Extra Service Fee: Meaning and Use in Aged Care
The term Extra Service Fee is commonly heard when discussing residential Aged Care, particularly in Australia. It refers to a charge made by aged care providers for an agreed-upon level of services that goes above and beyond the minimum statutory requirements for care and accommodation. Essentially, this fee allows residents to receive a higher standard or a broader range of amenities, often described as "hotel-type services."
What Exactly is an Extra Service Fee?
In the context of Aged Care, all approved providers must meet certain standards for care and accommodation. However, some providers offer a collection, or "bundle," of extra services that significantly exceed the average standard. When a resident agrees to receive these services, they pay an Extra Service Fee.
These bundles typically cover improved accommodation features, better quality food, and a wider variety of services compared to facilities that only meet the basic requirements.
Examples of Services Included in an Extra Service Arrangement:
- Higher quality or newly refurbished rooms.
- Access to broader menu choices, potentially including wine or special event dining.
- Additional recreational and lifestyle activities.
- Extended visiting hours or concierge services.
- Personal laundry services or daily newspaper delivery.
A provider can only charge an Extra Service Fee if they have been granted "Extra Service Status" for a specific room or part of their facility by the Australian Government. This status confirms they are meeting the requirements to offer these enhanced services.
Extra Services vs. Additional Services
It is important to distinguish the Extra Service Fee from an Additional Service Fee. While both relate to optional services outside of basic care, they are structured differently:
- Extra Service Fee: This is a single, packaged fee for a pre-determined bundle of services attached to a specific room or area of the facility. It covers a significantly higher standard of services overall.
- Additional Service Fee: This fee is typically for specific, individual services chosen by the resident, such as a personal hairdresser appointment or subscription TV service, which attract a separate charge. These services are often offered by providers who do not have Extra Service Status.
How the Fee is Used in Aged Care
The funds collected through the Extra Service Fee allow the provider to maintain the higher standard of service for those residents who have agreed to pay it. The agreement to pay this fee is detailed in an Extra Services Agreement, which is provided to the resident upon entering an Extra Services room. This agreement is separate from, though usually included within, the standard Resident Agreement.
The agreed fee is paid by the resident and is not subsidised by the government. The fee amount can vary significantly between facilities and depends on the specific services included in the bundle.
Changes to Extra Service Fee Arrangements
Legislation changes in Australian Aged Care mean that the system is moving away from the Extra Service Fee structure. The Australian Government is replacing the Extra Service Fee and the Additional Service Fee with a new, single charge called the Higher Everyday Living Fee (HELF).
Key Transition Dates:
- On or after November 1, 2025: Providers will no longer be able to enter into new Extra Service Agreements. Instead, the HELF will cover services beyond the basic everyday living standard.
- Before November 1, 2025: For individuals who agreed to Extra Service Fees before this date, their existing arrangements are permitted to continue until October 31, 2026. Providers can continue to adjust these fees according to the contract terms signed prior to the transition date.
This transition aims to simplify the fee structure for everyday living services in residential Aged Care across Australia. Families seeking Aged Care services should be aware of these dates and the difference between the legacy Extra Service Fee structure and the incoming Higher Everyday Living Fee model. Understanding these financial arrangements is key to planning for residential care.
Frequently Asked Questions (FAQs)
Q: Is the Extra Service Fee compulsory for all aged care residents?
A: No. It is only required if a resident chooses to live in a room or facility that has Extra Service Status and agrees to the accompanying bundle of enhanced services.
Q: Can a provider raise the Extra Service Fee?
A: Yes, providers generally have the right to increase these fees according to the terms set out in the Extra Service Agreement signed before November 1, 2025.
Q: What is replacing the Extra Service Fee after November 2025?
A: The Australian Government is introducing the Higher Everyday Living Fee (HELF) to cover services that exceed the minimum everyday living standards in residential Aged Care.
