes each individual including those who are in a relationship.

As of September 2018, the basic home care package costs $146.02 per person and is to be paid on a fortnightly basis. However that doesn’t take into consideration your income as you may be required to pay more. The maximum amount you will be charged is up to 50 percent of your income that is above the Age Pension which is $834.40 as of September 2018.

Sitting down with an aged care finance advisor can really set you up to get the best deal and idea of what is going to happen. As they have the industry experience they will be able to assist you in the bet way possible.


Nursing home costs

When discussing aged care finances, nursing homes will pop up in the conversation. The residents of these facilities are expected to pay an amount towards their daily living expenses which includes services such as:

  • Meals
  • Cleaning services
  • The washing and drying of your laundry
  • Air con and heater operational costs
  • Personal care
  • Daily activity assistance
  • Some pharmaceutical services and medical care

Like most things to do with aged care finances the amount that needs to be paid is reviewed twice a year in March and September.

The maximum daily fee that an individual is required to pay is 85 percent of the Age Pension. As of September 2018 the Age Pension is $834.40 per fortnight which means that the maximum amount to pay for nursing home care is $709.24 a fortnight (or $50.66 a day).


Accommodation payment plans

To assist with aged care finances there are payment plans in place to make the process easier. The first payment is known as a Refundable Accommodation Payment (RAD) which is a single payment that is mostly refundable to your or your estate once you leave the establishment.

The second plan is a daily accommodation payment which is calculated on a per day basis and is not refundable. It is essentially like paying rent as you are paying for the services and shelter of the facility rather than having a backlog of money that is deducted over time.