Aged care
Aged care can be a tricky area to navigate, and requires careful thought. To help you or your loved one obtain the best outcomes, this three-part guide will take you through the process of applying for, receiving, and paying for suitable aged care services.
Part 1: approval
This first part of the series will look at how Government subsidised aged care services can be accessed. You will understand the assessments required to determine whether you, or your loved one, is eligible to receive aged care.
Approval
More Australians are using aged care services each year. Whilst it may seem daunting at first, the aged care system has improved significantly over the last few years, with a strong focus on ensuring help and resources are available to help you every step of the way.
You can access aged care services through a non-government subsidised provider of aged care anytime. However, if you wish to access government subsidised aged care, the first step involves an assessment. This assessment will help identify the type of services you may be eligible for.
The assessment process
An assessment will be completed to work out your care needs and identify the type of support you may be eligible for. This is a free service which you can start by calling My Aged Care (the Government service for aged care) on 1800 200 422.
During the call, a client record will be created to register you with My Aged Care. To create this record, you will be asked about your current needs, any aged care services you may already receive and the results of any prior assessments.
They will seek to find out more information about how you are managing around the home, any health concerns you may have, and any support from family or friends you receive. Openness and honesty will ensure they can fully understand your care needs.
ACAT/ACAS or RAS assessment
If you have been referred for an assessment, an assessor will contact you to arrange a time
that suits you best to come and visit you in your home. An assessment is provided by a local assessor from an Aged Care Assessment Team or ACAT. In Victoria, this service is provided by an Aged Care Assessment Service or ACAS. If you have low-level care needs, an assessment may otherwise be provided by a Regional Assessment Service or RAS. To make sure the assessment is effective, there are a few things to prepare before the visit:
- your Medicare number
- a copy of any referrals from your doctor
- any information you already have about aged care services that you may want to discuss with the assessor
- your GP or other health professional’s contact details
- information on any support you currently receive.
If you would like a family member, carer, or friend to be with you during the assessment, just let them know the time and date you have agreed with the assessor.
What happens during the assessment?
The assessor will have a record of all the information you provided during your initial phone call, and will look to increase their understanding of your needs by asking some more questions about:
- what support you already have and if that will continue
- your health and lifestyle, and any health concerns
- if you have problems with your memory
- how you are going with daily tasks and activities around the home
- any issues with home and personal safety.
You can ask questions of your own, such as what services are available and whether there are any service providers in your area.
Working together, you will develop a support plan that includes your strengths, difficulties, goals and preferences for your aged care services.
After the assessment
Your assessment will determine your eligibility to access services at home or in a residential aged care facililty. If you are assessed as eligible to access services, you will receive an approval letter and support plan that sets out the services you are approved to access. If you are not approved to access services, you will receive a letter stating why and who to contact for more help.
Part 2: types of aged care available
This second part of the series will look at the types of aged care available, depending on the outcome of your assessment. From entry-level care at home, to 24-hour support in a residential aged care facility, each stage of support is designed to give you the help and care that you need.
Types of aged care available
After your ACAT/ACAS or RAS assessment (read more about this in our first Aged Care flyer, Part 1: approval), an approval letter will be provided which will identify the type of aged care services you are eligible for.
Commonwealth Home Support Program
You may have been approved for the Commonwealth Home Support Program (CHSP). It is an entry level program for older people who need basic assistance with daily tasks to live independently at home.
You are expected to contribute to the cost of your care if you can afford to. The amount you contribute will depend on your income and the type of services you need. You will need to discuss and agree to any fees with relevant service providers before you receive services.
Types of CHSP services available
The types of services you can receive under a CHSP include:
- Domestic assistance including laundry, cleaning and shopping.
- Home maintenance and modifications.
- Transport to appointments and community activities.
- Nursing and allied health services.
- Day/overnight respite to give you or your carer a break.
Finding a CHSP provider
Visit the Government’s My Aged Care website (www.myagedcare.gov.au) or phone 1800 200 422 to find CHSP service providers in your area. You can access a list of provider contact details to find out whether a particular provider can suit your needs, how much they cost, and how they provide their services.
Home care packages
You may have been approved for a home care package. There are four levels of home care packages available, from providing basic care needs (level 1) to providing high level care needs (level 4).
Whilst there will be a subsidy that the government will pay towards your home care package
(increasing with each package level), you will be expected to contribute to the cost of your care if you can afford to. Visit the Government’s My Aged Care website (www.myagedcare.gov.au) for information on how much you could be expected to pay.
Types of home care services available
The types of services you can receive under a home care package include:
- Domestic assistance including laundry, cleaning and shopping.
- Home maintenance and modifications
- Personal care including showering, toileting and dressing
- Meals and food preparation
- Nursing and allied health services including podiatry and physiotherapy
Finding a home care service provider
Visit the Government’s My Aged Care website (www.myagedcare.gov.au) or phone 1800 200 422 to find home care service providers in your area, based on level of home care package you have been approved for. You can access a list of provider contact details to find out whether a particular provider can suit your needs, how much they cost, and how they provide their services.
Residential aged care
You may have been approved for services in an aged care home. If you decide this is right for you, it will be helpful to visit these homes so you can see for yourself whether it will provide you with the support you want.
As you visit each aged care home, you may want to make a note of what you liked, didn’t like, and whether you would be happy to live there. This will help you decide which home would be most suitable. There may be different fees associated with each home, and these are explained in more detail in our next guide, Part 3: fees and funding.
Types of residential aged care services available
Aged care homes can help you with:
- Accommodation including furnishing, bedding and toiletries.
- Day to day needs including meals, laundry and social activities.
- Personal care including showering, toileting, dressing and mobility.
- Clinical care including nursing, therapy and health management.
Finding an aged care home
Visit the Government’s My Aged Care website (www.myagedcare.gov.au) or phone 1800 200 422 to help you find aged care homes in your area. You can access the contact details of homes plus find a description of their services, costs, and any areas of care speciality they can help with.
Part 3: fees and funding
This third part of the series will look at some of the costs involved in transitioning to permanent residential aged care.
The basic daily fee
Cost: $56.87 per day (as at 1 January 2023)
Amount paid by you in a year: $20,758.
What is it?
The basic daily fee is used to cover the day-to-day expenses such as meals, laundry and cleaning etc. Everybody entering residential aged care is expected to pay this fee.
Usually the aged care home will ask this fee to be paid fortnightly or monthly, and to be paid up to one month in advance.
The basic daily fee is an amount equivalent to 85% of the maximum basic rate of the Age Pension for a single person. As the Age Pension rate indexes twice a year, so will the basic daily fee. Find out more about the basic daily fee at www.myagedcare.gov.au
The means-tested care fee
Cost: Between $0 and $30,574 (capped) a year (as at 1 January 2023)
Generally, if you have financial assets of $224,000 or more you can be asked to pay a means-tested care fee1.
What is it?
The means-tested care fee is a contribution towards day-to-day care costs in an aged care home. The amount payable depends on two components – a combined income and assets assessment and your cost of care. However, there are annual and lifetime caps in place to limit the amount of the means-tested care fee you can be asked to pay.
Accommodation costs
Cost: $0 to $550,000 (refundable accommodation deposit)2
Generally, if you have assets of $186,332 or more when you enter residential aged care you can be asked to pay the advertised accommodation price1.
What is it?
Each residential aged care home has different costs for living there. These can vary significantly depending on the location and status of the home.
You can pay the accommodation costs as a refundable lump sum, referred to as a refundable accommodation deposit (RAD), or in periodic payments, referred to as a daily accommodation payment (DAP). Or a combination of both.
If you pay a RAD, this will be refunded to you or your estate when you leave the aged care home.
The accommodation costs are negotiated between you and the aged care home but cannot exceed the amount advertised by the home on the Government website www.myagedcare.gov.au.
Other costs
Extra service fees
Aged care homes can offer extra service rooms which provide a higher standard of hotel-type services. Extra service fees are attached to the room and have to be paid whether or not you use the services.
Additional service fees
Aged care homes can offer additional hotel-type services which are not attached to the room. Additional service fees only have to be paid where you use the services.
Government assistance
If the value of your assets and income are below the relevant Government thresholds, the cost of your aged care will be further subsidised by the Government. In these cases, some or all of your accommodation costs can be subsidised by the Government and you will only need to pay the basic daily care fee.
Case study
Meet Jane
Jane is 85 and widowed. She was living on her own for some time after her husband passed away but has become frail with age. After researching her options with the help of her family, Jane was assessed by an Aged Care Assessment Team (ACAT) as requiring permanent residential aged care and found a suitable aged care home to move into.
The basic daily fee
This fee is paid by everyone entering residential aged care and is currently $56.87 per day (as at 1 January 2023). Jane will be required to therefore pay $20,758 a year.
The means-tested care fee
Jane has $550,000 invested in term deposits and $5,000 in personal effects. Jane will be required to pay a means-tested care fee of $14,969 a year.
Accommodation costs
Jane’s residential aged care home has an advertised accommodation price of $450,000.
Total fees and costs
Jane will therefore need to fund a total of $485,727 in the first year. This includes $450,000 for her accommodation in the aged care home which she can choose to pay as a refundable lump sum deposit or periodic payments or a combination of both.
How to fund residential aged care
There are many ways to help fund your residential aged care costs. These range from renting or selling the family home, to specialised investment solutions offered by financial service providers.
The best place to start is by having a conversation with a financial adviser. They can help you navigate the complexities of funding aged care, leaving you to focus on finding the right aged care home.
1 Based on rates and thresholds as at 1 January 2023. This asset amount applies to a single and is different for members of a couple.
2 Aged care homes wanting to charge accommodation prices of more than $550,000 as a lump sum must have their prices approved by the Independent Health and Aged Care Pricing Authority.
This case study relates to a hypothetical person, Jane, and is provided for illustrative purposes only.
Source: Challenger Life