Introduction to Aged Care Residential

Residential Aged Care

Residential aged care is a category of Australian aged care and is provided in aged care homes on a permanent or respite (short-term) basis.

It is for people who need more care than can be provided in their own family homes. Services include personal care, accommodation, support services (such as laundry and meals), nursing and some allied health services.

Residential aged care is funded by both the Australian Government and contributions from residents.

The Australian Government pays subsidies and supplements to approved providers for each resident receiving care under the Act. The basic care subsidy for each permanent resident is calculated using the Aged Care Funding Instrument (ACFI). The ACFI is a tool that the provider uses to assess the care needs of a resident. The ACFI consists of a series of questions that determine funding across three domains: Activities of Daily Living, Behaviour and Complex Health Care. The greater the assessed need in each domain, the higher the care subsidy for that resident. Recent changes to the ACFI, designed to rein in higher than expected growth in ACFI expenditure, have proved controversial with aged care providers and health peak bodies.

Residents also pay fees which contribute to the cost of their care and accommodation. All residents pay a basic daily fee set at 85 per cent of the single basic Age Pension. Some residents also pay a means-tested care fee based on an assessment of their income and assets. Some residents will have their accommodation costs met in full or part by the Australian Government, but those with greater means are required to pay the Refundable Accommodation Deposit (previously known as an accommodation bond) agreed with the aged care home.

Full details about each of the categories of residential care fees are provided later in our guide.

The Australian Aged Care System

The regulated and subsidised Australian aged care system is designed to provide care, support for activities of daily living and 24x7 accommodation for persons over 65 years who can no longer live independently without support (there are times when services are provided to persons younger than 65 years, but this is assessed on each individual basis).

To receive these subsidised services, a person must undergo a care assessment to ensure that they are eligible to receive the services.

The services can be provided in the family home, in community environments and in residential aged care facilities (also called nursing homes) by a variety of regulated and accredited care providers.

The Commonwealth Government funds and regulates the aged care system with total government expenditure on aged care services around $18 Billion in financial year ending 2018, and spending on residential care at $12.4 Billion. The spending on community care (home care and support) was $5.1 Billion.

The Aged Care Act 1997 and associated Aged Care Principles set out the legislative framework for the funding and regulation of aged care, although services are also provided through contractual arrangements outside of the Act. The Department of Health (DOH) is responsible for the operation of the Act.

A Complete Guide to Residential Care

Our complete guide to Residential Care Placement provides an overview of residential aged care in Australia, and focuses on the placement activities required to be assessed for aged care, find the appropriate aged care home, understanding the costs involved, complete the application and admission paperwork, providing strategies and tips. Our guide is continually evolving as reforms and changes are made to the aged care system.

Our guide does not describe NDIS, home care options and providers, retirement villages or assisted living arrangements.

When to Start Thinking about Residential Care

One of the major recommendations that we would make for a carer of an elderly relative is to make sure you are proactive and not reactive when it comes to their care needs and declining health.

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Helpful Guides

Introduction to Residential Care
Aged Care Assessments
Selecting the right Aged Care Home
Aged Care Financials
The Admission Day
Settling In
Hints and Tips