Aged Care Funding Changes Explained in Plain English (Part 1)

Jun 17, 2022 | Blog, Finances | 0 comments

Part 1: Changes to Residential Aged Care Funding

The Australian government has made significant changes to the way aged care is funded beginning July 1, 2014. In this three-part series, we explain the changes and how they may affect you and your loved ones.
This first article addresses changes to the way new aged care residents will pay for residential aged care. These changes will not affect any existing arrangements for those in residential aged care on or before June 30th.
There are three major changes that are important to understand:

  1. There will no longer be a distinction between high care and low care. No matter the level of care required, the same funding is available.
  2. Residential facilities must now clearly advertise and publish pricing for accommodation including key features of each type of accommodation they are offering. There can be no hidden charges or fees.
  3. New residents will have a choice to pay their fees as a lump sum refundable deposit (similar to an accommodation bond) also known as a Residential Accommodation Deposit (RAD)*, a periodic payment also known as a Daily Accommodation Payment (DAP) or a combination of both. After moving into a facility, a new resident has 28 days to decide which type of payment they prefer.

There are complex calculations that determine an individual’s funding. These are based on the resident’s income and asset levels. It is important to get professional financial advice before committing to a particular funding method. This financial advice will also give you appropriate recommendations on how to structure your affairs to maximise government support through pension, and aged care funding.
No matter the fee structure you select, be sure to shop around for the facility that best suits your individual needs. Support from family members is critical in this time of transition and decision-making.
Keep in mind that price is not necessarily an indicator of quality. Fancy brochures indicate only how much a facility spends on marketing. Spend time in a facility and get to know the staff. Ask as many questions as possible. For more information on choosing the right facility for you, see The Insiders Guide to: Facility Inspection Tours.
Stay tuned for Part 2 in this series that will explore, in detail, the fees and charges you will be liable to pay for residential care, what counts as assets and income for means testing purposes and the caps in value of a residents former home.
* Any facility that wishes to charge more than a lump sum amount of $550,000 for accommodation will need federal government approval.

Visit the largest aged care reviews website at to find helpful reviews of facilities near you.

Aged care is an important and necessary service, but it’s crucial that the right decisions are made when it comes to choosing a facility for your loved one. Aged Care Decisions provides assistance to families at every stage of the aged care or home care journey. We work with over 1200 facilities and assist over 6000 families every month, 100% free of charge.

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