The amount you can be asked to pay for your accommodation is based on your income and assets, and will be one of the following:
- No accommodation costs: if your income and assets are below a certain amount, the Australian Government will pay your accommodation costs.
- An 'accommodation contribution': if you need to pay for part of your accommodation, the Australian Government will pay the rest.
- An 'accommodation payment': if you need to pay for the full cost of your accommodation.
The Department of Human Services will advise which applies to you.
If you have been asked to make an accommodation contribution, the amount will be advised by the Department of Human Services and you can choose to pay:
- a lump-sum 'refundable accommodation contribution'
- rental-style payments called a 'daily accommodation contribution' or
- a combination of both.
If you have been asked to make an accommodation payment, you will need to agree the amount directly with your aged care home before you move in and you can choose to pay:
- a lump-sum 'refundable accommodation deposit'
- rental-style payments called a 'daily accommodation payment' or
- a combination of both.
You have 28 days from the day you move into the home to decide which payment method you prefer. You must pay your accommodation costs by the rental-style payment method until you decide on how you want to pay for your accommodation.
Refundable accommodation contribution (RAC) or Refundable accommodation deposit (RAD)
- If you are eligible for assistance with your accommodation costs from the Australian Government, this lump-sum is called a ‘refundable accommodation contribution (RAC)’.
- If you need to pay for the full cost of your accommodation and make your payment as a lump sum, this is called a ‘refundable accommodation deposit’.
- A 'refundable accommodation deposit (RAD)' works like an interest-free loan to an aged care home.
- If you choose this method of payment within 28 days of entering an aged care home, you have six months after you enter the aged care home to pay the lump sum amount.
- The balance of the deposit is refunded (to you or your estate) when you leave the aged care home, less any amounts agreed to be taken out. Any deductions, such as extra services or care fees, must first have been agreed with you in writing and listed in the resident or accommodation agreement.
Daily accommodation contribution (DAC) or Daily accommodation payment (DAP)
- If you are eligible for assistance with your accommodation costs from the Australian Government, this rental-style payment is called a ‘daily accommodation contribution (DAC)’.
- If you need to pay for the full cost of your accommodation and make rental-style payments, this is called a ‘daily accommodation payment (DAP)’.
- The amount you pay is a daily rate.
- You can pay instalments up to a month in advance, as agreed with your aged care home.
- Daily accommodation payments and contributions, unless you have paid in advance, are not refundable if you leave the aged care home.
Combination of both
- You can choose to pay for your accommodation as a part lump-sum ‘refundable accommodation contribution’ or ‘refundable accommodation deposit’ and part rental-style payment known as ‘daily accommodation contribution’ or ‘daily accommodation payments’.
- If you choose this approach, there is the option to have your rental-style daily accommodation contribution or daily accommodation payment taken out of your lump-sum refundable accommodation contribution or refundable accommodation deposit.
- This will mean that the total amount in your refundable accommodation contribution or accommodation contribution deposit will be reduced over time as your daily accommodation contribution or accommodation contribution payment is taken out.
- As your refundable accommodation contribution or accommodation contribution deposit reduces, your provider may ask you to top up your refundable accommodation contribution or refundable accommodation deposit to pay a higher daily accommodation contribution or accommodation contribution payment to compensate for the reduced lump-sum.
- If you choose to pay part or all of your accommodation costs as a lump-sum, there is a minimum amount of net assets that you must be left with after paying the lump-sum amount.
- This means that depending on your income and assets, you may not be able to pay by lump-sum in total, but you may be able to pay a combination lump-sum and daily amounts.
Changes to accommodation contributions
The amount of contribution you may be asked to pay to your aged care home can vary depending on the assessment of your income and assets as well as some conditions the aged care home needs to meet.
Your accommodation contribution will never be more than you are eligible to pay based on the assessment of your income and assets and is capped at the maximum accommodation supplement amount.
The Department of Human Services will let you know if there are any changes.
Seek financial advice
You may want to talk to a financial adviser before you make a decision. There are many resources to get appropriate financial advice or to help you research options that work best for you. For example, choosing a particular payment method may affect your pension, if you receive one.