Few parts of choosing aged care cause more worry than the cost. The language alone, with its RADs and DAPs and means assessments, can be enough to make your head spin. This guide explains the main fees clearly, so you can approach the conversation with confidence.
Aged care fees in Australia are made up of a few separate parts. It helps to take them one at a time.
1. The basic daily fee
Everyone in residential aged care pays a basic daily fee. It goes towards everyday living costs such as meals, laundry, cleaning and heating. It is set by the Australian Government as a percentage of the age pension, so it changes when the pension does. Because it is standard, it is the simplest part to understand.
2. The means-tested care fee
This is an extra contribution towards the cost of care that some people pay, depending on their income and assets. A means assessment through Services Australia or the Department of Veterans’ Affairs works out whether it applies and how much it is. There are annual and lifetime caps that limit how much anyone pays over time.
3. Accommodation costs: the RAD and the DAP
This is the part that confuses families most, and it is really quite simple once you see it.
The cost of a resident’s room can be paid in one of three ways:
- A RAD (refundable accommodation deposit) is a lump sum. Think of it like a fully refundable bond. When the resident leaves, the balance is returned to them or their estate, less anything you have agreed can be drawn from it. It is guaranteed by the Government.
- A DAP (daily accommodation payment) is the same accommodation cost paid as a regular daily amount instead of a lump sum, a bit like rent. Nothing is refunded because nothing is held as a deposit.
- A combination of the two lets you pay part as a lump sum and the rest as a daily payment, in whatever split suits you.
There is no single right answer. The best choice depends on your savings, your home, and what gives the family the most peace of mind. Many families talk it through with a financial adviser.
What a home actually costs
Accommodation prices vary by home and by room type, and what an individual pays is shaped by their means assessment. For that reason, the clearest figures always come from a direct conversation. At The Willows, accommodation costs are government-regulated and based on room size, and we are happy to walk you through the current numbers plainly, with no pressure.
A sensible first step
The single most useful thing you can do early is complete the means assessment with Services Australia or the DVA. Knowing your assessed position takes much of the uncertainty out of the decision and lets you compare homes on a like-for-like basis.
If you would like the fees for a particular home explained without jargon, just ask. At The Willows in Ashfield, that conversation is part of how we welcome every family. The kettle is on.
