Understanding & covering the costs
The amount you have to pay for residential care may depend on the service you choose, your assessable assets and your assessable income.
The total amount payable can be hard to calculate without good advice. Contributions will be divided across:
- daily care fees
- additional services
You need to pay for your accommodation. This is a contribution towards the land, buildings and maintenance. You can choose to pay a lump sum or a daily payment or a combination.
- Refundable Accommodation Deposits (RADs) are paid as a lump sum. Just like buying a house, the amount you pay may depend on the location and the quality of the accommodation.
The amount you pay is fully refunded when you leave, unless you ask for other fees to be deducted from the RAD or you have outstanding fees when you leave.
Repayment is guaranteed by the Federal Government if paid to an accredited aged care service. Ask to see their certificate.
- Daily Accommodation Payments (DAPs) are like paying "rent" or interest on any unpaid RAD.
Daily care fees
You will be asked to contribute towards the cost of your care through:
- Basic daily fee at a rate of 85% of the basic single age pension.
- Means-tested fee is payable if you have income and assets over the specified thresholds. This amount is limited by an annual cap and a lifetime cap.
Additional Service Fees
This is payable for extra services if selected and may be offered as a package or on a user pays basis.
Covering the costs
Your Morgans adviser can explain the fees and calculate an estimate of what you may be asked to pay. They can also undertake a complete review of your full financial situation and develop an appropriate strategy to ensure you can pay for residential care as well as create sufficient cashflow.
Many financial decisions may need to be made including:
- Should the family home be kept, sold or rented?
- Is it best to pay a RAD or DAP for accommodation?
- How is your Centrelink/Veterans' Affair pension affected and can this be improved?
- What are the best investment options for any surplus money?
- How to manage any taxation implications?
- What are the implications to your estate?
Your adviser may recommend strategies to minimise fees or maximise Centrelink or Veterans' Affairs benefits.
For the best outcome involve your adviser early.
Contact the Morgans Aged Care Advice Team on 1800 807 223 or email firstname.lastname@example.org. Alternatively contact your Morgans adviser or your nearest office to find out more.