Hello, families! At CommonCents Financial Planning, we view money as fuel for dreams, including securing quality aged care for loved ones.
Aged care costs can be complex, but we’re here to break them down.
Here are three ways we help families understand and manage fees, ensuring both the resident and staying spouse are financially secure.
1. Understand Accommodation Payment Options
We guide families through accommodation fees, which include a Refundable Accommodation Deposit (RAD), a Daily Accommodation Payment (DAP), or a combination.
You could think of the RAD as “buying” the room as it is paid as a lump sum. While the DAP could be considered as “renting” the room, as it is paid as a daily sum with interest. The interest rate is set by the Government and currently sits at 7.78%. For example, a $500,000 RAD with $400,000 paid leaves $100,000 to be converted into a DAP of $21.32/day. We help you understand the costs of your chosen facility and work to find the best option for your circumstances.
2. Navigate Care and Additional Fees
We clarify care fees, starting with the basic daily fee, currently $63.82, this fee is paid by all residents.
On top of the basic daily fee, if you have the means, you will be asked to pay a Means-tested care fee. This fee can range from $0 up to $407.33 daily, however, it has an annual cap of $34,311.23 and a lifetime cap of $82,347.13. These caps are indexed March and September each year.
We can assist to complete any Services Australia forms required for them to confirm fees. The only other fee is known as the Additional/Extra services fees this fee is set by the facility and includes extras like hairdressers, premium meals, activities, outings or companions.
3. Plan for Proposed Fee Changes
There are upcoming changes to Aged care fees, effective November 1, 2025. Facilities will retain 2% of the RAD balance annually for five years, reducing refunds back to estates. A new non-clinical care contribution, up to $101.16 daily, replaces the means-tested fee, it will be capped at $130,000 or four years, whichever comes first. A Hotelling Supplement Contribution could also be charged depending on assets and income. Previously government-funded, you could be asked to pay up to $12.55 daily or annually $4,580.75.
We recommend reviewing payment options, verifying service delivery, and planning for fee changes. At CommonCents Financial Planning, we’re here to simplify finances, protecting both your loved one in care and the family at home.
Contact us to explore tools for a secure financial future!
CommonCents Financial Planning can help you navigate the complexities of aged care, from understanding options to managing finances and planning for the future. We can help navigate the emotional complexities of moving a loved one into care, providing reassurance, and offer a listening ear, reducing the feelings of isolation and anxiety.
