Aged care entry requirements for providers

Information for aged care providers about aged care entry requirements.

Home Care

Home care

Home care is funded by the Australian Government through the Home Care Packages Program and provides aged care services to people in their own home.

Care recipients generally need 2 assessments to access a government subsidised home care package:

From 27 February 2017, for an approved provider to claim subsidies, a care recipient also needs:

  • a home care package assigned by Department of Health (Health)

Read more about the care recipient assessment and approval process on the Health website.

Aged Care Fees Income Assessment

The income test assessment determines any additional fees that care recipients need to pay to cover the costs of aged care.

Read more about the assessment

How fees for home care are calculated

There are various types of aged care fees and charges that may apply.

Basic daily fee

The basic daily fee for home care is 17.5% of the single basic Age Pension daily payment rate. All care recipients pay this amount towards their cost of care.

Income tested care fee

Some home care recipients who started care from 1 July 2014 pay an income tested care fee based on their total assessable income over the relevant income free area.

Hardship

If the care recipient is having trouble meeting their care costs or are in financial hardship they may be eligible for financial hardship assistance.

You may receive a hardship supplement on the care recipient's behalf to help cover the cost of their care.

My Aged Care

The care recipient can read more about the aged care fees and charges that may apply to them on the My Aged Care website. They can also call the My Aged Care Information Line on 1800 200 422.

Aged Care Fee Estimator

The Aged Care Fee Estimator on the My Aged Care website can help care recipients estimate the fees and charges they need to pay for aged care. The estimator should be used as a guide only. The fees they pay depend on their income as assessed by us or the Department of Veterans’ Affairs (DVA).

The Aged Care Fee Estimator isn’t a substitute for financial advice. Care recipients or their nominees should seek independent legal, financial, taxation or other advice to check how the estimate relates to their circumstances.

Quarterly review for home care

Care recipient’s aged care fees are reviewed quarterly and come into effect on 1 January, 20 March, 1 July and 20 September each year.

About the review

The quarterly review:

  • aligns the fees a care recipient pays with the fees associated with their care needs and changes to financial circumstances
  • covers the period since the previous quarterly review, including any changes made during that quarter for an historical event - for example, the sale of an asset when we’re not notified until a later quarter
  • determines if the fees applied over the period since the previous quarterly review were correct
  • identifies if the care recipient has overpaid fees and calculates a refund
  • adjusts the government subsidy paid to you as a result of this change

The review also sets the fees the care recipient pays for the next quarter by applying any changes in income or assets that occurred during the previous quarter. This includes changes to consumer price indexation.

After the review

We send a letter to the care recipient and their nominee when:

  • a refund is due, or
  • the income or means tested fees or accommodation contribution for the next quarter has
    • increased by 10 cents or more per day, or
    • decreased by 1 cent or more per day

We won’t send a letter to the care recipient if only the basic daily fee changes.

We’ll send you a letter if a change has occurred for your care recipient during the review period.

If a refund is payable to a care recipient, we pay the refund to you as part of the normal claim process. You must pass this refund onto the care recipient.

Ad hoc reviews

A care recipient can request an ad hoc review if their circumstances change and they want their fees and charges reviewed outside of the quarterly process.

If a new fee is set after an ad hoc review, the new rate applies from the date the review takes place. We send notification letters to you and the care recipient, and their nominee if applicable.

If a home care recipient’s new fee is lower than the previous fee, a refund is calculated and paid when the next claim is processed. We send a notification letter about the refund to you and the care recipient, and their nominee if applicable, at the time of the ad hoc review.

If a refund is payable to a care recipient, we pay the refund to you as part of the normal claim process. You must pass this refund onto the care recipient.

Read more about the Schedule of Fees and Charges for Residential and Home Care on the Health website.

Home care cap thresholds

Annual caps

There are 2 annual cap amounts that may apply in home care. These caps apply at 2 different daily rates. This depends on a care recipient’s financial circumstances:

  • for part-pensioners or other care recipients equal to or below the maximum income-tested care threshold
  • for self-funded retirees or other care recipients above the maximum income-tested threshold

Annual caps reset each year on the anniversary of a care recipient’s entry into aged care. Once this reset occurs the care recipient needs to pay the income-tested care fee until the annual cap is reached again.

You can find the annual cap amounts for home care on the Health website.

Lifetime caps

A lifetime cap applies when the total income-tested care fees paid by a care recipient over their lifetime in aged care reaches the threshold.

We calculate the lifetime cap amounts by tallying the care subsidy reductions against the cap at the end of that month.

Once the cap is reached, the care recipient can’t be asked to pay any more income-tested home care fees.

You can find the lifetime cap amounts for home care on the Health website.

Residential Care

Residential Care

Care recipients generally need 2 assessments to access a government subsidised Residential Care Package:

Combined Assets and Income Test (Means) assessment

The combined Assets and Income (Means) Test assessment is used to determine the daily rate of aged care fees payable by a care recipient who is planning to enter, or is currently residing in, a residential aged care home. It’s also used to calculate the amount of government assistance you’ll receive on the care recipient’s behalf.

The test assesses the care recipient’s income and assets, including:

  • income support payments from us or the DVA
  • deemed income from financial investments
  • net rental income
  • net income from businesses, including farms
  • superannuation and overseas pensions
  • income from income stream products, such as annuities and allocated pensions
  • family trust distributions or dividends from private company shares, and
  • property or items of value the care recipient owns or has an interest in

A care recipient’s rental income from their former principal home is exempt from the test if the care recipient:

  • entered care before 1 January 2016, and
  • is making periodic accommodation payments or a combination of periodic and lump sum accommodation payments

If a care recipient leaves residential care for more than 28 days, rental income from their former principal home is included in the aged care means test when they re-enter care.

In some situations the fee advice differs to what the care recipient was expecting. It may be because we or the DVA have additional information about the care recipient.

Care recipients must provide information about their finances to us or the DVA in order to complete the assessment.

A means test assessment isn’t required before a care recipient enters residential care. Care recipients can choose not to have their means assessed and pay the full cost of care, subject to annual and lifetime caps.

Prospective care recipients can complete means test assessments up to 120 days before entering residential care. Their initial fee notification advice is valid for 120 days unless they tell us of a significant change in their circumstances.

Incomplete assessment

We contact care recipients if they submit incomplete assessments. If this is unsuccessful we’ll write to the care recipient. If care has already started, we’ll send you a letter to ask for more information.

Assessments not submitted

We send reminders if the care recipient is already in care and hasn’t submitted a request for an assessment. If they don’t submit a completed assessment after these reminders they’ll pay the full cost of care and the agreed accommodation price. We send you and the care recipient notification letters with this advice.

Assessment outcome

When the assessment has been completed, we send an assessment outcome letter to the care recipient and nominee. It lets them know about any fees the care recipient needs to pay.

After entry into aged care

When the care recipient starts care, you need to enter their details into the online Aged Care Entry Record for means testing data matching. If an assessment has already been completed, you’ll receive the fee notification letter for the care recipient.

How fees for Residential Care are calculated

There are various aged care fees and charges that may apply.

Basic daily fee

The maximum basic daily fee for all aged care residents is 85% of the single basic Age Pension daily payment rate. All care recipients pay this amount towards living costs in residential care. It’s paid to service providers to cover living costs such as meals, electricity and laundry. For some, it’s the only fee they need to pay.

Means tested care fee

Some care recipients pay an additional contribution to their cost of care if their combined assets and income assessment shows they have the financial capacity to do so.

Accommodation payment

The accommodation payment is for the care recipient’s accommodation in residential care. Depending on their means, some people have their accommodation costs paid in full or part by the government, while others need to pay the accommodation price agreed with the residential care provider.

Additional fees

Additional fees may apply if the care recipient chooses a higher standard of accommodation or additional services. The details of these services and fees that apply are between the care recipient and you as their provider.

Hardship

If the care recipient is having trouble meeting their care costs or is in financial hardship they may be eligible for financial hardship assistance.

You may receive a hardship supplement on the care recipient’s behalf to help cover the cost of their care.

My Aged Care

The care recipient can read more about the aged care fees and charges that may apply to them on the My Aged Care website. They can also call the My Aged Care Information Line on 1800 200 422.

Aged Care Fee Estimator

The Aged Care Fee Estimator on the My Aged Care website can help care recipients estimate the fees and charges they need to pay for aged care. The estimator should be used as a guide only. The fees they pay depend on their income as assessed by us or the DVA.

The Aged Care Fee Estimator isn’t a substitute for financial advice. Care recipients or their nominees should seek independent legal, financial, taxation or other advice to check how the estimate relates to their particular circumstances.

Quarterly review for Residential Care

Aged care fees for care recipients are reviewed quarterly and come into effect on 1 January, 20 March, 1 July and 20 September each year.

About the review

The quarterly review:

  • aligns the fees a care recipient pays with the fees associated with their care needs and changes to financial circumstances
  • covers the period since the previous quarterly review, including any changes made during that quarter for an historical event - for example, the sale of an asset when we’re not notified until a later quarter
  • determines if the fees applied over the period since the previous quarterly review were correct
  • identifies if the care recipient has overpaid fees and calculates a refund
  • adjusts the government subsidy paid to you as a result of this change

The review also sets the fees the care recipient pays for the next quarter by applying any changes in income or assets that occurred during the previous quarter. This includes changes to consumer price indexation.

After the review

We send a letter to the care recipient, and their nominee, when:

  • a refund is due, or
  • the income or means tested fees or accommodation contribution for the next quarter has
    • increased by 10 cents or more per day, or
    • decreased by 1 cent or more per day

We won’t send a letter to the care recipient if only the basic daily fee changes.

We send you a letter if a change has occurred for your care recipient during the review period.

If a refund is payable to a care recipient, we pay the refund to you as part of the normal claim process. You must pass this refund onto the care recipient.

Ad hoc reviews

A care recipient can request an ad hoc review if their circumstances change and they want their fees and charges reviewed outside of the quarterly process.

If a new fee is set after an ad hoc review, the new rate applies from the date the review takes place. We send notification letters to you and the care recipient, and their nominee if applicable.

If a residential care recipient’s new fee is lower than the previous fee, a refund is calculated and paid as part of the next quarterly review. Letters about the refund are sent as part of the quarterly review process.

If a refund is payable to a care recipient, we pay the refund to you as part of the normal claim process. You must pass this refund onto the care recipient.

Read more about the Schedule of Fees and Charges for Residential and Home Care on the Health website.

Residential Care cap thresholds

Annual caps

Once the annual cap is reached, the recipient can’t be asked to pay any more means-tested care fees until the next anniversary of the date they first began receiving aged care. The basic daily fee and applicable accommodation costs are still payable.

Annual caps reset each year on the anniversary of a care recipient’s entry into aged care. Once this reset occurs, the care recipient needs to pay the means-tested care fee until the annual cap is reached again.

You can find the annual cap amounts for residential care on the Health website.

Lifetime caps

A lifetime cap applied when the total means-tested care fees paid by a care recipient over their lifetime in aged care reaches the threshold.

Once the means-tested lifetime cap is reached, the care recipient can’t be asked to pay any more means-tested care fees. They still need to pay the basic daily fee and applicable accommodation costs.

You can find the lifetime cap amounts for residential care on the Health website.

Payment statements for Residential Care subsidy

View and print monthy payment statements that show the Australian Government subsidy paid for care recipients receiving residential care in the specified month.

Read more about the Payment statements for Residential Care subsidy

You need to know

Annual and lifetime caps

Since 1 July 2014, annual and lifetime caps apply to the:

  • income-tested care fee in home care packages, and
  • means-tested care fee for residential care

These arrangements apply to care recipients who entered care on or after 1 July 2014.

They only apply to care recipients who were in care before 1 July 2014 if they:

  • leave their residential care home or home care package for more than 28 days, other than on approved leave and then re-enter care, or
  • choose to opt in to the new fee arrangements when changing home care services or aged care homes after 1 July 2014

Basic daily fees, accommodation payments, accommodation contributions and fees for extra services aren’t included in the annual and lifetime caps. They remain payable after the caps have been reached.

We write to you and your care recipient when we’ve processed the claim for the month in which the care recipient reached the annual or lifetime cap. Once the cap is reached, we pay the income or means-tested fees through subsidy payments to you, and the care recipient pays the basic daily fee and any accommodation costs.

Changing providers or care types

The annual and lifetime caps follow a care recipient as they move between providers, services and care types. Home care package income-tested fees and residential care means-tested fees accrue against a person’s annual and lifetime cap from the date of their first entry into home care or residential care on or after 1 July 2014.

Any means-tested care fees paid in residential care counts towards the annual cap in home care in the year a care recipient moves to a home care package. These fees also count towards the lifetime cap in home care.

If a care recipient was receiving residential care before 1 July 2014 and moves into home care after 1 July 2014, only the income-tested care fees paid from the time the care recipient starts home care count for the annual and lifetime caps.

Any income-tested care fees paid in a home care package count towards the annual cap in residential care in the year that a care recipient moves into residential care. These fees also count towards the lifetime cap in residential care.

If a care recipient was receiving home care before 1 July 2014 and moves into residential care after 1 July 2014, only the means-tested care fees paid after the move are counted for the annual and lifetime caps.

Subsidy adjustment

Caps are reconciled as part of monthly claims processing. If the cap is reached in the month being processed, the care recipient and service are notified after the claim is finalised. Any delays in lodgement also delay the subsidy adjustment for a care recipient who has reached their cap.

We refund any payments made by a care recipient for the part of the month after the cap takes effect, where the subsidy adjustment hasn’t been made yet. We refund the amount in their next quarterly review.

Accommodation supplement

We pay the accommodation supplement to aged care providers to help with accommodation costs for some aged care recipients.

Aged care providers can watch the video to learn more about the accommodation supplement.

Changing providers or care types

The annual and lifetime caps follow a care recipient as they move between providers, services and care types. Home care package income-tested fees and residential care means-tested fees accrue against a person’s annual and lifetime cap from the date of their first entry into home care or residential care on or after 1 July 2014.

Any means-tested care fees paid in residential care counts towards the annual cap in home care in the year a care recipient moves to a home care package. These fees also count towards the lifetime cap in home care.

If a care recipient was receiving residential care before 1 July 2014 and moves into home care after 1 July 2014, only the income-tested care fees paid from the time the care recipient starts home care count for the annual and lifetime caps.

Any income-tested care fees paid in a home care package count towards the annual cap in residential care in the year that a care recipient moves into residential care. These fees also count towards the lifetime cap in residential care.

If a care recipient was receiving home care before 1 July 2014 and moves into residential care after 1 July 2014, only the means-tested care fees paid after the move are counted for the annual and lifetime caps.

Subsidy adjustment

Caps are reconciled as part of monthly claims processing. If the cap is reached in the month being processed, the care recipient and service are notified after the claim is finalised. Any delays in lodgement also delay the subsidy adjustment for a care recipient who has reached their cap.

We refund any payments made by a care recipient for the part of the month after the cap takes effect, where the subsidy adjustment hasn’t been made yet. We refund the amount in their next quarterly review.

Page last updated: 27 August 2017