What costs are involved in receiving aged care?

In Plain English

Based on the provided information, here's a breakdown of the costs involved in receiving aged care:

Resident fees: These are fees charged to someone receiving residential care. The maximum daily amount is calculated using a formula that considers a standard resident contribution (85% of the basic age pension), compensation payments, means-tested care fees, hardship supplements, and extra service fees (if applicable).
Home care fees: These are fees charged to someone receiving home care. The maximum daily amount is calculated using a basic daily care fee (17.5% of the basic age pension), compensation payment fees, income-tested care fees, hardship supplements, and other agreed amounts.
Accommodation payments/contributions: If you're in residential care, you might need to pay for your accommodation. This can be done through an accommodation payment or contribution.
Assurance Activities: The average provider would pay between $5175 and $9500 for assurance opinion. An average of $7,555 per provider will be used.

Additionally, the government provides subsidies to help cover the costs of aged care. The amount of subsidy a provider receives can be affected by things like the care recipient's income and assets, and the type of care they are receiving.

Detailed explanation

The costs associated with receiving aged care are governed by the Aged Care Act 2024 and the Aged Care (Living Longer Living Better) Act 2013, with further details outlined in the Aged Care Rules 2025. These costs can be broadly categorized into resident fees, home care fees, and accommodation payments/contributions.

1. Resident Fees (Residential Care):

As per section 52C of the Aged Care (Living Longer Living Better) Act 2013, resident fees are charged to care recipients receiving residential care.
Section 52C-3 outlines the calculation of the maximum daily amount of resident fees, incorporating:
- The standard resident contribution, as defined in section 52C-4, is generally 85% of the basic age pension amount.
- Compensation payment fees (section 44-20 and 44-20A of the Aged Care (Living Longer Living Better) Act 2013).
- Means-tested care fees (section 44-21 and 44-23 of the Aged Care (Living Longer Living Better) Act 2013).
- Hardship supplements (section 44-30 of the Aged Care (Living Longer Living Better) Act 2013).
- Extra service fees (if the place has extra service status).
Section 52C-5 addresses fees for reserving a place when a care recipient is absent.

2. Home Care Fees (Home Care):

Section 52D-1 of the Aged Care (Living Longer Living Better) Act 2013 defines home care fees as those charged for home care services.
Section 52D-2 details the calculation of the maximum daily amount of home care fees, using:
- The basic daily care fee, as defined in section 52D-3, is generally 17.5% of the basic age pension amount.
- Compensation payment fees (sections 48-5 and 48-6 of the Aged Care (Living Longer Living Better) Act 2013).
- Income-tested care fees (sections 48-7 and 48-8 of the Aged Care (Living Longer Living Better) Act 2013).
- Hardship supplements (section 48-10 of the Aged Care (Living Longer Living Better) Act 2013).
- Other amounts agreed upon between the care recipient and the approved provider.

3. Accommodation Payments and Contributions (Residential Care):

Division 52E of the Aged Care (Living Longer Living Better) Act 2013 introduces accommodation payments and contributions for residential care.
Part 4 of the Aged Care Act 2024 also deals with accommodation payments and contributions.

4. Government Subsidies:

The government provides subsidies to approved providers to help cover the costs of aged care.
Section 242A of the Aged Care Act 2024 outlines eligibility requirements for subsidies for individuals in prescribed classes receiving residential care.
Section 241 of the Aged Care Act 2024 explains how the provider-based subsidy reduction is calculated, taking into account the daily means-tested amount, accommodation and hotelling supplements, and non-clinical care contributions.

5. Assurance Activities:

The average provider would pay between $5175 and $9500 for assurance opinion. An average of $7,555 per provider will be used as stated in [Chunk 580] of the Aged Care Rules 2025.

Important Considerations:

The Aged Care Rules 2025 prescribe various matters related to fees and payments, including accommodation bonds, accommodation charges, and entry contributions.
The means-tested amount (section 44-22 of the Aged Care (Living Longer Living Better) Act 2013) considers both income and assets in determining the level of government subsidy.
The Aged Care Act 2024 allows for fees and contributions for individuals in prescribed classes (section 285A) and under specialist aged care programs (section 286).

This information provides a general overview. Specific costs will vary depending on individual circumstances, the type of care received, and the provider.