Aged Care fees and payments – annual and lifetime caps 065-19103046

The System for the Payment of Aged Residential Care (SPARC) is the legacy aged care payment system for residential care. SPARC was a view only system from 11 August 2022 and decommissioned in 2023.

To view the legacy SPARC process, see the historical version.

From 1 July 2014 the caps were introduced to limit how much a person pays in:

• means tested care fees (MTCF) for residential care, and
• income tested care fees (ITCF) for home care

Care recipients will still have to pay the basic daily fee (BDF) and any accommodation payments. Annual and lifetime caps are subject to indexation.

Care recipients who were in residential care or receiving a home care package prior to 1 July 2014 continue to pay fees under their existing arrangements. The exception to this is when they have moved to another aged care service and opted in to the post 1 July 2014 means assessment scheme. See Aged Care means assessment for more information.

For current caps and fees, see the Resources page for a link to the Department of Health and Aged Care's Schedule of Fees and Charges.

An annual cap is the maximum amount of the means tested care fees (MTCF) for residential care or the income tested care fees (ITCF) for home care that a care recipient can be asked to pay over 12 months. The 12 month calculation period:

• commences from the date the care recipient first entered aged care (either home care or permanent residential care), or
• recommences on the anniversary of the first date aged care was received, even if the care type has changed or there has been a break in care, and
• includes any pre-entry leave for permanent residential care

Once a care recipient reaches their annual cap they do not pay any more MTCF/ITCF until the anniversary of their start date is reached. Their service provider will receive full care subsidies from the Australian Government for their care.

The annual cap amount is indexed on 20 March and 20 September each year and:

• resets on each anniversary of a care recipient’s start date
• is applied based on the effective cap amount at the date it is reached
• remains in place even if a care recipient changes providers or services of the same care type

If the care recipient changes care type:

• the accrual of fees will carry over and
• the new cap amount becomes applicable to the new entry

Example 1:

• the care recipient reaches the annual cap while in home care
• the care recipient then moves to residential care within 12 months of commencing home care
• as the residential annual cap is higher, the care recipient will recommence paying their MTCF until the residential cap amount is reached

Example 2

• the care recipient reaches the annual cap while in residential care
• the care recipient then moves to home care within 12 months of commencing residential care
• as the annual cap amount for residential care is higher, the home care annual cap will apply to the new entry
• the care recipient will not have to pay their ITCF until the anniversary date is reached

Example 3

• the care recipient pays their MTCF while in residential care
• the care recipient then moves to home care within 12 months of commencing residential care
• the care recipient’s accrual of MTCF is below the residential annual cap but is higher than the home care annual cap
• the home care annual cap will apply to the new entry and the care recipient will not have to pay their ITCF until the anniversary date is reached

Once a care recipient reaches their annual cap, they do not pay any more MTCF/ITCF until the anniversary of their start date is reached. Their service provider will receive full care subsidies from the Australian Government for their care.

Care recipients will still have to pay the basic daily fee (BDF) and where applicable, any accommodation payments.

When the service provider lodges their claim and it is approved, this will calculate the annual caps reached in that month. When this happens:

• an annual cap letter is issued to the care recipient, nominee (where relevant) and the service provider
• Aged Care Staff Portal (ACSP) and ACMPS will display an annual cap date and show that the MTCF/ITCF has been reduced to $0 until their anniversary date
• any refund owing to the care recipient is calculated during the next regular review

A care recipient's means tested care fees (MTCF) or income tested care fees (ITCF) continue to accrue for any period in care. Once a care recipient reaches their lifetime cap they will not have to pay any MTCF/ITCF for the remainder of their time in care. This is regardless of the care type.

When the service provider lodges their claim and it is approved, this calculates their lifetime caps reached in that claim month. When this happens:

• a lifetime cap letter is issued to the care recipient, nominee (where relevant) and the service provider
• ACSP and ACMPS will display a lifetime cap date and show that the MTCF/ITCF has been reduced to $0
• any refund owing to the care recipient will be calculated during the next regular review

A care recipient is not liable to pay more than the annual cap threshold amount in any care year.

Any means tested care fees paid in residential care counts towards the annual cap in home care in the anniversary year a care recipient moves to home care. These fees also count towards the lifetime cap in home care.

Any income tested care fees paid in home care count towards the annual cap in residential care in the anniversary year that a care recipient moves into residential care. These fees also count towards the lifetime cap in residential care.

See Aged care reviews manual adjustments for post 1 July 2014 residential care recipients for historical information on care recipients who changed care type prior to November 2018.

Aged care systems calculate and apply an annual or lifetime cap based on income and asset information recorded. This includes care recipients with means not disclosed (MND).

If a reassessment changes the date of an annual or lifetime cap, aged care systems reassess fees and resets caps if required. In ACMPS, this applies for all care periods based on the date of effect of the reassessment. ACSP will calculate the impact where there has been a manual adjustment.

The different approach in how ACMPS and ACSP applies the reassessment of income and assets is due to the care recipient’s resident status in ACSP. For ACSP, the care recipient’s resident status (that is, low or not low means) determines their accommodation status.