The federal government is largely responsible for funding residential care for old people in Australia, helped by a combination of flat user fees and income tested fees.
The government pays a subsidy to service providers--which include the charitable, religious, and private sectors--for each day a bed is occupied.
Care homes for elderly people (known as "aged care homes") can receive up to $A66 000 (£25 300; $38 000 ; a39 000) a year to look after a high care resident, with the government paying a subsidy of up to $A57 500 and the elderly person making up the difference, in what are known as "basic daily care fees."
Residents thus contribute about 13% of the cost of their accommodation and care from their private income, savings, and pension. Residents with greater needs attract a greater subsidy.
Those who do not have the full means tested pension may also have to pay an income tested fee, and high care residents with enough assets could also have to pay an accommodation charge.
Hence high care patients with sufficient assets and income can be asked to pay A$10 000 a year in basic daily care fees, $A4500 a year in accommodation charges, and an average of $A2000 a year in income tested fees.
This means that better off residents are expected to contribute a quarter of the cost of their accommodation and care. Hardship provisions exists to protect those who might experience financial difficulties in paying the fees.
