Understanding Nursing Home Costs

If you or a loved one is considering nursing home costs it is important that you fully understand what you are paying for and where your money is going. While a lot of people may think of it as a very stressful time, it isn’t that hard to understand.

To help you understand nursing home costs, we are going to cover the four main areas that you will have to end up paying.

 

Daily fees

When you are living at an aged care facility the residents have to put forward a fee that goes towards paying for their daily living expenses. From such this nursing home costs is referred to as the basic daily fee and covers some of the following areas:

  • Food
  • Cleaning (of both the facility and your room)
  • Laundry washing and folding services
  • Cooling and heating
  • Personal care
  • Daily living assistance
  • Pharmaceutical and medical services

The nursing home cost for this category is reviewed by the Australian government twice every year in March and September. As of September 20th 2018, the maximum daily fee an individual can be charged is $50.66 a day.

 

Accommodation payment

Another nursing home cost is your payment towards the accommodation. This mainly depends upon your assets and the extra services and facilities that you require when you are living at these places. It is important to note as well that if you have less than $48,500 in assets or income you won’t be asked to pay an accommodation payment.

Those who do have over this amount are required to pay a small fee but they can decide how they pay it. For example there is a refundable amount you can pay when you enter the facility. It is mostly refundable where a portion of it can be left to your estate when you pass or decide to leave the facility.

Another option is a daily accommodation payment where you will pay per day that you are living at the facility. This nursing home cost is not refundable and won’t be paid out to you or your estate when you decide to leave the establishment.

The final option is a combination of the two which ultimately comes down to the personal preferences of the individual involved. The method in which you pay this type of fee is decided upon when you initially enter into the establishment but can be changed within the first 28 days of your arrival.

 

Means-tested payments

old woman talking to someone over the phone

A means test will take a look at your assets to determine how much you can contribute to your care. Depending on how much you earn or have stowed away, you may be asked to pay to help subsidise the cost of your care.

Currently there is a price cap to this type of nursing home cost which as of July 1st 2018 is just under $27,000. Keep in mind that your payment may differ when your assets change in scenarios such as the housing or financial market.

Regardless of your assets and the change in the economic climate, you will never be asked to pay more than the cap previously stated.

 

Extra service fees

The final payment that you will need to understand is the extra service fees. These payments are targeted at people who want a bit more luxurious amenities during their stay. If you decide to have a higher end room or facility you may have to pay these fees as well.

Some examples of extra services include but aren’t limited to;

  • Beside phone
  • Extra large room
  • Extra large bed
  • Internet access
  • Special drinks such as spirits and wines