Getting older can be worrying for various reasons – including your home, your health, your family and your finances. And for many people, financial worries are the biggest source of stress and anxiety.
If money is a stressor for you, you’re probably concerned about your future, especially if you see a move into aged care on the horizon. Life in an aged care facility comes with certain non-negotiable costs, but what happens if you need care but simply can’t afford to pay the associated costs? Read on to find out what happens when you can’t afford aged care.
What does it cost to live in an aged care facility?
First, let’s look at the cost of aged care residence. You’ll need to pay for all the accommodation and services that you access, and certain fees will apply for every day you spend in your new aged care home. These fees cover different facets of your accommodation costs, and will include:
A basic, daily care fee
What it covers: All your living costs, including meals, laundry, cleaning, power usage and facilities management.
Who must pay it: Everyone accessing aged care must pay this fee directly to the aged are facility, either from your personal account or straight from your pension.
A means-tested care fee
What it covers: This fee is a contribution towards the cost of your personal and clinical care.
Who must pay it: Anyone who has income and assets over a certain amount.
Accommodation costs
What it covers: The cost of accommodation in your room at the aged care facility.
Who must pay it: Anyone who has income and assets over a certain amount.
Extra services fees
What it covers: A higher standard of accommodation than the norm, or additional services that are above and beyond your assessed care needs.
Who must pay it: Those choosing to access extra services.
How much will I be expected to pay?
While aged care costs are subsidised by the Australian Government, you will be expected to contribute to the cost of aged care accommodation if you can afford to. However, the subsidies go a long way to making aged care affordable for everyone, and each permanent aged care resident can expect to receive around $65,000 per year. The amount increases each year and is paid directly to your aged care facility. Any costs over and above the subsidy amount will need to be met by you.
What if I can’t afford to pay aged care fees?
That sounds a little intimidating, especially if you can’t afford to pay these fees. So, what do you do if you simply can’t afford to pay them?
The good news is that you won’t be required to pay all these fees if you’re not capable of doing so.
- The basic daily care fee may be paid straight from your pension – and for some people, this will be the only fee that they pay.
- The means-tested care fee will only apply if you have income and assets over a certain amount; otherwise you won’t need to pay it.
- The extra service fees won’t apply for most people, as you can choose whether to opt for the extra or higher level services or not.
- Your accommodation costs may be paid by the Australian Government in full or in part, depending on your income and assets. In fact, there are three options for payment of your accommodation fees:
- No accommodation costs if your income and assets are below a certain amount, as the Australian Government will pay these costs.
- An accommodation contribution, where you pay for part of your accommodation costs and the Australian Government pays the rest.
- An accommodation payment, where you pay the full cost for your accommodation.
What other assistance can the government provide?
For veterans, the news gets even better. The Department of Veteran’s Affairs (DVA) will pay the basic daily fee for eligible Victoria Cross (VC) recipients or former Prisoners of War (POW), plus you will be exempt from paying the means-tested care fee.
The Government will also provide a number of different types of financial assistance:
- The Aged Pension
- Disability Support Pension (assists people with a permanent physical, intellectual or psychiatric condition that stops them from working)
- Pension Loans Scheme (a voluntary non-taxable fortnightly reverse mortgage loan for people owning real estate in Australia)
- Mobility Allowance (aids people who need to travel for particular activities but who are not able to use public transport alone due to an injury, illness or disability)
Financial hardship assistance, where the Australian Government will pay some or all of your fees and costs, is also available – find out more here.
You may also be able to access concession cards and rent assistance through Services Australia.
How will my income be assessed?
To determine whether you need to pay the means-tested care fee or not, your income and assets will be assessed by Services Australia.
To apply for your income and assets assessment, you need to complete the Permanent Residential Aged Care Request for a Combined Assets and Income Assessment (SA457) form. This is available from Services Australia by calling 1800 227 475 or downloading a copy from the website. Once you have submitted this form, it will take at least two weeks to receive information about your fees, so start the process as soon as possible. You won’t be eligible for government assistance unless you complete this assessment.
The assessment will outline the maximum fees you will be asked to pay, including the basic daily fee, the means-tested care fee and the accommodation contribution, if applicable.
You can also get an estimate of your likely fees by using the aged care homes Fee Estimator on the My Aged Care website.
Where can I get further help?
Visit the My Aged Care website to find out more about accommodation costs charged by individual service providers.
You can also access the DHS Financial Information Services, which provides free confidential support and basic information about managing your finances. Call 132 300 and say ‘financial information service’ when prompted.
So, any Australian resident, regardless of their financial situation can access the aged care services they need. And that should put your mind at rest.
Get in contact with Finley Regional Care to find out about our costs and fees or click here to find out more.
