From 1 November 2025, the Australian Government introduced a new aged care funding framework under the Aged Care Act 2024. These changes apply to all new residents entering care from this date and set clear limits on government fees and provider charges.
Please don't hesitate to speak directly to our Community Liaison Officer for any further assistance. It is important to us that you understand all your financial rights and responsibilities before deciding to make Illawarra Diggers your new home.
An important note to low-means persons.
If you have low income or no income other than the pension, or low assets, you are totally welcome at Illawarra Diggers. We specifically maintain a minimum number of places for low-means residents.
(Refer to "Information Guide for Residents with Low means").
FEES AND COSTS
- Basic Daily Care Fee (Government fee)
- Hotelling Contribution (Government fee)
- Non-clinical care contribution (Government Fee)
- One for Accommodation (Payments or Contributions)
- Higher Every Day Living Fee
Accommodation Payments and Contributions
In addition to fees, residents with sufficient assets and income will be asked to pay either an Accommodation Payment or an Accommodation Contribution. Residents cannot be asked to pay both.
The Accommodation Payment will be the Agreed price to the Agreed Room and detailed in a Pre-Admission Agreement to be completed and signed before entry into care. You will then have 28 days to elect whether you want to pay the Accommodation Payment as:
- Refundable Accommodation Deposit,
- Daily Accommodation Payments, or
- A combination of the two.
Persons with lower assets and income may be assessed as "low-means residents" by the government. If you are assessed as a low-means resident, you will be asked to pay an Accommodation Contribution that is an amount set by the Government.
You may pay the Accommodation Contribution as either a Daily Contribution or a part Daily Contribution and part Refundable Contribution (lump sum).
If you make no choice, then a Daily Accommodation Payment or Daily Accommodation Contribution continues to be payable from your date of entry.
Persons with very low assets and income may be determined by the government to have no Accommodation Contribution payable.
Daily Payments and Daily Contributions
Residents may elect to pay a Daily Accommodation Payment in lieu of part or all of a Refundable Accommodation Deposit. The Resident can ask for the Daily Accommodation Payments calculated on the unpaid portion of the Accommodation Payment to be withdrawn from any Refundable Deposit paid.
REFUNDABLE ACCOMMODATION DEPOSIT & REFUNDABLE ACCOMMODATION CONTRIBUTION
You must be left with a minimum of $61,500.00 of assets after paying your Accommodation Payment partly or fully by Refundable Accommodation Deposit or your Accommodation Contribution partly by Refundable Accommodation Contribution.
If your spouse remains in your home, the home is excluded from the assets test.
If you have had a carer living with you for two years or more and also on an Australian Government benefit or pension, your home is excluded from the assets test.
If you have had a close relative living with you for five years or more, and who is on an Australian Government benefit or pension, your home is excluded from the assets test.
It is a requirement of Illawarra Diggers that no repayment of any part of the Refundable Accommodation Deposit or Refundable Accommodation Contribution will be made to any representative of any deceased resident before a copy of a Grant of Probate or Letters of Administration in respect of the resident's estate is received by us.
PART PAYMENT OR DEPOSITS
Residents may pay a part-payment or a deposit on the Accommodation Payment amount from their date of entry (but not before). A deposit of 10% or 15% is common. By doing this, the interest payable (Daily Payment) on the outstanding Accommodation Payment will be lower. Any Daily Payments can also be withdrawn from this part-payment or deposit.
WITHDRAWING DAILY PAYMENTS FROM REFUNDABLE DEPOSITS
Residents can ask for their Daily Payments calculated on the unpaid portion of their Accommodation Payment to be withdrawn from any Refundable Accommodation Deposit paid. Withdrawing Daily Payments from the Refundable Accommodation Deposit will reduce the Refundable Accommodation Deposit Balance and increase the unpaid portion of the Accommodation Payment, resulting in a higher Daily Payment Options.
TAX REBATEABILITY
The medical expenditure rebate may be available on all your expenditure in excess of a specified amount on basic fees, means-tested care fees and accommodation payments paid as daily payments.
This rebate is subject to means testing and eligibility should be confirmed with your tax advisor.
This rebate would generally not be available for persons where the service receives no subsidy for your care, either because you are in an unfunded place, or because you have no funded care needs.
HARDSHIP
If paying any determined fees and charges would cause you financial hardship, we can assist you to make an application to the Australian Government for relief from accommodation payments.
EX-PRISONERS OF WAR
The value of your assets is reduced by any "Japanese/German/Italian & Allies" Internment" compensation payment you received.
Thank you for taking the time to read this advice.
REFUNDABLE ACCOMMODATION DEPOSITS EXEMPT FROM DHS/DVA PENSION ASSETS TEST
Refundable Accommodation Deposits ("RADs") and Accommodation Bonds are not considered as "assets" for the DHS or DVA Assets Tests. This means that single pensioners who sell their homes after entering a residential care service will not automatically have their pension reduced when the proceeds from the sale of the house plus their other assessable assets exceed $550,000.00
By paying a sufficiently large Refundable Accommodation Deposit to a residential care service, residents may be able to ensure that they have no Assets Test pension reduction.
Refundable Accommodation Deposits are also not "deemable assets" for the pension "Income Test" calculation.
Refundable Accommodation Deposits are, however, included as assets in the new means-tested care fees calculations. Residents may therefore be subject to additional means-tested care fees after selling their house.
We have an Information Sheet available on how means-tested care fees work.
We strongly recommend speaking with a financial adviser to assess a person's pension entitlements and best options on moving to residential care.
IMPORTANT NOTE:
We are not able to offer you financial advice or to advise you on your best options. It is recommended that you seek independent financial advice and/or call Services Australia’s Financial Information Service (FIS) or Aged Care Specialist Officers (ACSOs) or Department of Veterans’ Affairs (DVA) before making any decisions. Brochures for Financial Advisers are available at the front desk. More information is available at https://www.servicesaustralia.gov.au/financial-information-service and https://www.servicesaustralia.gov.au/aged-care-specialist-officer-my-aged-care-face-to-face-services?context=55715
Keep your financial details up to date
Remember to keep your personal and financial details up to date with Services Australia or the Department of Veterans’ Affairs (DVA). Under the new Aged Care Act, you are required to report changes to your income or assets within 28 days. This will ensure you are paying the right fees for your individual circumstances.
'MEANS NOT DISCLOSED' RESIDENTS
Residents will be allowed a set period of time after entry to request a combined asset and income assessment from Department of Human Services (Centrelink).
Where a person does not disclose their means after 2 requests from Department of Human Services (Centrelink), they will be considered a Means Not Disclosed resident.
A Resident who refuses to have their income and assets assessed will not be eligible for government assistance with their fees and accommodation.
The resident can then be asked to pay the maximum means-tested care fees based on the cost of their care plus an accommodation payment agreed with the Provider before entry.
What is a Refundable Accommodation Deposit (RAD)?
A RAD is a Refundable Accommodation Deposit. It is a lump sum payment towards your Accommodation Payment.
Refundable Accommodation Deposits are exempt from the Department of Human Services (Centrelink) or DVA Pension Assets Test. Daily Accommodation Payments calculated on the total Accommodation Payment are payable from date of entry on any part of the Accommodation Payment that has not been paid as a Refundable Accommodation Deposit.
Refundable Accommodation Deposits are included in the Means-Tested Care Fee asset test.
What is a Daily Accommodation Payment (DAP)?
A DAP is the Daily Accommodation Payment. You may elect to pay an increased daily fee which is known as a Daily Accommodation Payment instead of paying all or part of your Accommodation Payment as a Refundable Deposit to us. The Daily Payment is interest on the balance of any unpaid Accommodation Payment amount.
You may choose to subsequently pay part of or all of the balance of your Accommodation Payment as a Refundable Accommodation Deposit at any future time.
We recommend you speak with your financial advisers as to whether it is best to pay your Accommodation Payment by Refundable Accommodation Deposit, Daily Accommodation Payments or a combination of the two.
What are Means Tested Care Fees (MTCFs)?
Means-Tested Care Fees (MTCFs) are government-assessed "co-payments" towards the cost of your care, if you have sufficient income and assets. This fee is in addition to your standard fees (and any accommodation payments).
Why is my Means Tested Care Fees changing every quarter?
Your means-tested amount can vary dependent on deeming rates; levels of assessable assets; and other changes to your assets and income. The daily Means Tested Care Fees also cannot exceed the amount of daily subsidies and supplement that a Provider would otherwise be eligible to receive for the Resident.
As your care needs change, the amount of subsidies payable will vary and therefore so may the Means Tested Care Fees.
The Department of Human Services (through Centrelink) will re-assess your income and assets and will advise you and the Provider quarterly if there has been a change in your Means Tested Care Fee.
What if I have enough assets to afford to pay my Accommodation Payment as a Refundable Accommodation Deposit but not enough regular income to pay the full monthly fees?
We acknowledge that some people have significant assets but limited income. Subject to means-testing of your capacity to pay, we will offer to "draw down" your Means-Tested Care Fees from your Refundable Accommodation Deposit.
If I keep my home, and rent it out to provide income to pay a Daily Payment, what are the DHS (Centrelink) rules?
If you keep your home, it is automatically exempt from the DHS/DVA Assets Test for two years after you enter a residential aged care service. A fter two years, your pension will normally be re-assessed under the "non-homeowners assets test" with the value of your home included as an asset.
However, your home may remain exempt from the DHS/DVA Assets Test for as long as you rent it out and use the rental to pay a full or partial Daily Accommodation Payment in lieu of a full Refundable Accommodation Deposit. In addition, the rent you receive may be excluded from consideration in the DHS/DVA Income Test for pension entitlements.
The best option will vary from person to person depending on your financial circumstances. Independent financial advice is strongly recommended.
What is the benefit in paying a Partial Payment (a Deposit) on or after entry?
By making a partial payment, the interest payable as a Daily Accommodation Payment on your outstanding Accommodation Payment will be lower.
Any Daily Accommodation Payments can also be withdrawn from this Partial Payment and this may allow you to be better able to meet your cost of care and accommodation.
What if I cannot afford to pay?
If you genuinely can't afford to pay, there are hardship provisions to ensure that you can still receive the care you need. Generally speaking, to be eligible for assistance, the hardships faced must be due to circumstances beyond your control, such as difficulties in selling your home or in accessing other assets.
Hardship application forms are available on the Department of Social Services or ask at our office for assistance.
Will I have to pay a different Accommodation Payment if I want to change rooms?
Every room or group of rooms has an Accommodation Payment set for it. If you elect to move from a room with a higher Accommodation Payment to a room with a lower Accommodation Payment, then you will be asked to pay only the lower Accommodation Payment on transfer and therefore will be refunded any amount paid in excess.
Conversely, if you elect move from a room with a lower Accommodation Payment to a room with a higher Accommodation Payment, then you will be asked to pay that higher Accommodation Payment.
You will have the choice of paying this additional amount either by Refundable Accommodation Deposit, Daily Accommodation Payment or a combination of the two.
