It costs too much? How do we afford that? What does that mean?
Entering yourself and or a loved one into care is an emotional and stressful time without adding in the need to understand Australia’s complex aged care cost structure. The structure involves several related costs with need to be navigated by you or your loved ones to work out the best way to fund costs. Before you start making decisions getting a basic understanding of the cost structure and basic terms is essential.
To help you get started below is a basic overview of the different costs and what they cover:
Like purchasing a home, when entering care, you have options:
Refundable Accommodation Deposit (RAD): This is a lump sum upfront payment like making a deposit for a home, you can pay the full or a partial amount. When you leave, you get this money back.
Daily Accommodation Payment (DAP): This is like renting or paying a loan for your room if you do not make a lump sum payment (RAD).
Combo Payment: You can mix choose to make a part lump sum payments and part ongoing payment, this all depending on what suits you and your ongoing living requirements.
Daily Living and Care Costs
Basic Daily Fee: This is base payment made by all residents, it partially funds your daily care and basic cost of living expenses (Power, food, cleaning etc). This cost is set at 85% of the maximum single age pension.
Means-Tested Care Fee: This similar to the age pension is assessed based on your income and assets. The government reviews your assets and income to determine if and how much you can contribute to your care.
Extra Services and Other Costs: Some places offer extra things you can choose, like a fancier room, pay tv or special services which cost extra. The other is your other living expenses such as clothing, pharmaceuticals, hair dressing etc.
These costs and best options to fund them change for each person, and it might be a little tricky to understand. To find out more about each of these costs and how you can go about funding them, you can join us at our live seminar and webinar. Alternatively, you can book a free appointment with one of our advisers to discuss your needs via the form below.
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