What is an accommodation charge?
You may be asked to pay an accommodation charge if you enter a high care facility as a permanent resident. The charge is a daily payment in addition to the daily fee and income-tested fee (if applicable). It is a contribution to the cost of your accommodation and is used to maintain and upgrade the facility.
Only facilities that have received certification can apply an accommodation charge. Certification means that the facility has met Australian Government standards for the quality of the accommodation. This certificate must be produced by a facility upon request.
How much will I pay?
The amount of the accommodation charge is based upon assets you may have over $40,500. See the accommodation charge table (right column). If you have a partner/spouse, half of your combined assets are counted.
The home is excluded as an asset if your spouse/partner or dependent child is still living there. It is also excluded if:
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your carer has been living there for at least two years or a close relative has been living there for five years AND
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either were receiving or were eligible for an income support payment at the time of the assets assessment or the day you enter care (whichever is earlier). Note that the Carer Allowance is NOT classified as an income support payment.
Accommodation charges are capped at first entry to a high care facility, even if a resident moves from one facility to another, provided that there is not a break in care of more than 28 days (excluding leave).
What if I can't pay an accommodation charge?
If you have less than $40,500 in assets you cannot be asked to pay an accommodation charge. Facilities receive a higher government subsidy for residents who cannot pay the charge.They are considered to be fully supported residents. A partially supported resident has assets of between $40,500 and $108,266.40.
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Accommodation charge for new residents who enter aged care facilities from 20 March 2011 (applies for duration of residents’ stay)
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If assets at entry less than $40,500
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n/a
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If assets at entry between $40,500 and $108, 266.40
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calculated on a sliding scale, between $1 and a maximum $32.58/day
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If assets at entry at least $108,266.40
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$32.58/day
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How are my assets assessed?
Centrelink and the Department of Veterans Affairs (DVA) assess assets of new residents entering residential aged care.
It is not compulsory to have an assets assessment. This assessment is to check your eligibility to receive government assistance. If you decide not to have an assessment you can be asked to pay the maximum amount of accommodation charge.
You will need to complete the form Request for an Assets Assessment and submit it to Centrelink or DVA. You can do this anytime after you have been approved by the Aged Care Assessment Team (ACAT) for residential aged care. The ACAT can provide copies of the form. If you need assistance to complete the form, contact:
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If you receive a Centrelink payment OR do not receive any support payment
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Centrelink, tel. 1800 227 475 (free call)
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If you receive a DVA payment
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DVA, tel. 13 3254 (local call cost); 1800 555 254 (free call country callers)
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Notification of the outcome of your assessment will be sent to you, which you may choose to pass on to an aged care provider.
What if I get rental income from my home?
You may choose to rent your former home to pay the accommodation charge. If the charge is paid from rent, all rent earned will be exempt for the pension income test and for calculating daily fees. The value of the home will also be exempt for the pension assets test.
Centrelink’s free Financial Information Service (FIS) can provide financial information about these options. Contact FIS, tel. 13 2300 (local call cost).
Can I defer payment of my accommodation charge?
You can agree with the service provider to defer the payment or pay it from your estate. The facility is entitled to charge interest at double the lowest pension deeming rate if you defer payment. This equates to 6% for new residents from 1 January 2012 to 31 March 2012 and 5% for all new residents from 20 March 2012 to 30 June 2012.
Accommodation charge agreements
All residents due to pay an accommodation charge will be required to enter into an accommodation charge agreement within 21 days of entering the facility. This agreement outlines the terms and conditions of the accommodation charge and may be included as part of the resident agreement all residents are required to complete.
What if I move from a low care facility to a high care facility?
If you have paid a bond to enter into low care and move to another facility as a high care resident within 28 days, you have two options. With the agreement of the facility, you may either:
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Have the balance of the bond refunded (less retention amounts) and (if liable) pay an accommodation charge; or
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Transfer the balance of the bond to the new facility. In this case, only the balance, if any, of the 5 year retention period will carry over to the new facility.
Hardship provisions
If payment of the accommodation charge will cause undue financial hardship, you may apply for assistance. Contact the Department of Health and Ageing, tel. 1800 052 222 (free call) and request the form Aged Care Application for Financial Assistance.
Extra-services facilities
Some facilities provide extra services. This means that the facility offers a higher standard of accommodation, food or services. It does not mean that a higher standard of care is provided.
If you enter high level care in an ‘extra-service’ place you may be charged an accommodation bond rather than an accommodation charge. Accommodation bonds usually apply to low level care only.
The accommodation bond differs from the accommodation charge in that it can be paid as a lump sum. The facility is allowed to retain a portion of the bond each year for the first five years as well as the interest earned. The accommodation bond may also be paid in periodic payments.
