The fees associated with aged care such as nursing homes or retirement homes will largely depend on the facility chosen, individual assets and income, and the level of care required.

The Australian Government pays for the cost of nursing home care by giving funding to some government funded care homes. Older people in Australia in need of care and assistance have a range of options available to them both in the form of residential and home-based care, which is provided by not-for-profit (religious, charitable and community groups), private sector operators and governments. The not-for-profit sector provides approximately 65 percent of the county’s residential aged care services, with the balance provided by the private sector and governments.

Types of nursing home fees

There are different types of fees that a resident of a residential aged care home – nursing home or hostel – may be asked to pay. Daily fees consist of a basic daily fee for all residents, plus an additional income tested amount for residents who have income over a certain amount. You can be asked to pay an accommodation payment (either an accommodation bond or an accommodation charge) depending on your assets. If you enter low level (hostel) care, the accommodation payment you may be asked to pay is an accommodation bond. If you enter high level (nursing home) care, you may be asked to pay an accommodation charge. An accommodation bond is usually paid when a resident permanently enters a low care or extra services high care aged care home. The accommodation bond is an interest free loan from the resident to the aged care provider. The interest earned from the accommodation bond monies is used by the aged care provider to maintain their current building or to build new aged care homes for future residents.

Breaking down the dollars and cents

Nursing homes and hostels that provide high-care beds receive just $32 a day for accommodation costs. But a report commissioned by a group of industry peak bodies and providers suggests the capital cost for nursing homes is at least $73 per bed. The separate cost of providing care is $144 each day leading to an overall funding shortfall of up to $62 per bed per day. All residents in aged care, including respite residents, can be asked to pay a basic daily fee as a contribution towards accommodation costs and living expenses, like meals, cleaning, laundry, heating and cooling. The maximum basic daily fee for most permanent residents who first enter an aged care home on or after 1 July 2012 is 85 percent of the annual single basic age pension. This is also the maximum fee for all respite residents, excluding those receiving respite care on an extra service basis.

Qualities of a good nursing home

• Respect: Residents are treated with respect, no matter what their physical or mental condition may be
• Activities: There should be a variety of social, physical and educational activities available that will appeal to all residents
• Home-like: Every effort should be made to keep the nursing facility homelike and comfortable for the residents
• Transparency: Families and potential residents should encouraged to drop in anytime (within reason) to see there is nothing to hide

Aged care services such as nursing homes are regulated quite strictly and the system can be complicated. When making enquiries, a good place to start is the federal Department of Health and Ageing website for a visit to the ‘Fees and Charges’ section, where you will find an up to date breakdown of the fees involved. Just be careful that you inquire fully about all the types of fees and bonds that may be involved.