Residential Care Cost Comparison

How does Home Care compare to the costs of going into Residential Care?

Let’s face it, the majority of people would much rather grow older in the comfort and familiarity of their own home than be moved into a nursing home.

Even the “better” nursing homes pale in comparison to someone’s own home!

Investigating all the options is an important part of arranging support services for a loved one, and the cost of the various options is a significant issue for many people.

When investigating care options for a loved one, it’s important not to underestimate the cost of moving into a nursing home.

In many cases it is far more cost effective for someone to remain in their own home with private support services.

Whilst it is important to seek advice from your financial planner or an aged care finance expert, here are a few issues to consider.

For residence required to pay a Refundable Accommodation Deposit (RAD)
Required Payments Description Amount Comments
RAD/DAP or Combination RAD (Refundable Accommodation Deposit)
This is similar to an interest free loan from the resident to the facility and will be refunded in full or in part when they leave the facility. DAP (Daily Accommodation Payment)
This is the interest payable on any unpaid RAD.
Rad is usually between $350,000 to $800,000+

Ofter to pay a RAD a person may be required to sell their home.

The facility may negotiate the RAD (previously known as a bond) with the resident.

Basic Daily Fee Set at 85% of the single person age pension  $50.66/day This is paid by everyone entering an aged care home and is used to contribute towards your day-to-day living costs such as meals, cleaning, laundry, heating and cooling. Adjusted twice annually in line with the age pension.
Means Tested Care Fee  This is the amount that the resident is asked to contribute according to assets and income calculations. To be calculated by Centrelink (Up to a maximum of $214.06 per day).  Annual and lifetime Cap applies to these payments ($27,232.00 per year and $65,358.00 for the lifetime cap).
Extra and /or Optional Services Fee  Additional fees charged by some facilities for higher standard accommodation or additional services  Not all facilities charge this. But if charged generally between $10.00/day and $80/day.

An extra service fee is generally for a higher standard or accommodation.

Optional services may include things such as hairdressing, Foxtel and personal interest activities.

Not all facilities charge an additional service fee

The information contained in this website is provided as an information service only and does not constitute financial services advice. None of the information provided takes into account your personal objectives, financial situation or needs. You must determine whether the information is appropriate in terms of your particular circumstances, and Prestige would encourage you to seek your own current financial planning advice with regard to Residential Aged Care costs.