The hidden challenges for concessional residents

How fees for concessional residents can increase over time

If financial circumstances change, a resident who was originally fully supported may move into a partially supported category.

This can result in a significant increase in costs.

For example, a resident who initially paid only the basic daily fee (currently $66.80 per day) may later be required to pay:

• A Daily Accommodation Contribution (up to $72.30 per day), and
• Other fees that are means-tested.

This means that financial changes, whether expected or unexpected, can result in increased contributions towards care and living costs.

Understanding the Daily Accommodation Contribution (DAC)

A resident may initially pay nothing towards accommodation, but their contribution is reassessed over time in line with changes to their financial situation.

For residents classified as Government Supported, the government assesses how much they can pay for accommodation which is called the Daily Accommodation Contribution (DAC). The DAC can range from $0 per day (fully supported) up to $72.30 per day (the current Maximum Accommodation Supplement).

While the DAC itself is capped at the Maximum Accommodation Supplement (which is indexed bi-annually), other fees remain subject to ongoing means-testing.

It’s not just DAC that can increase. Other fees that are means-tested include:

• Hotelling Contribution (covering everyday living services such as meals and cleaning)
• Non-Clinical Care Contribution
• Means-tested care fee, if under the grandfathered / transitional rules

Because these fees are linked to the assets and income assessed for a resident and their spouse, there can be significant increases to fees at any stage of a residents time in care.

Common triggers that increase fees for concessional residents

One of the most misunderstood aspects of aged care fees is how changes in assets or income affect fees.

One of the most common triggers include changes relating to the former home.

When the former home loses exemption and becomes assessable

A former home may initially be exempt from assessment but later become assessable. The reasons include:

• A spouse leaving the former home
• A protected person (such as a carer or eligible family member) leaving the home
• A protected person ceasing to receive a qualifying government income support payment
• Selling the property

When any of these occur, it alters the assessed fees.

Other financial changes that may trigger fees

Fee changes also occur due to:

• Spouse passing away and resident assessed as a single person
• An increase in income, such as higher pension payments
• Increase in assets, this can occur gradually over time such as an investments growing in value
• Receiving an inheritance

These events can result in the fees assessed for a resident to contribute towards their care.

Why these changes can be difficult for families

For families, fee assessments can be confusing and unexpected.

A common myth is believing that once concessional status is granted, the fees won’t increase. However, aged care funding rules require ongoing assessment when financial circumstances change.

Families may only become aware of changes after seeing the fees increase.

These situations can create uncertainty, particularly when families are already managing the emotional and practical challenges of aged care.

It is also important to understand that changes do not always happen immediately. Some financial events, such as the delayed sale of a home or receipt of an inheritance, can affect fees months or even years after entry into care.

Planning for the long-term reality of aged care fees

Ultimately, even for residents entering care as fully concessional, financial stability in aged care is not guaranteed.

Circumstances change. Assets change. Income changes. And when they do, fee assessments often change as well.

Understanding that aged care fees can evolve over time and recognising the events that may trigger reassessments is an important part of planning for the ongoing affordability and sustainability of care.

Being aware of potential fee changes can help families avoid unexpected financial pressure. If you’d like to understand what this could mean for your situation, contact our Lifestyle and Care Team for practical, personalised support.