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Understanding the complexities of aged care funding can be overwhelming. It’s hard to know how much you’re expected to contribute and what the government will subsidize. In this article, we’ll walk you through  the basics  of aged care costs for both In-Home and Residential care.

In-Home Care

There are two different cost structures that apply to in-home care.

Commonwealth Home Support Programme

The Commonwealth Home Support Programme (CHSP) is an entry level help program for in-home care. It’s worth noting that in Victoria these services used to be managed by the local councils.

Who is it for?

It’s designed for people who are still managing reasonably well but may need a little help around the house. The CHSP is a good starting point for in-home care. It includes services such as cleaning and doing your weekly grocery shop.

What are the fees?

Understanding the fees for CHSP doesn’t have to be complicated. It’s all based on the services you choose to use and is not related to your income. You’ll be assessed for a range of services to best suit your current needs. Each service attracts a fee and the government will offer subsidies on these fees according to your Age Pension.

Home Care Packages

Home Care Packages support more complex models of in-home care. The government contributes a subsidy towards the package and you co-contribute funds to the package based on your income and what you can afford. The more you have put into the package, the greater number of services that will be available to you.

Who is it for?

Home Care Packages are for people with higher level in-home care needs.

What are the fees?

There are two fees your Home Care Package provider may ask you to pay. The first is a basic daily fee to cover the provision of your chosen services. The second is an additional care fee which will be based on your income.

1) Basic daily fee

Providers can ask that the basic daily fee be paid as part of a Home Care Package. This fee is based on a percentage of your Age Pension — currently calculated at 17.5%.  If you’re a couple, this fee will apply to each of you. Note, this basic daily fee can increase up to twice a year in line with changes to the pension. Typically, this is a fairly small increase, but it’s worth keeping in mind when planning your budget.

2) Income-tested care fee

The Department of Human Services will assess your income and determine whether you’ll be asked to pay this additional fee.  You won’t have to pay this fee if you’re a full pensioner.  If you are part of a couple the income-tested care fee payable is determined by halving your combined income, regardless of who earned the income.

There are annual and lifetime caps placed on this fee and once these caps are reached, you won’t have to pay any more. You can find the exact thresholds on the Department of Health website.

Which is right for me?

My Aged Care will assess you and decide your eligibility for the two options based on your level of needs. If you only need a help with basic tasks or a hand around the house, then the CHSP is the right choice for you. When your needs become more complex, it may be time to upgrade to a Home Care Package.

To get a basic idea of the cost of in-home care, use My Aged Care‘s home care fee estimator.  If you’re after a more tailored estimate, chat to the experts here at Care Guidance.

Residential Care

There are four main fees to be aware of when considering the cost of residential care.

1. Basic daily fee

This fee covers the basics — including meals, cleaning, laundry and personal assistance. The maximum daily fee for a permanent resident is calculated at 85% of your annual Age Pension.

2. Means-tested care fee

If you can afford to contribute more to your care, you’ll be asked to pay a means-tested care fee. The Department of Human Services will assess your income and assets to establish whether this fee applies to you. If it does, they’ll advise how much you need to contribute.

Keep in mind this fee is tied to your assets and income so expect it to go up or down based on everything from the share market to property prices. But don’t worry, this fee is regulated by both annual and lifetime caps.

3.  Accommodation costs

A few things affect what you’ll pay in accommodation costs. The first is your personal choices, from your chosen room type to your chosen home’s location and how modern the facility is. Another factor is your income and assets and you may be asked to contribute an accommodation payment. The Department of Human Services will tell you if this applies to you once they’ve assessed your finances.

4. Extra service fees

Looking for a little luxury? You can pay extra fees for extra special services, such as Wi-Fi, Foxtel or beauty treatments.   Your aged care provider will give you a list of these services available and the associated fees.

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Financial Hardship Assistance

If your circumstances warrant it, the government will pay some or all your costs.  For more information, or to find out if you’re eligible, visit My Aged Care.

How do I apply?

Complete and lodge the application form for financial hardship assistance with the Department of Human Services. Note, there are separate forms for Home Care Packages and aged care homes.

Need advice?

If you need more information, My Aged Care is a good place to start. Or if you’d like to speak to one of our friendly experts at Care Guidance, you can reach us on 1300 442 383 for an obligation-free chat.