Whilst we agree with the comments made by Cootamundra Nursing Home director Alex McKenna, we felt that the accommodation fee charged by the Cootamundra Nursing Home should have been included to add context to the article. This would have allowed readers to draw their own conclusions.

The accommodation charge is $549,000. This is the maximum refundable deposit an accredited aged care facility in Australia may charge unless a special determination is approved by the Australian government to charge a higher amount.

Some people will have their accommodation costs paid in full or in part by the government if their assessed assets are below a threshold $162,087. If a single person assets exceeds this financial amount, the person will be charged $549,000 without any capacity to negotiate a lower amount.

This is a very significant amount considering the average cost of a home in Cootamundra is about $200,000 and some other nearby facilities in close towns charge a significantly lower fee.

A person may elect to pay this amount as a lump sum Refundable Accommodation Payment, or as a Daily Accommodation Payment or a combination of both.

As most people will not be able to afford to pay the entire deposit, it is more likely that people will elect to pay the Daily Accommodation Payment. This daily fee is calculated like an interest only loan.

The current rate is fixed at 5.76 per cent and it set by the government. If no lump sum deposit is paid the Daily Accommodation Charge is $86.64 or $31,710.24 per year. 

This fee is in addition to the person having to pay the Basic Care Fee of $49.07 per day for their personal care from their pension or alternative income source. Some people may also have to pay an additional Means Tested Care Fee.

If a person's assets exceed the asset threshold it is very likely the home will have to be sold relatively quickly to finance a permanent placement in the Cootamundra Nursing Home because of the high accommodation charge.

Assuming $200,000 to fund their placement (say $30,000 in cash and $170,000 from the sale of the home) this amount is short of the $549,000 by $349,000.

If the person elects not to pay any deposit, the daily accommodation charge would be paid to the nursing home just over four years. This period takes into account the government requires aged care facilities to leave a person with $47,500 in assets.

Moving into permanent care is a very difficult and emotional time for anyone. We feel this situation is made much more difficult due to the financial stress. 

For many, the financial amounts involved are likely to be the biggest financial transaction in their lifetime. It is often said that the biggest purchase in one’s life is the purchase of a family home. 

However, it very likely their largest 'purchase' could be moving into the Cootamundra Nursing Home.

We recognise that the Cootamundra Nursing Home is an important community-owned, not-for-profit asset.  However, we feel the accommodation charge that has been set by the board of directors is far too high and is not widely known by the people of Cootamundra. 

Whether or not the amount of this fee is too high, it is a matter for people within the community to decide.  However, in our view it is very questionable given the facilities and amenity offered.

While some permanent residents are allocated a single room with a private bathroom, other residents are required to share a room and shared bathroom, regardless of whether they pay the full accommodation fee or not.  In the case of the latter, $549,000 is far too high.