Publication of residential accommodation prices
All prospective aged care residents must agree an accommodation price with their preferred aged care home before they enter care. However, whether the person can be asked to pay this amount, or not, will depend on their means-tested amount, which may not be worked out prior to entry.
The amount that can be agreed for a room or part of a room is limited by the maximum accommodation price published for that room by the aged care home (although a lower amount may be agreed). The maximum accommodation price cannot be more than a refundable deposit of $550,000 (or equivalent daily payment), unless approved by the Aged Care Pricing Commissioner.
The provider and the resident may negotiate any price up to the published amount and this is agreed in writing with the resident before they enter care. If the resident is eligible to make an accommodation payment, they will be liable to pay this agreed amount. They have up to 28 days after entering care to choose how they wish to do this and can make their decision at any time in this period. This can be by a refundable lump sum, an equivalent daily payment or a combination of the two.
Approval of accommodation prices
Providers are able to set the accommodation prices for different kinds of rooms, up to a refundable deposit of $550,000 or the equivalent daily payment. Accommodation prices above this amount need to be approved by the Aged Care Pricing Commissioner. To apply for the Commissioner’s approval to charge a higher amount, a provider needs to complete an application form that is available on the Aged Care Pricing Commissioner website.
The approval lasts for 4 years from the approval date, at which time it lapses and the provider can no longer charge above the maximum amount. Providers who wish to continue to charge more than the maximum amount must apply to the Commissioner for a renewal before their current approval lapses. More information about renewing a lapsing approval is available on the Aged Care Pricing Commissioner website.
Publishing accommodation prices on My Aged Care
All residential aged care providers are required to publish the maximum accommodation price that they propose to charge for each room or part of a room in the aged care home. The published price is the maximum price that can be charged.
This information is published on My Aged Care, and must also be published on a provider’s own website (if they have one) and in relevant printed materials given to prospective residents. This enables prospective residents to compare different accommodation options and prices to make an informed decision about their accommodation.
Providers must also publish a description of the accommodation and an explanation of the payment options. The published information must include the maximum accommodation price quoted as both a refundable accommodation deposit (RAD) and equivalent daily payment (DAP) amounts, and include an example of a combination payment.
More information about how to publish the accommodation pricing information is available on the My Aged Care website.
What information must be published?
For each group of rooms or part of a room (a bed in a shared room or ward) offering at different prices, the following information should be provided:
- the kind of accommodation offered (e.g. private or shared) and maximum occupancy;
- the type of bathroom (e.g. ensuite or shared);
- a statement describing the quality, condition, size and amenity of the room and any common areas which a person in that room could access;
- a description of any specific accommodation or design features of the room or the areas of the facility someone occupying this room will be able to access;
- any additional care or services (other than those specified in Schedule 1of the Quality of Care Principles 2014) included in the accommodation payment; and
- whether the room is offered on an extra service basis, and if so, the amount of the fee and a description of the services.
For each group of rooms, the following information should be provided:
- the maximum price that will be charged for accommodation in that room on or after 1 July 2014, quoted as both refundable deposit and daily payment amounts; and
- an example of a combination payment (for example, the price of the room if the resident paid 50% of the accommodation payment as a refundable deposit and 50% of the accommodation payment by periodic daily payments).
The provider does not need to publish a price for every individual room or part of a room in a service.
They may group rooms or parts of rooms that are substantially similar together, providing they publish the same maximum price for all rooms in that category. The price and key features will need to apply equally to each room or part of room in each category.
How often is the published pricing information updated?
Providers need to update the prices and key feature statements if anything changes, for example if they change the maximum price or the statement no longer accurately describes the room.
They also need to update the pricing information when the maximum permissible interest rate (MPIR) changes, as the daily payment amount equivalent to a given refundable deposit will change.
The daily payment amounts published on My Aged Care will be updated automatically when the MPIR changes.
Financial equivalence between the refundable deposit and the daily payment
Prices must be published as the refundable deposit amount and an equivalent daily payment, as well as show an example of a combination payment.
To calculate the equivalent daily payment, the refundable deposit is multiplied by the current maximum permissible interest rate (MPIR) and divided by 365 days.
For example, assuming the MPIR is 5.70%, a refundable deposit of $400,000 would have an equivalent daily payment of:
Refundable deposit x MPIR $400,000 x 5.7%
365 = 365 = $62.46 per day
An example of a combination payment for a $400,000 price may be a refundable deposit of $200,000 and a daily payment of the remaining $200,000 of:
Refundable deposit x MPIR $200,000 x 5.7%
365 = 365 = $31.23 per day
The MPIR is calculated quarterly. All aged care providers are notified of the MPIR prior to the commencement of each quarter. The MPIR is also published on the Department of Health website.