Explainer: The Means Tested Care Fee

Explainer: The Means Tested Care Fee

Residential aged care fees can vary enormously as they are based on the financial position of the person entering care.  The Means Tested Care fee is one of the aged care fees charged, and this can vary from $0 to $265 per day*.

There is a maximum amount payable over 12 months which is currently $30,574*, called the annual cap. What this means is that once you reach this cap, your means tested care fee will be $0 until the 12 month period is up. There is also a lifetime cap which is currently $73,378*. Both of these caps are indexed.

While the rules to calculate the Means Tested Care fee are complex, here are 3 facts that you need to know:

1. The Means Tested Care fee is not evenly spread across the year

The annual cap averages $83.76 per day, but you might be asked to pay a higher rate each day (up to $265 per day) based on an assessment of your care needs until you reach the annual cap. Once you reach the cap you stop paying the means-tested fee for the rest of that year. Any other fees, for example Basic Daily Care Fee, Accommodation costs and Extra Service fees, continue.

2. The cap applies to an anniversary year

The annual cap applies to your anniversary year. This generally starts on the date you enter permanent residential care. But if you were receiving a home care package before the move, the year starts from the date your home care package commenced. This could see your first 12 months in residential care span two anniversary years, and you may pay more than the annual cap in that first 12 months.

3. The caps are indexed

Every six months, the annual and lifetime caps are indexed. You will need to reach the indexed amount before the cap will apply, but once reached, the means-tested fee ceases for the rest of the year, despite any indexation during that time.

Aged care financial matters can be complex, so it’s important you are aware of your options and how they apply to your family’s circumstances. We have a team of specialist financial advisers who can help you make these important decisions.

Based on rates and thresholds as at 20 September 2022

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