Residential Aged Care Costs made simple

By Alan Lake, CFP© CPA(FPS) ACS SSA BComm DipFP

Aged Care Specialist, Soundbridge Financial Services

A friend or a family member has reached that stage in their life where they just can’t cope on their own anymore. They’ve been getting help and you have been doing what you can. But the time has come……

Apart from the emotional strain of this decision, you have little or no idea of the costs. How do we pay for the Residential Aged Care fees? What are the fees? What do we do with their existing home? Keep it? Rent it? Sell it? Will they get/keep/lose their Age Pension? What if I get it wrong?

Where do I go for help?

Many people rely on the internet and the advice of their friends and family. Sometimes that works. Often it doesn’t.

Fortunately, there’s another way….

Where do I start?

You can’t just turn up at the Aged Care facility (we don’t call them nursing homes anymore) and check in. Residential Aged Care is expensive and is very heavily subsidised by the Federal Government. And the government wants to know that someone actually needs the care the facility provides. Note, there are some completely privately run facilities that don’t receive any government funding. These facilities will be the subject of a separate article sometime soon – watch this space!

Your loved one will need an assessment – an ACAT test – performed by the Aged Care Assessment Team. You can book in via or by calling 1800 200 422.

Do this as soon as you can. The assessments are free, there may be a waiting list before you can get it done, and the outcome doesn’t expire.

With your ACAT assessment done, you can choose the Residential Aged Care facility. Look around. Some are run by not-for-profits (churches and other similar organisations), whilst others are run as commercial enterprises. Ask them about the different types of rooms – private with own ensuite, private with shared ensuite, shared rooms etc. Ask them about meals and activities. Look for a facility that has a coffee shop (for when you visit) and an in-house hairdresser. Be sure to ask them for their costs brochure and ask about their waiting lists. Importantly, find a facility that is convenient for you when you want to visit.

What are the Fees?

There are 4 broad categories of fees can apply:

  1. Entry Fees
    1. Entry Fees are usually either paid up front as a RAD (Refundable Accommodation Deposit), by instalment as a DAP (Daily Accommodation Payment) or a combination of the two. Importantly, you get to choose how you pay and we can advise which is the most appropriate for you. The RAD is published on the Aged Care Facility’s website and is fully refundable when the resident either passes away or leaves the facility to move to another. The refund of the RAD is 100% government guaranteed and there are no deductions from this amount, unless they are authorised by the resident.
    1. Different accommodation costs apply for residents with assets of less than $423,000. Residents with assets of less than $51,500 don’t pay an accommodation deposit or accommodation payment. But don’t be tempted to give away all their assets, there are special rules that apply to look-back over the last 5 years to see if this has been done.
  2. Basic Daily Care fees are paid by all residents and are determined by the federal government – currently $53.56 per day.
  3. Means Tested Care Fees are determined based on the resident’s income and assets and are subject to both an annual cap and a lifetime cap. The annual cap is currently $28,792 and the lifetime cap is currently $69,101 and we can calculate what these will be in your particular case and we can often recommend strategies to minimise these fees.
  4. Finally, Aged Care Facilities are able to charge Extra/Additional Service Fees and these are usually for a higher standard of accommodation (some facilities resemble 5 star hotels) or extra services/facilities (menu selections, alcohol with meals, internet access, pay TV etc). Some of these fees are mandatory and sometimes they are optional. You need to ask.

What’s next?

By now you will have a better idea of the process and the costs. But you are probably thinking how does this relate to me/us? Or now what do I do?

Fortunately, we’re here to help.

Call us on 07 4992 2624 for a free initial conversation. We have the skills and strategies to help reduce the costs and maximise your benefits and we can advise you on what is right for you.

Until next time, keep smiling!


Sources: – schedule-of-fees-and-charges-for-residential-and-home-care-schedule-from-20-september-2021.pdf


While every care has been taken in the preparation of this article, Soundbridge Pty Ltd (ABN 40 151 134 146) and AFTA Pty Ltd (ABN 18 624 984 550, AFSL 507423) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts.

The information and any advice provided in this document is general and has been prepared without taking into account your objectives, financial situation or needs, and might not be appropriate to your situation. Because of that, you should, before acting on the advice, consider the appropriateness of the advice, having regard to those things. Past performance is not a reliable indicator of future performance.  AFTA Pty Ltd does not warrant that future forecasts are guaranteed to occur.

The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases, the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither the Licensee nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document.

Soundbridge Pty Ltd (ABN 40 151 134 146) is a representative of AFTA Pty Ltd (ABN 18 624 984 550), Australian Financial Services License (507423), Registered office at 166 Quay Street, Rockhampton QLD 4700. Any advice on this website is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.

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