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As a Low Means or Supported Resident, Why Have My Aged Care Fees Gone Up?

TL;DR Even if you entered aged care as a low means resident, your fees can still go up later. This doesn’t mean you’ve lost your low means status—it simply means your circumstances have changed, and Centrelink now includes assets it previously ignored, like your home. The government sets a Daily Accommodation Contribution (DAC), and from that, we can calculate the lump-sum equivalent called a Refundable Accommodation Contribution (RAC). These changes are completely normal.

🧾 What Is “Low Means” and Does It Change?

When you’re assessed as low means, you qualify for extra help from the government with aged care costs. You:

  • Don’t pay a large lump sum (RAD)

  • Instead pay a Daily Accommodation Contribution (DAC)

  • May also pay a means-tested care fee, depending on your income/assets

Importantly:
Once you're assessed as a low means resident, you remain low means for your stay in that aged care facility.
Your status doesn’t change—but your contribution might.

📈 Why Do Fees Sometimes Go Up?

Aged care fees are calculated based on your financial situation, including:

  • Assets (e.g., savings, investments, property)

  • Income (e.g., pension, super)

At first, if your spouse was still living in the family home, Centrelink didn't count the home in your asset assessment. But later, if:

  • Your spouse passes away

  • Your spouse moves into aged care

  • Your spouse leaves the home permanently

… then that home becomes assessable, and Centrelink includes it—up to a cap (currently $206,663.20 as of April 2025).

This can push your assessed asset level higher, which increases the DAC Centrelink assigns to you.

🎛️ How Are These Fees Worked Out?

The government sets your Daily Accommodation Contribution (DAC) based on your financial assessment.

From this, we calculate an equivalent lump sum—called the Refundable Accommodation Contribution (RAC)—using the following formula:

RAC = (DAC × 365) ÷ MPIR

Where:

  • DAC = Daily Accommodation Contribution set by Services Australia

  • MPIR = Maximum Permissible Interest Rate (currently 8.17% as at April 2025)

So for example:

  • If DAC = $67/day

  • MPIR = 8.17%

Then:
RAC = ($67 × 365) ÷ 0.0817 = approx. $299,260

This amount represents the lump sum equivalent of your new daily accommodation cost.

📌 What This Means For You

  • ✅ You are still a low means resident
    Your status hasn’t changed, just the amount you pay has adjusted.

  • 🔁 Fee changes are normal
    They reflect a change in your circumstances, not an error.

  • 🧮 Your facility might notify you
    Often the aged care home receives a notice that your DAC has changed—e.g., from $0/day to $67/day—and they pass this on.

  • 💬 We can help
    If this happens, we can explain what changed and show you options for managing the RAC or daily fee.

🧠 Analogy: The Aged Care Spectrum

Think of aged care contributions like a spectrum:

  • You start at the low end because your home wasn’t counted.

  • If your home becomes assessable, you move up the spectrum—your DAC increases.

  • But you’re still on the low means track—just at a different point along it.

🔄 What You Should Do

  • Stay calm—this is expected under the aged care rules.

  • Let us know—we’ll check if the DAC/RAC is fair and explain your options.

  • Keep Centrelink up to date—changes in income, assets, or home ownership must be reported.

🤝 We're Here to Help

These fee changes may feel sudden, but they’re part of how the aged care system ensures contributions reflect updated financial circumstances. If you're unsure or receive a new fee letter, get in touch—we’ll walk you through it.