Fact or fiction? 100s of aged care homes charging more than $550K, Daily Tele says

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The NewsCorp paper published a story over the weekend arguing bond (RAD) prices are squeezing many elderly people out of aged care.

It highlighted the fact 215 aged care homes had been given permission by the Fed Govt to charge more than the maximum bond of $550,000 for 12,780 rooms.

We thought we’d do some fact checking, so we grabbed the Aged Care Pricing Commissioner’s annual report for 2015-16.

Since new regulations on higher accommodation payments were introduced in 2014, 112 (11.5%) providers have applied to go above the threshold. This totals 12,780 rooms so yes, hundreds of homes do charge over the maximum $550K. However these only represent 6.64 % of all aged care places.

Of these approved places, 74% were in the $551,000 to $850,000 price range, with 42% in the $551,000 to $700,000 range and another 32% in the $700,000 to $850,000 range. This proportion has stayed relatively the same over the years.

Just 10% of all rooms approved were over $1M. In total, only 0.7% of all aged care places across Australia cost over $1M.

23% of all approved rooms since 2013/14 are also in facilities that have either been newly built or undergone renovations.

And as Aged Care Guild CEO Cameron O’Reilly states in the article, bond prices reflect land values and development costs.

“A bond will be higher in places like Sydney or Melbourne … just as houses cost more in those locations, so do aged care facilities,” he says.