How much does it cost?
New Aged care means assessment forms
The Department of Human Services (DHS) has released the new Aged Care Calculation of your cost of care (SA486) digital form. Your clients can fill it in online, print and sign it and send it to DHS with their supporting documents. The digital form uses dynamic questions tailored to the customers’ individual circumstances.
For clients who would prefer to use our simplified paper forms, they are as follows:
These forms are all available on the DHS website. Tips on how to download the digital form can be found here.
Aged care means tests: https://www.humanservices.gov.au/individuals/services/aged-care-means-tests
We assess your financial details to work out how much you need to pay towards aged care.
Customers commencing a Home Care Package don’t need to fill in a form if they get a means tested income support payment from Centrelink or DVA.
Customers entering Residential Care don’t need to fill in a form if they:
It is important to make sure their income and assets are up to date when they enter into care to ensure their assessment can be completed automatically. They can do this by accessing their Centrelink online account or by calling Centrelink on 132 300 or DVA on 1800 555 254.
Department of Health
13 August 2019
What if I can't afford it? If you’re worried that you may not be able to afford your home care, residential respite care or permanent residential care costs, you can ask to be considered for financial hardship assistance. If you are eligible, the Australian Government will pay some or all of your aged care costs.
If you are receiving care through another aged care program, please speak to your provider.
Learn more about financial hardship assistance.
Can I seek financial advice? Yes, you can. In fact, it is recommended that you seek independent financial advice before deciding how to pay for your aged care.
Services Australia’s Financial Information Service (FIS) is a free service available to everyone. FIS officers can show you how to make informed financial decisions and help you to understand the financial implications of your aged care costs. They can also help you understand how different payment methods for residential care may affect your pension and aged care costs if you ever need to move into an aged care home.
To find out more about FIS, or to make an appointment, call 132 300 and say “Financial Information Service” when asked why you are calling.
For more information and guidance on financial matters, you can also visit our financial support and advice page.
How to get help for residential aged care
https://www.humanservices.gov.au/individuals/services/aged-care-means-tests/how-get-help-residential-aged-care
We assess your income and assets to work out how much you need to pay for residential aged care. We may include the value of your home in your assessment.
Jun 16, 2021 HEALTH & CARE
Is it worth selling my house if I’m going into aged care?
For senior Australians who cannot live independently at home, residential aged care can provide accommodation, personal care and general health care. People usually think this is expensive. And many assume they need to sell their home to pay for a lump-sum deposit. But that’s not necessarily the case. Here’s what you need to consider. https://hellocare.com.au/is-it-worth-selling-my-house-if-im-going-into-aged-care/
Schedule of Fees and Charges for Residential and Home Care: From 1 January 2022
This page provides the latest updates to aged care fees and charges.
[i] Residents in designated remote areas may be asked to pay an additional $1.06 per day.
[ii] This rate applies to residents who enter residential care within this time period but not to those who were already in care prior to this time period. The Maximum Permissible Interest Rate applicable for the calculation of a resident’s daily payments is fixed either at their date of entry to care (for a low means resident) or the date they agree to a room price (for a resident who is not eligible for government assistance with their accommodation costs).
and do remember that the daily care fee IS negotiable.
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Consent to share your information with your aged care provider
If you're in aged care, your aged care provider might ask us for your financial information.
https://www.humanservices.gov.au/individuals/services/aged-care-means-tests/what-you-need-know/consent-share-your-information-your-aged-care-provider
10 July 2019
Aged care homes:
If you are eligible for an aged care home, you may have to pay:
Find out more about these and other fees on the aged care homes costs and fees page:
Government help with accommodation costs:
If you can afford it, you are expected to pay for your room. However, help with some or all of the accommodation costs is available to those that need it. This is determined by an income and assets assessment, but as a general guide:
Calculate how much you may pay using our residential care fee estimator..
Costs for aged care homes vary depending on your circumstances and the level of care you need.
If you are moving from home care into an aged care home, any income-tested care fee you paid while you were receiving care at home will also be counted towards the annual and lifetime cap if you move into an aged care home.
The basic daily fee is 85% of the single person rate of the basic age pension.
From 20 March 2019, the single rate of the basic age pension is $843.60 per fortnight, making the basic daily fee (from 20 March 2019 to 19 September 2019):
$51.21 per day; or
$716.94 per fortnight.
This amount is indexed with the age pension. This applies even if you are a member of a couple.
https://www.myagedcare.gov.au/aged-care-home-costs-and-fees
Schedule of Fees and Charges for Residential and Home Care: From 1 July 2021
This page provides the latest updates to aged care fees and charges.
[i] Residents in designated remote areas may be asked to pay an additional $1.06 per day.
[ii] This rate applies to residents who enter residential care within this time period but not to those who were already in care prior to this time period. The Maximum Permissible Interest Rate applicable for the calculation of a resident’s daily payments is fixed either at their date of entry to care (for a low means resident) or the date they agree to a room price (for a resident who is not eligible for government assistance with their accommodation costs).
and do remember that the daily care fee IS negiotable.
The Protection of Residential Aged Care Accommodation Lump Sum Accommodation Payments
https://agedcare.health.gov.au/reform/the-protection-of-residential-aged-care-accommodation-lump-sum-accommodation-payments
There are annual and lifetime caps on means-tested care fees. The maximum an aged care home can charge you is:
What are ‘fixed’ costs?
and that Adjustment payment
Payment and Service Finder A-Z - services
Aged Care Fees Income Assessment form (SA456)
Use this form to give us details about your income:
https://www.myagedcare.gov.au/fee-estimator/residential-care/form
To ask for an assessment, complete the Permanent Residential Aged Care - Request for A Combined Assets and Income Assessment (SA457) form.
The aged care fees income assessment asks for details about your income so we can advise you of your income tested aged care fees if:
• your Home Care Package has started on or after 1 July 2014, or
• your permanent residential aged care admission commenced before 1 July 2014.
Your centrelink payments when you go into aged care
https://www.humanservices.gov.au/individuals/services/aged-care-means-tests/you-need-know/your-centrelink-payments-when-you-go-aged-care
11 January 2019
Your Residential Care Fee Estimator for people entering residential care from 1 July 2014 onwards:
https://www.myagedcare.gov.au/fee-estimator/residential-care/form
For the latest updates to aged care fees and charges: As a result of the aged care reforms, from 1 July 2014 changes will be made to the way certain care fees are calculated in residential and home care and to how accommodation prices are charged. The new arrangements will only apply to residents and consumers of a home care package entering or commencing care on or after 1 July 2014.
Schedule of Fees and Charges for Residential and Home Care: From 1 July 2021
This page provides the latest updates to aged care fees and charges.
[i] Residents in designated remote areas may be asked to pay an additional $1.06 per day.
[ii] This rate applies to residents who enter residential care within this time period but not to those who were already in care prior to this time period. The Maximum Permissible Interest Rate applicable for the calculation of a resident’s daily payments is fixed either at their date of entry to care (for a low means resident) or the date they agree to a room price (for a resident who is not eligible for government assistance with their accommodation costs).
and do remember that the daily care fee IS negotiable.
Your aged care fees are reviewed quarterly and become effective each year on:
A basic fee – paid by all people who receive residential care. For some people, this is the only fee they may need to pay.
There is a maximum level that the Australian Government sets for the Basic Daily Fee.
Depending on their income and level of care, residents (other than respite residents) may also be asked to pay an income tested fee as part of their daily fees.
A means tested care fee - an extra contribution towards the cost of care that some residents may need to pay, on top of the basic fee, depending on income and assets. The Department of Human Services (Centrelink) or Department of Veterans' Affairs (DVA) will work it out if you are required to pay this fee based on an assessment of your income and assets, and will advise you of the amount.
The assessment is valid for 120 days, but if your circumstances change during that time, such as marital status, homeownership or financial changes, it is important you notify Centrelink or DVA (if applicable).
To find out more about the assessment process, or to obtain copies of the relevant form, call 1800 227 475 or visit
Permanent Residential Aged Care - Request for a Combined Assets and Income Assessment form (SA457)
https://www.humanservices.gov.au/individuals/forms/sa457
28 June 2019
Income and assets testing (applied as from 1 July 2014): Residents who can afford to will pay a basic fee of up to 85% of the single basic pension, a means tested contribution to their accommodation and a means tested contribution to their care.
The maximum means tested contribution will be allocated toward the resident’s accommodation payment until the full cost is paid and then toward their care fee.
No one will need to pay a care fee greater than the cost of their care. In addition, an annual cap of $27,532.59 (indexed) will apply to a resident’s means tested contribution to their care costs, together with a lifetime cap of $66,078.27 (indexed) for means tested care fees.
***** Any income tested contributions residents may have made when they were recipients of Home Care Packages will be taken into account in calculating lifetime care expenditure.
The treatment of the family home will not change from current arrangements ie if it is occupied by a spouse or protected person. ie. The net value of the home above this amount is excluded from the value of the resident's assets, instead, a capped amount of $166.707.20 will be included or the net market value of your house, if lower.
NOTE: The family home is not included in calculating the value of your assets if, when you enter care, it is occupied by your spouse or a dependent child, or a close relative or carer has lived in the home for a prescribed number of years. To satisfy this condition, the close relative or carer must be eligible for an income support payment. Do be aware though that when/should the time come when the spouse/dependent person have to go into care themselves/sell the home/downsize, that your daily means tested amount will vary if the income or value of assets changes after your admission to care. Thus, the fees and charges that you negotiated at your admission to the aged care home, may change.
Since 1 January 2016, the current exemption from the aged care means test of rental income from an aged care resident’s former home (where that resident pays at least part of their accommodation costs by periodic payments) was removed.
New entrants to residential aged care will have their net rental income from their former home assessed under the aged care means test. Visit the aged care means test. Use this form to give Aged Care or the Department of Veterans Affairs details about your combined assets and income for permanent residential aged care purposes.
18 July 2019
This change only impacts new entrants to residential aged care since 1 January 2016. Customers who enter aged care before this date will not be affected. The removal of the rental income exemption will only affect aged care means testing. This change will not affect the means test for income support payments.
Since 1 January 2016, if you are formally discharged from Residential Care for more than 28 days, rental income from your former principal home will be included in the aged care means test when you re-enter care.
An accommodation payment - a payment for accommodation in an aged care home. Some people will have their accommodation costs paid in full, or in part, by the Australian Government. Others will need to pay the accommodation price they negotiate with their aged care home. Centrelink will advise you which applies to you based on an assessment of your income and assets.
Accommodation payments are different from daily care fees. They are used by the aged care home as capital funding to improve the quality of the buildings and services they provide. Not everyone pays an accommodation payment. It depends on the value of your assets at the time of entry into care.
Minimum permissible asset level - this is the minimum amount of assets a resident must be left with if they pay at least part of their accommodation costs by refundable deposit $49,500.
Maximum refundable accommodation deposit Amount that can be charged without prior approval from the Aged Care $550,000.
Asset Threshold Residential Care Means Test
Asset Free Threshold $49,500
First Asset Threshold $169,079.20
Second Asset Threshold $408,237.60
Home Exemption Cap (applies separately to both members of a couple). The net value of the home above this amount is excluded from the value of the resident's assets.
Income Free Area (annual amount) Home Care and Residential Care
Annual income up to these amounts is excluded from the income test component of the residential means test and the income test in home care. To calculate the equivalent fortnightly income divide by 26.
Income Free Area (single person) $27,463.80
Income Free Area (Couple, Illness separated, single rate) $26,943.80
Income Free Area (Couple, Living together, single rate) $21,294.00
Asset Thresholds Residential Care Means Test
Asset Free Threshold $49,500
First Asset Threshold $169,079.20
Second Asset Threshold $408,237.60
Cap on Means Tested Care Fees in Residential Care
Annual Cap $27,754.52
Lifetime Cap on Means Tested Care Fees in Residential Care $66,610.90
Maximum Accommodation Supplement Amount $57.49
Q: Can a consumer roll over their accommodation payment when they move facilities?
https://agedcare.health.gov.au/aged-care-reform/residential-care-and-home-care-frequently-asked-questions
18 July 2019
A: No. Under the Aged Care Act 1997, the accommodation payment must be refunded ‘if the care recipient is to enter another service to receive residential care’.
Prior to entry to a new service, a resident subject to the 1 July 2014 fee arrangements will need to negotiate and agree an accommodation price with their new provider. The new provider cannot charge an accommodation price that is greater than their advertised price.
Unlike the arrangements in place in respect of bonds paid before 1 July 2014, where residents who paid an accommodation bond could have the bond balance transferred to the second aged care home, accommodation payments are not ‘automatically’ rolled over where a resident moves to a new service.
Fees for extra or additional optional services – an extra payment residents can be asked to pay if a higher standard of accommodation is chosen or to get additional services such as hairdressing or Foxtel or Wireless Internet... in rooms. Note: you can 'opt out' of receiving these services. Charges can be made if the room you have chosen has eg. a special handle for the tap, or easy to open door handles... Ask.
However, you will always have access to the services you need, regardless of your financial situation. You will never be denied a service you need because you can't afford it.
What are ‘fixed’ costs?
Financial hardship assistance for permanent residential care (aged care homes)
You may be granted financial hardship assistance to have your basic daily fee, means-tested care fees and/or accommodation costs reduced. Financial hardship assistance is not granted for extra and additional service fees.
Eligibility for financial hardship assistance
You will not be eligible for financial hardship assistance if you have:
Unrealisable assets
An asset may be considered unrealisable if you cannot sell or borrow against it. Asset(s) may be unrealisable if it is:
• a house, which cannot be sold and a bank will not loan money against it
• a compensation payment
• a farming property or properties
• a frozen asset
• a jointly owned asset where the other person is not willing to sell the asset
• misappropriation of funds
• a retirement village property, and
• it is unreasonable to sell an asset.
The following situations are not unrealisable for financial hardship purposes:
• rented properties, and
• private trusts and private companies.
A house which cannot be sold or a loan taken out against it
A resident cannot sell or borrow against their house if the house is on the market but cannot attract a buyer and the asking price is no higher than 10 per cent above the assessed assets test.
A resident who is in temporary hardship and is not expected to sell their home may be able to borrow against their home to alleviate hardship.
The resident is only expected to borrow from banks, finance companies and similar institutions with whom they normally invest or with a government body set up specifically to assist certain businesses.
If the resident claims they have tried to borrow against their house but have had their loan application rejected, evidence of their unsuccessful attempt to borrow is not required. You must provide the following evidence:
• valuations from 3 real estate agents
• proof of the sale price
• proof showing the property has been actively on the market for at least 6 months.
Jointly owned property Jointly owned properties (other than your partner), other than the family home, may be considered unrealisable if the other owner does not wish to sell the jointly owned property. You must provide a copy of the title deed or rates notice showing joint ownership of the property. Also statement(s) from the other property owner(s) that they do not wish to sell the property
If you have assets valued at more than $36,121.80, you may be able to apply for an asset to be declared as ‘unrealisable’ as part of your hardship assessment. An asset is considered unrealisable if you cannot sell it or borrow against it.
Essential expenses
If you meet the above criteria, DHS will check to see how much income you have access to after you have paid all of your essential expenses. If you have access to more than 15 per cent of the basic age pension amount (or $125.16 per fortnight as at 20 September 2018), you may not be eligible for financial hardship assistance.
Residential care
Essential expenses include, but are not limited to:
You cannot include:
If we agree to give you financial assistance, it starts from the day we get your application. Normally we can help for up to 12 months. How long you can get help for depends on how bad your money problems are. We decide this when you apply.
If you still need help you can apply again. It’s best if you do this before the current financial assistance ends. If not you’ll have to pay your fees while we’re checking your application.
********* Frequently asked questions:
Q: Does a resident’s DAP need to be re-calculated each time the maximum permissible interest rate (MPIR) changes?
A: No. The MPIR used to work out the equivalence between a refundable deposit and daily payment amounts for a resident is that which is current on the day the resident agreed an accommodation payment with the aged care home. The same MPIR continues to apply unless the person subsequently moves rooms within the aged care home.
Q: What can be deducted from a RAD?
A: If a resident has paid a refundable deposit, the provider must deduct DAPs at the resident’s request. Other amounts – such as care fees or the costs of additional services – may be deducted, if agreed between the resident and the provider. This must be set out in writing.
Q: Can a resident agree to an accommodation price that is greater than their net assets?
A: Yes. The new accommodation payments arrangements give residents and providers the flexibility to negotiate an accommodation price that is greater than a resident’s net assets. Residents can choose to pay for their accommodation by a lump-sum refundable deposit, rental-style daily payments, or a combination of both.
The combination method allows residents to pay a partial refundable deposit, ensuring that they are left with the minimum permissible asset level (currently $45,500), and then pay the balance of the agreed price by daily payments. Residents can elect to have the daily payments deducted from the refundable deposit.
Q: How long does a resident have to pay a RAD?
A: A resident has 28 days from the date they enter the facility to decide how to pay for their accommodation. If within those 28 days they make a decision to pay a RAD, they have 6 months to pay. If they make a decision after those 28 days to pay a RAD, it is due as agreed between the provider and the resident. A resident must pay a DAP until the RAD is paid.
Moving rooms within a facility
Q: Can a resident be moved if they entered into a facility on the assumption they would be paying an accommodation price agreed with the provider but were found to be low means or vice versa?
A: The User Rights Principles 2014 oversee the circumstances when a resident can be moved within the same facility. In order to meet the requirements in the Principles, the provider will need to have discussed with the consumer the information covered in the agreement at the time the resident is entering care. In particular the provider will need to be sure that the resident understands that the room he or she occupies may depend on the fee advice received from the Department of Human Services (DHS), and that the resident may be moved after entry once the fee advice has been received or if it is corrected.
Please see the following scenarios which seek to demonstrate how a provider would meet his or her obligations prior to the resident entering care in order to subsequently move the resident in response to an amended or corrected fee advice.
Example 1 – Amelia
Amelia has entered a residential aged care facility. She completed her combined income and asset assessment prior to entering care, and has an initial fee advice which indicates that the Government will pay her accommodation costs.
Prior to entering care, Amelia’s provider discussed with her and her family the two possibilities of which room she would occupy depending on whether the fee advice from DHS classified Amelia as a low means resident or an accommodation payment resident and the outcomes of each situation. Even though Amelia had a fee advice which indicated that she could not be asked to pay an accommodation payment, Amelia and her provider agreed a price and specified the room that would be provided at that price. The information was also included in the accommodation agreement between Amelia and her provider.
When Amelia first enters care, her provider accommodates her in a shared room. Two weeks after Amelia enters care she receives a revised initial fee advice and her provider receives an initial fee advice indicating that Anna is liable to pay an accommodation payment – that is the price agreed with the provider. The ‘protected person’ who had been living in Amelia’s house moved out before Amelia entered care which meant that Amelia’s former home was no longer an exempt asset.
Amelia begins to pay the agreed accommodation price and her provider moves her to the room specified in this agreement since the move had previously been discussed and agreed between Amelia and her provider at the time she entered into the accommodation agreement.
Example 2 - Sam
Sam has entered a residential care facility, but did not have the results of his combined income and asset assessment prior to entry. As Sam and his provider wait for the means test results, Sam’s provider considers him to be able to pay an accommodation payment and he is accommodated in a private room with an ensuite.
Before Sam entered care, Sam’s provider discussed with him and his family the two possibilities of which room Sam would occupy depending on whether the fee advice from DHS classified Sam as a low means resident or an accommodation payment resident and the outcomes of each situation. Sam and his provider agreed a price and specified the room that would be provided at that price. The information was also included in the accommodation agreement between Sam and his provider.
Until Sam’s means are known Sam’s provider charges him the agreed accommodation price.
DHS subsequently sends a fee advice letter to Sam and his provider advising that Sam is eligible for Government assistance with his accommodation costs and so he cannot be charged the price agreed with the provider.
Sam’s provider is able to move Sam to another room in the same facility equivalent to his classification as a low means resident since this move had previously been discussed and agreed between Sam and his provider. Sam’s provider is also required to refund the accommodation payment amounts that Sam had previously paid (net of any accommodation contributions he would instead be required to have paid in that period).
Example 3- Phil
Phil has moved into a residential care facility and has been assessed by DHS as a low means resident. However, due to renovations at the residential care facility, the only room available is a room with a published price of $350,000.
Phil’s provider had previously discussed with Phil and his family that Phil will be accommodated in the room priced at $350,000 while renovations take place and he will be moved to another room once renovation is complete. This was also included in the accommodation agreement and Phil had agreed with these conditions. Phil’s provider cannot charge him more than the lower of the maximum accommodation supplement for their facility or the accommodation contribution advised by DHS.
Phil’s provider can now move him into the new room once it becomes available as this move had previously been discussed and agreed to between Phil and his provider.
Q: If a resident who was in care on 30 June 2014 wants to move to a new room within the facility, can they be asked to pay a higher price than the accommodation bond that they have paid (i.e. up to the published price of the new room)?
A: Residents who were in care on 30 June 2014 continue to be covered by the arrangements in force on that date, unless they leave care for more than 28 days (other than on approved leave) or move to a new facility and elect to be covered by the new arrangements.
This means that if the resident was in care on 30 June 2014 and moves rooms within a facility, they continue to be covered by the rules about accommodation charges and bonds in force on that date, and cannot be asked to pay more than the bond that they previously agreed to. The published price of the room the resident wants to move into would be irrelevant, as the new rules about accommodation payments only apply to residents who entered care on or after 1 July 2014.
Q: Can a resident who entered care on or after 1 July 2014 be asked to pay a higher accommodation price if they want to move to a new room with a higher published price?
A: If a resident (who entered care on or after 1 July 2014) moves rooms within a facility, they may be charged an accommodation price that is higher or lower than the amount that they were paying, as long as the move is voluntary. The accommodation agreement must be varied to specify the new price and new room or part of room.
The new agreed price for the new room cannot be more than the maximum price that was published for that (new) room on the day that the agreement was varied. It is the maximum permissible interest rate (MPIR) current on the day that the accommodation agreement is varied that must be used to calculate the equivalence between the refundable deposit and daily payment amounts for the new room. If the accommodation payment for the new room is higher than the amount previously being paid, the resident may choose to pay the additional amount by daily payments, by a refundable deposit, or by a combination of both.
If the accommodation payment for the new room is lower than the amount previously being paid, and the resident has paid a refundable deposit, the provider must refund any excess balance to the resident.
Q: Can a resident be asked to pay a higher accommodation price if the move is not voluntary?
A: No. If a resident (who entered care on or after 1 July 2014) moves rooms, but the move is not voluntary, they cannot be asked to pay a higher accommodation payment than they were previously paying, even if the published price for the new room is higher.
If the price for the room (that was published on the day that the notice to move was given to the resident) is lower than the amount the resident was previously paying, then they cannot be asked to pay more than that published amount. It is the maximum permissible interest rate (MPIR) applicable on the day that the notice to move is given to the resident that must be used to calculate the equivalence between the refundable deposit and daily payment amounts for the new room.
A move is not voluntary if:
Refundable Deposit Balance and Accommodation Bond Balance Refund Interest Rates
16 August 2019
Approved providers are required to pay interest on a refundable deposit balance or accommodation bond balance for the period from the day after the resident leaves the care service until the refundable deposit balance or accommodation bond balance is refunded. The requirement to pay interest also applies to approved providers holding entry contributions in the event that an entry contribution balance is refunded after the time specified in the Formal Agreement.
Relevant rates and thresholds for refundable deposits and daily payments
Maximum Permissible Interest Rate for all new residents from 1 July 2019 - 30 September 2019 5.54%
- for all new residents from
1 October 2019 - 31 December 2019 4.98%
Base Interest Rate - 1 August 2019 3.00%
Minimum permissible asset level - this is the minimum amount of assets a resident must be left with if they pay at least part of their accommodation costs by refundable deposit $49,500
Maximum refundable accommodation deposit Amount that can be charged without prior approval from the Aged Care Pricing Commissioner $550.000
Lump sum deposits operate like an interest free loan to residential aged care providers, accruing no interest income for the resident during their time in care. When the resident departs care, the lump sum deposit begins to attract interest, providing a benefit to the resident or their estate* whilst the lump sum deposit is still held by the provider, and care services are no longer delivered.
https://lasa.asn.au/wp-content/uploads/2019/02/LASA-2019-20-Budget-Submission.pdf
Their estate*
If the resident has passed away, up until 14 days after the approved provider is shown the probate of the will or letters of administration of the estate. If the approved provider does not refund the lump sum payment within the legislated timeframes for repayment, the approved provider must pay interest at the Maximum Permissible Interest Rate for the period commencing from the day after the date the lump sum payment should have been refunded, and ending on the day the lump sum payment is repaid.
Allowing providers to request probate or letters of administration before refunding the lump sum balance provides important legal protection to the provider from refunding the lump sum to a person that is not the legal representative of the estate. Providers are not required to wait for probate or letters of administration however, and they may choose to make the refund earlier if they prefer. Providers can face risks in refunding the lump sum balance prior to probate being provided, such as refunding the lump sum to the wrong beneficiary, or in circumstances where the Will of the deceased resident is contested or the resident has died intestate.
The requirement to pay interest on the lump sum deposit from the date following the resident’s departure ensures that the resident or their estate is compensated for the time that the lump sum deposit is held by the provider whilst care is no longer being provided.
Whilst providers are required to pay interest on the balance of the lump sum deposit held during this period, the provider is able to earn interest income on the amount owing during the whole time the deposit is held which can be used for service provision. The provider’s ability to earn interest needs to be balanced with the requirement for maintaining sufficient liquidity to enable the provider to repay lump sum accommodation balances as and when they fall due for repayment.
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Finding a Residential Care Home in your area:
Have a look here for Nursing Homes in your area: https://www.myagedcare.gov.au/find-a-provider/aged-care-homes
Choose the ones you think you may be interested in and click under “Compare providers”
You will see a comprehensive comparison. Remember, you can go back again and again until you feel you have a good understanding of each. Print out the ones you like.
Now, armed with this knowledge, actually Visit each of your chosen selections
Tip – don’t just ring and ask for an appointment, just turn up unexpectedly, introduce yourself, and ask to see over the place. And SMILE, and remember to ask awkward questions too…
But DON'T go alone. Do have a friend drive you, and come in with you. This IS a highly emotional time. You will feel apprehensive, dread, have the feeling that you are betraying your loved one, and an overwhelming sense of guilt. But you will do it because your loved one Needs YOU to do this.
And as you come out the front door again, immediately write down all your impressions, both good and bad. These notes are what will help guide you and your family to make the best decision; the best outcome for your loved one.
And remember, this decision is Not set in stone. If your loved one does not like the place, they can move...
To immediately find a list of possible vacancies in Your Area, click here.
Inform yourself and your loved one. Your nursing home Checklist.
and
Is what you see, what you get? Ask those awkward questions.
http://www.agedcarecrisis.com/resources/nursing-home-checklist#care-and-services-what-s-included-extra-charges
If your income and assets are over a certain amount you may be asked to make an accommodation payment that you agree with the home. Otherwise the Australian Government will pay for part or all of your accommodation costs.
The Department of Human Services will advise you if you are required to make an accommodation payment.
This tab provides the maximum price (accommodation payment) you may be asked to pay when entering a home after 1 July 2014, you may be able to negotiate a lower price with the home.
This tab also provides details on any additional care or services that may be offered by the home, either as part of the accommodation price or available at an additional cost.
How do I work it out?
Residential Care – Fee Estimator
The Residential Care Fee Estimator and click on Aged Care Homes provides an indication of the fees and charges you may be asked to pay while living in an aged care home. Based on the information you provide, it estimates your;
Means Tested Care Fee Your aged care home provider may ask you to pay a means-tested care fee. This will vary based on your assessed income and assets. This is in addition to the:
The actual fees you may be asked to pay will depend on your personal situation, the time you enter care, the information you provide to the relevant Australian Government Departments and your personal and financial information at the time of the assessment.
My Aged Care - Phone 1800 200 422 can assist you with using these fee estimators or can provide you with an estimate over the phone. Before you call you should have your financial information ready, especially details of your various forms of income and assets.
For more information on aged care costs call My Aged Care on 1800 200 422.
You can go to https://www.myagedcare.gov.au/understanding-costs
How do I provide my information for assessment?
You will need to fill out a Department of Human Services form called - Permanent Residential Aged Care - Request for a combined Assets and Income Assessment (SA457) form to provide your income and asset information. Then return the form to the Department of Human Services (Centrelink) or the Department of Veterans' Affairs as per the instructions on the form.
10 February 2020
**** Net market value is NOT the replacement or insured value. It is the amount you would get if you sold the item(s). Even if the Department of Human Services or the Department of Veterans’ Affairs already has information about their value it can be important to update this information to take into account any changes in value. The value of your household contents and personal effects will be taken to be $10,000 if you do not provide an estimate.
If you are a member of a couple, the value of your income will be assessed as half the value of your combined income.
The same applies to assets, with your assets assessed as half the value of your combined assessed assets.
www.myagedcare.gov.au
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Approved providers are required to pay interest on a refundable deposit balance or accommodation bond balance for the period from the day after the resident leaves the care service until the refundable deposit balance or accommodation bond balance is refunded. The requirement to pay interest also applies to approved providers holding entry contributions in the event that an entry contribution balance is refunded after the time specified in the Formal Agreement.
Approved providers are required to pay interest at two different rates:
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Annual and Lifetime Caps –
Residential Care Overview:
From 1 July 2014 annual and lifetime caps apply to the means tested care fee for residential aged care. Once the annual cap has been reached a care recipient cannot be asked to pay the means tested care fee until the next anniversary of the date they first began receiving aged care. Annual caps reset each year on the anniversary of a care recipient’s entry into aged care. Once this reset occurs the care recipient will be required to pay the means tested care fee until the annual cap is reached again.
A lifetime cap is applied when the total income or means tested care fees paid by a care recipient over their lifetime in aged care reaches the threshold. Once reached, a care recipient cannot be asked to pay the means tested care fee in residential care or the income tested care fees in home care.
Please Note: The Department of Human Services will notify both the provider and care recipient in writing that the cap has been reached once they have processed the claim for the month in which the care recipient has reached the annual cap.
Basic daily fees, accommodation payments, accommodation contributions and fees for extra services are not included in the annual and lifetime caps. These fees remain payable after the caps have been reached. The annual and lifetime caps only apply to care recipients who entered care on or after 1 July 2014.
The new arrangements for caps will only apply to care recipients, who were in care prior to 1 July 2014, if they:
• leave their residential aged care home or home care package for more than 28 days (other than on approved leave) and then re-enter care; or
• choose to 'opt in' to the new fee arrangements when changing home care services or aged care homes after 1 July 2014.
In the case of a care recipient who was receiving home care before 1 July 2014, and moves into residential care after 1 July 2014, only the means tested care fees paid from the time the care recipient enters into residential care will count for the annual and lifetime caps.
Cap Thresholds:
The annual cap for means tested care fees is currently $27,754.52*. The lifetime cap for means tested care fees is currently $66,078.27*. The Department of Human Services calculate the cap by tallying the care subsidy reductions, (which equals the maximum amount of means tested care fees that the department has calculated can be charged for the care recipient) against the caps.
*Figures current as at 20 September 2019. Caps are indexed in March and September.
Does the Government pay the means tested care fee once a cap is reached?
The Department of Human Services will pay the care recipient’s means tested care fee by way of a subsidy increase to the service after the care recipient has reached a cap.
When are the service’s payments adjusted?
Caps are calculated as part of the monthly claim processing. Human Services does this by tallying the care subsidy reductions against the cap at the end of that month. The care recipient and service will be notified after this process in finalised. This means the resident continues to pay a means tested care fee for an interim period after the cap is reached. As part of our monthly claims processing, the subsidy for the month in which the care recipient meets the cap is increased and both the service and the care recipient are notified that the care recipient has reached the cap.
When is any refund payable determined and notified to care recipients?
Any payments made by a care recipient for the part of the month after the cap takes effect (where the subsidy adjustment hasn’t been made yet) will be refunded to the care recipient by the service, following notification to the service at the following quarterly review.
Who is responsible for notifying the care recipients?
The Department of Human Services will notify both the service and care recipient in writing that the annual cap has been reached once the claims for the claim month in which the care recipient has reached the annual cap are processed.
Do the annual and lifetime caps move with a care recipient if they move between providers?
Yes. The annual and lifetime caps follow a care recipient as they move between providers, services and care types. Means tested residential care and income tested home care package fees accrue against a person’s lifetime cap from the date of their first entry into home or residential care on or after 1 July 2014.
How will the provider know when a care recipient’s annual and lifetime caps have been reached?
The Department of Human Services will advise a care recipient and their provider when the recipient has reached their annual or lifetime cap following the processing of their monthly claim. Once the cap is reached, we will pay the means tested fees through subsidy payments to the provider, and the care recipient will pay the basic daily fee and/or any accommodation costs. In the case of the annual cap, means tested fees will commence again on the anniversary of the care recipient’s entry to aged care.
What happens if the care recipient has not had a means test assessment?
If a care recipient does not submit a means test assessment after two reminders from the Department of Human Services, the care recipient will be classified as means not disclosed and asked to pay the maximum fee based on their level of care until such time as they reach a cap. The care recipient may elect to submit a request for an assessment after being notified of the care fees payable. If as a result of the assessment, it is determined that lower fees are payable, these fees will be reconciled as a result of the quarterly review.
What happens if the care recipient elects not to have a means test assessment?
In some circumstances a care recipient may elect not to disclose their means. When this occurs the care recipient will pay the maximum fee based on their level of care until such time as they reach a cap.
What if a means test assessment is delayed due to complex financial affairs?
If a means test assessment is delayed due to complex financial affairs, no fee is set for the duration of the assessment as Human Services will initially pay for the care subsidies. When a care recipient enters residential care the service may choose to charge an interim fee while Human Services are determining the means tested fees. If, as a result of the assessment, it is determined that fees are payable for a backdated period (depending on the scenario), these fees will also count towards the cap. Any overpayments of an interim fee charged would need to be refunded. Similarly, regarding underpayments, the service will be able to seek any amounts owing from the care recipient.
Lump sum deposits operate like an interest free loan to residential aged care providers, accruing no interest income for the resident during their time in care. When the resident departs care, the lump sum deposit begins to attract interest, providing a benefit to the resident or their estate whilst the lump sum deposit is still held by the provider, and care services are no longer delivered.
https://agedcare.health.gov.au/sites/g/files/net1426/f/documents/07_2017/report_of_the_base_interest_rate_project.pdf
Accommodation refund upon departure from residential aged care
If the resident has paid a refundable accommodation deposit or an accommodation bond for their accommodation costs, approved providers are required to pay interest on the lump sum accommodation deposit for each day following the date of the resident’s departure from the service, until the date the lump sum accommodation deposit is refunded.
Interest is not paid for the day of the resident’s departure, but is payable for each day thereafter, including the date of repayment of the lump sum deposit, at two different rates.
1. The Base Interest Rate (currently 3.75 per cent) is applied to the refund of the balance of a lump sum deposit, until the date the lump sum deposit is actually refunded or the legislated timeframe for repayment expires, whichever is earlier; and
2. If the lump sum balance is not refunded within these timeframes, additional interest at the Maximum Permissible Interest Rate (currently 5.70 per cent) is applied until the lump sum is actually refunded.
There is a legislated timeframe for repaying lump sum accommodation payments. Approved providers are required to refund lump sum accommodation payments within the following timeframes:
· Where the resident passes away, the provider must refund the lump sum payment within 14 days after being shown the probate of the will or letters of administration;
· Where the resident moves to another service and the resident gives:
o more than 14 days of notice, the provider must refund the lump sum payment on the day the resident leaves the service; o notice within 14 days of departing, the provider must refund the lump sum payment within 14 days of the day the resident gave notice;
o no notice before departing, the provider must refund the lump sum payment within 14 days of the day the resident leaves;
· Where the resident leaves the service to return home, the provider must refund the lump sum payment within 14 days after the resident leaves the service;
· Where the service ceases to be certified, the lump sum payment must be refunded within 14 days of the date the service ceased to be certified. The BIR can apply for up to 14 days after the resident’s date of departure, or if the resident has passed away, up until 14 days after the approved provider is shown the probate of the will or letters of administration of the estate.
If the approved provider does not refund the lump sum payment within the legislated timeframes for repayment, the approved provider must pay interest at the Maximum Permissible Interest Rate for the period commencing from the day after the date the lump sum payment should have been refunded, and ending on the day the lump sum payment is repaid .
Allowing providers to request probate or letters of administration before refunding the lump sum balance provides important legal protection to the provider from refunding the lump sum to a person that is not the legal representative of the estate. Providers are not required to wait for probate or letters of administration however, and they may choose to make the refund earlier if they prefer. Providers can face risks in refunding the lump sum balance prior to probate being provided, such as refunding the lump sum to the wrong beneficiary, or in circumstances where the Will of the deceased resident is contested or the resident has died intestate .
The requirement to pay interest on the lump sum deposit from the date following the resident’s departure ensures that the resident or their estate is compensated for the time that the lump sum deposit is held by the provider whilst care is no longer being provided. Whilst providers are required to pay interest on the balance of the lump sum deposit held during this period, the provider is able to earn interest income on the amount owing during the whole time the deposit is held which can be used for service provision. The provider’s ability to earn interest needs to be balanced with the requirement for maintaining sufficient liquidity to enable the provider to repay lump sum accommodation balances as and when they fall due for repayment.
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Wanting Financial advice?
You may want to consult with a financial adviser about your finances. There are various Click here for Government services and resources that can help you obtain appropriate financial advice. It’s a good idea to do some research to see what options work best for you. You can also use Centrelink's free Financial Information Service on 132 300. Log onto humanservices website for a list of their upcoming information talks.
There are 2 ways to book a seminar.
You can email the FIS seminars booking team at least 3 days before the seminar. Don't forget to include:
14 August 2019
Facing Financial Hardship?
If you believe you would face financial hardship in paying the required fees and payments, you can ask to be considered for financial hardship assistance. Each case is considered on an individual basis.
Depending on your personal situation, you may apply for financial assistance with
Assessment of financial hardship assistance claims
https://www.humanservices.gov.au/individuals/forms/sa461
Use this form and guide to test your eligibility to receive financial hardship assistance with your fees and charges in Permanent Residential Aged Care.
18 July 2019
or for more information on fees and charges or financial assistance, call My Aged Care on 1800 200 422 or visit myagedcare.gov.au
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The new Aged Care Quality and Safety Commission began on January 1st, 2019.
Who do the Act and Rules apply to?
What changes can services and providers expect?
The new Rules look quite different due to the combined functions under the Act. However, while the Rules have combined a number of previously separate legislative instruments, the core processes are preserved.
Factsheets & FAQs
Aged Care - Flexible
Aged Care – Home and Community
Aged Care – Residential
Assessing services
If you would like to receive an e-mail when those details are available, you can join our mailing list.
Tuesday, 8 January 2019
It will have a budget of almost $300 million over four years, employing dozens of additional senior compliance officers. The new Commission will immediately absorb the roles of the current Aged Care Complaints Commissioner and the Australian Aged Care Quality Agency and, from January 2020, also take over the Department of Health's aged-care compliance responsibilities.
The next hearing will be held in Adelaide from Monday 18 March. It will focus on home care and the community. The following round, focusing on quality, safety and dementia, will be held in Sydney on 6 May.
Key Changes under the new Commission Act and Rules.
The new commissioners of the Royal Commission in to Aged Care Quality and Safety has written to the nation’s top 100 aged care operators, asking them to self-report on details of their operations. The request for information is the first step in the Royal Commission’s information gathering process. The deadline for providing information is January. Smaller operators will also be contacted, and will be given a later deadline.
The letters mark what will be a huge information-gathering process involving every aged care facility in Australia, and also begins a process of review for all operators of their own individual systems and processes.
08 January 2019
Providers need to be an incorporated entity to be registered with government to receive consumers’ government contributions. In a nutshell, all Commonwealth Home Support Program and home care providers will become ‘care at home’ registered providers. Some examples of registration types referred to in the Roadmap are:
PM announces $662 million funding package for aged care
As a royal commission into Australia’s aged care industry kicks into gear, the federal government has announced funding for the sector to the tune of $662 million. Prime Minister Scott Morrison on Sunday announced every Australian living in residential aged care will have an extra $1800 spent on their care over the next 18 months, with $320 million set to be rolled out to residential facilities.
The funding package includes:
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What if I am having trouble Coping?
If you need to talk to someone immediately, contact Lifeline (24 hours a day) on 13 11 14.
1 July 2021
New Aged care means assessment forms
The Department of Human Services (DHS) has released the new Aged Care Calculation of your cost of care (SA486) digital form. Your clients can fill it in online, print and sign it and send it to DHS with their supporting documents. The digital form uses dynamic questions tailored to the customers’ individual circumstances.
For clients who would prefer to use our simplified paper forms, they are as follows:
- Home Care Package Calculation of your cost of care (SA456)
- Residential Aged Care Calculation of your cost of care (SA457)
- Residential Aged Care Property details for Centrelink and DVA customers (SA485)
These forms are all available on the DHS website. Tips on how to download the digital form can be found here.
Aged care means tests: https://www.humanservices.gov.au/individuals/services/aged-care-means-tests
We assess your financial details to work out how much you need to pay towards aged care.
Customers commencing a Home Care Package don’t need to fill in a form if they get a means tested income support payment from Centrelink or DVA.
Customers entering Residential Care don’t need to fill in a form if they:
- get a means tested income support payment, and
- don’t own their own home.
It is important to make sure their income and assets are up to date when they enter into care to ensure their assessment can be completed automatically. They can do this by accessing their Centrelink online account or by calling Centrelink on 132 300 or DVA on 1800 555 254.
Department of Health
13 August 2019
What if I can't afford it? If you’re worried that you may not be able to afford your home care, residential respite care or permanent residential care costs, you can ask to be considered for financial hardship assistance. If you are eligible, the Australian Government will pay some or all of your aged care costs.
If you are receiving care through another aged care program, please speak to your provider.
Learn more about financial hardship assistance.
Can I seek financial advice? Yes, you can. In fact, it is recommended that you seek independent financial advice before deciding how to pay for your aged care.
Services Australia’s Financial Information Service (FIS) is a free service available to everyone. FIS officers can show you how to make informed financial decisions and help you to understand the financial implications of your aged care costs. They can also help you understand how different payment methods for residential care may affect your pension and aged care costs if you ever need to move into an aged care home.
To find out more about FIS, or to make an appointment, call 132 300 and say “Financial Information Service” when asked why you are calling.
For more information and guidance on financial matters, you can also visit our financial support and advice page.
How to get help for residential aged care
https://www.humanservices.gov.au/individuals/services/aged-care-means-tests/how-get-help-residential-aged-care
We assess your income and assets to work out how much you need to pay for residential aged care. We may include the value of your home in your assessment.
Jun 16, 2021 HEALTH & CARE
Is it worth selling my house if I’m going into aged care?
For senior Australians who cannot live independently at home, residential aged care can provide accommodation, personal care and general health care. People usually think this is expensive. And many assume they need to sell their home to pay for a lump-sum deposit. But that’s not necessarily the case. Here’s what you need to consider. https://hellocare.com.au/is-it-worth-selling-my-house-if-im-going-into-aged-care/
Schedule of Fees and Charges for Residential and Home Care: From 1 January 2022
This page provides the latest updates to aged care fees and charges.
[i] Residents in designated remote areas may be asked to pay an additional $1.06 per day.
[ii] This rate applies to residents who enter residential care within this time period but not to those who were already in care prior to this time period. The Maximum Permissible Interest Rate applicable for the calculation of a resident’s daily payments is fixed either at their date of entry to care (for a low means resident) or the date they agree to a room price (for a resident who is not eligible for government assistance with their accommodation costs).
and do remember that the daily care fee IS negotiable.
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Consent to share your information with your aged care provider
If you're in aged care, your aged care provider might ask us for your financial information.
https://www.humanservices.gov.au/individuals/services/aged-care-means-tests/what-you-need-know/consent-share-your-information-your-aged-care-provider
10 July 2019
Aged care homes:
If you are eligible for an aged care home, you may have to pay:
- a basic daily fee, or
- a basic daily fee and accommodation costs, or
- a basic daily fee and a means-tested care fee and accommodation costs.
Find out more about these and other fees on the aged care homes costs and fees page:
Government help with accommodation costs:
If you can afford it, you are expected to pay for your room. However, help with some or all of the accommodation costs is available to those that need it. This is determined by an income and assets assessment, but as a general guide:
- if you have income below $27,460 and assets below $49,500, the Australian Government will pay your accommodation costs
- if you have income above $69,430 or assets above $169,079.20, you will need to pay for the full cost of your accommodation, negotiated and agreed to with the aged care home
- if you need to pay for part of your accommodation, the Australian Government will pay the rest.
Calculate how much you may pay using our residential care fee estimator..
Costs for aged care homes vary depending on your circumstances and the level of care you need.
If you are moving from home care into an aged care home, any income-tested care fee you paid while you were receiving care at home will also be counted towards the annual and lifetime cap if you move into an aged care home.
The basic daily fee is 85% of the single person rate of the basic age pension.
From 20 March 2019, the single rate of the basic age pension is $843.60 per fortnight, making the basic daily fee (from 20 March 2019 to 19 September 2019):
$51.21 per day; or
$716.94 per fortnight.
This amount is indexed with the age pension. This applies even if you are a member of a couple.
https://www.myagedcare.gov.au/aged-care-home-costs-and-fees
Schedule of Fees and Charges for Residential and Home Care: From 1 July 2021
This page provides the latest updates to aged care fees and charges.
[i] Residents in designated remote areas may be asked to pay an additional $1.06 per day.
[ii] This rate applies to residents who enter residential care within this time period but not to those who were already in care prior to this time period. The Maximum Permissible Interest Rate applicable for the calculation of a resident’s daily payments is fixed either at their date of entry to care (for a low means resident) or the date they agree to a room price (for a resident who is not eligible for government assistance with their accommodation costs).
and do remember that the daily care fee IS negiotable.
The Protection of Residential Aged Care Accommodation Lump Sum Accommodation Payments
https://agedcare.health.gov.au/reform/the-protection-of-residential-aged-care-accommodation-lump-sum-accommodation-payments
There are annual and lifetime caps on means-tested care fees. The maximum an aged care home can charge you is:
- $27,754.52 per year, or
- $66,610.90 in a lifetime.
What are ‘fixed’ costs?
- Care costs that are not tailored to individual resident needs.
- Care costs that are not affected by changes in the needs of individual residents:
- Direct – eg, night staffing, dining room supervision
- Indirect – eg, clinical educators, care co-ordinators, quality managers, infection control, remote salary loadings, staff leave.
- May vary based on location, size, specialisation of facility
- Actual proportions of fixed and variable cost will come from resource utilisation study.
and that Adjustment payment
- One–off initial payment
- Time-limited costs involved with residents transitioning into care, eg:
- Time spent getting to know the resident and their family
- Individualised care planning
- Behaviour management
- Health care assessments
- Facilitating health care arising from assessments:
- Pain control, dental care, palliative care etc
- Developing an advanced care directive in partnership with the resident and their family
Payment and Service Finder A-Z - services
Aged Care Fees Income Assessment form (SA456)
Use this form to give us details about your income:
https://www.myagedcare.gov.au/fee-estimator/residential-care/form
To ask for an assessment, complete the Permanent Residential Aged Care - Request for A Combined Assets and Income Assessment (SA457) form.
The aged care fees income assessment asks for details about your income so we can advise you of your income tested aged care fees if:
• your Home Care Package has started on or after 1 July 2014, or
• your permanent residential aged care admission commenced before 1 July 2014.
Your centrelink payments when you go into aged care
https://www.humanservices.gov.au/individuals/services/aged-care-means-tests/you-need-know/your-centrelink-payments-when-you-go-aged-care
11 January 2019
Your Residential Care Fee Estimator for people entering residential care from 1 July 2014 onwards:
https://www.myagedcare.gov.au/fee-estimator/residential-care/form
For the latest updates to aged care fees and charges: As a result of the aged care reforms, from 1 July 2014 changes will be made to the way certain care fees are calculated in residential and home care and to how accommodation prices are charged. The new arrangements will only apply to residents and consumers of a home care package entering or commencing care on or after 1 July 2014.
Schedule of Fees and Charges for Residential and Home Care: From 1 July 2021
This page provides the latest updates to aged care fees and charges.
[i] Residents in designated remote areas may be asked to pay an additional $1.06 per day.
[ii] This rate applies to residents who enter residential care within this time period but not to those who were already in care prior to this time period. The Maximum Permissible Interest Rate applicable for the calculation of a resident’s daily payments is fixed either at their date of entry to care (for a low means resident) or the date they agree to a room price (for a resident who is not eligible for government assistance with their accommodation costs).
and do remember that the daily care fee IS negotiable.
Your aged care fees are reviewed quarterly and become effective each year on:
- 1 January
- 20 March
- 1 July, and
- 20 September
- aligns the aged care fees you pay with changes to your care needs or financial circumstances
- sets your aged care fees for the next quarter, and
- calculates any aged care fee refunds that may be due
A basic fee – paid by all people who receive residential care. For some people, this is the only fee they may need to pay.
- All residents are asked to pay a daily fee as a contribution towards their:
- cost of care and
- living expenses, like meals and refreshments,
- cleaning,
- laundry,
- heating and cooling,
- as well as social activities.
- In addition, the daily fee contributes to the costs for personal care including assistance with daily living like:
- bathing,
- dressing and toileting;
- assistance with mobility aids,
- therapy and certain medical and pharmaceutical services.
There is a maximum level that the Australian Government sets for the Basic Daily Fee.
Depending on their income and level of care, residents (other than respite residents) may also be asked to pay an income tested fee as part of their daily fees.
A means tested care fee - an extra contribution towards the cost of care that some residents may need to pay, on top of the basic fee, depending on income and assets. The Department of Human Services (Centrelink) or Department of Veterans' Affairs (DVA) will work it out if you are required to pay this fee based on an assessment of your income and assets, and will advise you of the amount.
The assessment is valid for 120 days, but if your circumstances change during that time, such as marital status, homeownership or financial changes, it is important you notify Centrelink or DVA (if applicable).
To find out more about the assessment process, or to obtain copies of the relevant form, call 1800 227 475 or visit
Permanent Residential Aged Care - Request for a Combined Assets and Income Assessment form (SA457)
https://www.humanservices.gov.au/individuals/forms/sa457
28 June 2019
Income and assets testing (applied as from 1 July 2014): Residents who can afford to will pay a basic fee of up to 85% of the single basic pension, a means tested contribution to their accommodation and a means tested contribution to their care.
The maximum means tested contribution will be allocated toward the resident’s accommodation payment until the full cost is paid and then toward their care fee.
No one will need to pay a care fee greater than the cost of their care. In addition, an annual cap of $27,532.59 (indexed) will apply to a resident’s means tested contribution to their care costs, together with a lifetime cap of $66,078.27 (indexed) for means tested care fees.
***** Any income tested contributions residents may have made when they were recipients of Home Care Packages will be taken into account in calculating lifetime care expenditure.
The treatment of the family home will not change from current arrangements ie if it is occupied by a spouse or protected person. ie. The net value of the home above this amount is excluded from the value of the resident's assets, instead, a capped amount of $166.707.20 will be included or the net market value of your house, if lower.
NOTE: The family home is not included in calculating the value of your assets if, when you enter care, it is occupied by your spouse or a dependent child, or a close relative or carer has lived in the home for a prescribed number of years. To satisfy this condition, the close relative or carer must be eligible for an income support payment. Do be aware though that when/should the time come when the spouse/dependent person have to go into care themselves/sell the home/downsize, that your daily means tested amount will vary if the income or value of assets changes after your admission to care. Thus, the fees and charges that you negotiated at your admission to the aged care home, may change.
Since 1 January 2016, the current exemption from the aged care means test of rental income from an aged care resident’s former home (where that resident pays at least part of their accommodation costs by periodic payments) was removed.
New entrants to residential aged care will have their net rental income from their former home assessed under the aged care means test. Visit the aged care means test. Use this form to give Aged Care or the Department of Veterans Affairs details about your combined assets and income for permanent residential aged care purposes.
18 July 2019
This change only impacts new entrants to residential aged care since 1 January 2016. Customers who enter aged care before this date will not be affected. The removal of the rental income exemption will only affect aged care means testing. This change will not affect the means test for income support payments.
Since 1 January 2016, if you are formally discharged from Residential Care for more than 28 days, rental income from your former principal home will be included in the aged care means test when you re-enter care.
An accommodation payment - a payment for accommodation in an aged care home. Some people will have their accommodation costs paid in full, or in part, by the Australian Government. Others will need to pay the accommodation price they negotiate with their aged care home. Centrelink will advise you which applies to you based on an assessment of your income and assets.
Accommodation payments are different from daily care fees. They are used by the aged care home as capital funding to improve the quality of the buildings and services they provide. Not everyone pays an accommodation payment. It depends on the value of your assets at the time of entry into care.
Minimum permissible asset level - this is the minimum amount of assets a resident must be left with if they pay at least part of their accommodation costs by refundable deposit $49,500.
Maximum refundable accommodation deposit Amount that can be charged without prior approval from the Aged Care $550,000.
Asset Threshold Residential Care Means Test
Asset Free Threshold $49,500
First Asset Threshold $169,079.20
Second Asset Threshold $408,237.60
Home Exemption Cap (applies separately to both members of a couple). The net value of the home above this amount is excluded from the value of the resident's assets.
- the family home up to a cap of $169,079.20. The net value of the home above this amount is excluded from the value of the resident's assets.
Income Free Area (annual amount) Home Care and Residential Care
Annual income up to these amounts is excluded from the income test component of the residential means test and the income test in home care. To calculate the equivalent fortnightly income divide by 26.
Income Free Area (single person) $27,463.80
Income Free Area (Couple, Illness separated, single rate) $26,943.80
Income Free Area (Couple, Living together, single rate) $21,294.00
Asset Thresholds Residential Care Means Test
Asset Free Threshold $49,500
First Asset Threshold $169,079.20
Second Asset Threshold $408,237.60
Cap on Means Tested Care Fees in Residential Care
Annual Cap $27,754.52
Lifetime Cap on Means Tested Care Fees in Residential Care $66,610.90
Maximum Accommodation Supplement Amount $57.49
Q: Can a consumer roll over their accommodation payment when they move facilities?
https://agedcare.health.gov.au/aged-care-reform/residential-care-and-home-care-frequently-asked-questions
18 July 2019
A: No. Under the Aged Care Act 1997, the accommodation payment must be refunded ‘if the care recipient is to enter another service to receive residential care’.
Prior to entry to a new service, a resident subject to the 1 July 2014 fee arrangements will need to negotiate and agree an accommodation price with their new provider. The new provider cannot charge an accommodation price that is greater than their advertised price.
Unlike the arrangements in place in respect of bonds paid before 1 July 2014, where residents who paid an accommodation bond could have the bond balance transferred to the second aged care home, accommodation payments are not ‘automatically’ rolled over where a resident moves to a new service.
Fees for extra or additional optional services – an extra payment residents can be asked to pay if a higher standard of accommodation is chosen or to get additional services such as hairdressing or Foxtel or Wireless Internet... in rooms. Note: you can 'opt out' of receiving these services. Charges can be made if the room you have chosen has eg. a special handle for the tap, or easy to open door handles... Ask.
However, you will always have access to the services you need, regardless of your financial situation. You will never be denied a service you need because you can't afford it.
What are ‘fixed’ costs?
- Care costs that are not tailored to individual resident needs.
- Care costs that are not affected by changes in the needs of individual residents:
- Direct – eg, night staffing, dining room supervision
- Indirect – eg, clinical educators, care co-ordinators, quality managers, infection control, remote salary loadings, staff leave.
- May vary based on location, size, specialisation of facility
- Actual proportions of fixed and variable cost will come from resource utilisation study.
Financial hardship assistance for permanent residential care (aged care homes)
You may be granted financial hardship assistance to have your basic daily fee, means-tested care fees and/or accommodation costs reduced. Financial hardship assistance is not granted for extra and additional service fees.
Eligibility for financial hardship assistance
You will not be eligible for financial hardship assistance if you have:
- not completed and lodged an Aged care fees income assessment (SA456) form (for home care packages and residential respite care) or a Permanent Residential Aged Care - request for a combined assets and income assessment form (SA457) Human Services (DHS) or the Department of Veterans’ Affairs
- assets (unless they are unrealisable assets) valued at more than $36,121.80 (from 20 March 2019)
- gifted:
- more than $10,000 in the previous 12 months, or
- more than $30,000 in the previous 5 years.
Unrealisable assets
An asset may be considered unrealisable if you cannot sell or borrow against it. Asset(s) may be unrealisable if it is:
• a house, which cannot be sold and a bank will not loan money against it
• a compensation payment
• a farming property or properties
• a frozen asset
• a jointly owned asset where the other person is not willing to sell the asset
• misappropriation of funds
• a retirement village property, and
• it is unreasonable to sell an asset.
The following situations are not unrealisable for financial hardship purposes:
• rented properties, and
• private trusts and private companies.
A house which cannot be sold or a loan taken out against it
A resident cannot sell or borrow against their house if the house is on the market but cannot attract a buyer and the asking price is no higher than 10 per cent above the assessed assets test.
A resident who is in temporary hardship and is not expected to sell their home may be able to borrow against their home to alleviate hardship.
The resident is only expected to borrow from banks, finance companies and similar institutions with whom they normally invest or with a government body set up specifically to assist certain businesses.
If the resident claims they have tried to borrow against their house but have had their loan application rejected, evidence of their unsuccessful attempt to borrow is not required. You must provide the following evidence:
• valuations from 3 real estate agents
• proof of the sale price
• proof showing the property has been actively on the market for at least 6 months.
Jointly owned property Jointly owned properties (other than your partner), other than the family home, may be considered unrealisable if the other owner does not wish to sell the jointly owned property. You must provide a copy of the title deed or rates notice showing joint ownership of the property. Also statement(s) from the other property owner(s) that they do not wish to sell the property
If you have assets valued at more than $36,121.80, you may be able to apply for an asset to be declared as ‘unrealisable’ as part of your hardship assessment. An asset is considered unrealisable if you cannot sell it or borrow against it.
Essential expenses
If you meet the above criteria, DHS will check to see how much income you have access to after you have paid all of your essential expenses. If you have access to more than 15 per cent of the basic age pension amount (or $125.16 per fortnight as at 20 September 2018), you may not be eligible for financial hardship assistance.
Residential care
Essential expenses include, but are not limited to:
- resident fees
- rent or mortgage repayments for the principal home where your partner or a dependent child lives
- private health insurance
- ambulance cover
- medical expenses, including expenses incurred under a health professional’s direction
- transport costs to go to medical appointments
- dental care
- prescription glasses (one pair per year) or contact lenses
- artificial limbs, eyes or hearing aids for amounts that are not already covered by other government schemes or programs
- wheelchair and mobility aids
- regular funeral plan payments.
You cannot include:
- extra service fees
- amounts paid for additional care and services
- amounts spent by a person, authorised to act on your behalf, other than for your benefit.
- Financial hardship assistance for Home Care and Residential Respite Care form (SA462), or
- Financial hardship assistance for Residential Aged Care form (SA461)
If we agree to give you financial assistance, it starts from the day we get your application. Normally we can help for up to 12 months. How long you can get help for depends on how bad your money problems are. We decide this when you apply.
If you still need help you can apply again. It’s best if you do this before the current financial assistance ends. If not you’ll have to pay your fees while we’re checking your application.
********* Frequently asked questions:
Q: Does a resident’s DAP need to be re-calculated each time the maximum permissible interest rate (MPIR) changes?
A: No. The MPIR used to work out the equivalence between a refundable deposit and daily payment amounts for a resident is that which is current on the day the resident agreed an accommodation payment with the aged care home. The same MPIR continues to apply unless the person subsequently moves rooms within the aged care home.
Q: What can be deducted from a RAD?
A: If a resident has paid a refundable deposit, the provider must deduct DAPs at the resident’s request. Other amounts – such as care fees or the costs of additional services – may be deducted, if agreed between the resident and the provider. This must be set out in writing.
Q: Can a resident agree to an accommodation price that is greater than their net assets?
A: Yes. The new accommodation payments arrangements give residents and providers the flexibility to negotiate an accommodation price that is greater than a resident’s net assets. Residents can choose to pay for their accommodation by a lump-sum refundable deposit, rental-style daily payments, or a combination of both.
The combination method allows residents to pay a partial refundable deposit, ensuring that they are left with the minimum permissible asset level (currently $45,500), and then pay the balance of the agreed price by daily payments. Residents can elect to have the daily payments deducted from the refundable deposit.
Q: How long does a resident have to pay a RAD?
A: A resident has 28 days from the date they enter the facility to decide how to pay for their accommodation. If within those 28 days they make a decision to pay a RAD, they have 6 months to pay. If they make a decision after those 28 days to pay a RAD, it is due as agreed between the provider and the resident. A resident must pay a DAP until the RAD is paid.
Moving rooms within a facility
Q: Can a resident be moved if they entered into a facility on the assumption they would be paying an accommodation price agreed with the provider but were found to be low means or vice versa?
A: The User Rights Principles 2014 oversee the circumstances when a resident can be moved within the same facility. In order to meet the requirements in the Principles, the provider will need to have discussed with the consumer the information covered in the agreement at the time the resident is entering care. In particular the provider will need to be sure that the resident understands that the room he or she occupies may depend on the fee advice received from the Department of Human Services (DHS), and that the resident may be moved after entry once the fee advice has been received or if it is corrected.
Please see the following scenarios which seek to demonstrate how a provider would meet his or her obligations prior to the resident entering care in order to subsequently move the resident in response to an amended or corrected fee advice.
Example 1 – Amelia
Amelia has entered a residential aged care facility. She completed her combined income and asset assessment prior to entering care, and has an initial fee advice which indicates that the Government will pay her accommodation costs.
Prior to entering care, Amelia’s provider discussed with her and her family the two possibilities of which room she would occupy depending on whether the fee advice from DHS classified Amelia as a low means resident or an accommodation payment resident and the outcomes of each situation. Even though Amelia had a fee advice which indicated that she could not be asked to pay an accommodation payment, Amelia and her provider agreed a price and specified the room that would be provided at that price. The information was also included in the accommodation agreement between Amelia and her provider.
When Amelia first enters care, her provider accommodates her in a shared room. Two weeks after Amelia enters care she receives a revised initial fee advice and her provider receives an initial fee advice indicating that Anna is liable to pay an accommodation payment – that is the price agreed with the provider. The ‘protected person’ who had been living in Amelia’s house moved out before Amelia entered care which meant that Amelia’s former home was no longer an exempt asset.
Amelia begins to pay the agreed accommodation price and her provider moves her to the room specified in this agreement since the move had previously been discussed and agreed between Amelia and her provider at the time she entered into the accommodation agreement.
Example 2 - Sam
Sam has entered a residential care facility, but did not have the results of his combined income and asset assessment prior to entry. As Sam and his provider wait for the means test results, Sam’s provider considers him to be able to pay an accommodation payment and he is accommodated in a private room with an ensuite.
Before Sam entered care, Sam’s provider discussed with him and his family the two possibilities of which room Sam would occupy depending on whether the fee advice from DHS classified Sam as a low means resident or an accommodation payment resident and the outcomes of each situation. Sam and his provider agreed a price and specified the room that would be provided at that price. The information was also included in the accommodation agreement between Sam and his provider.
Until Sam’s means are known Sam’s provider charges him the agreed accommodation price.
DHS subsequently sends a fee advice letter to Sam and his provider advising that Sam is eligible for Government assistance with his accommodation costs and so he cannot be charged the price agreed with the provider.
Sam’s provider is able to move Sam to another room in the same facility equivalent to his classification as a low means resident since this move had previously been discussed and agreed between Sam and his provider. Sam’s provider is also required to refund the accommodation payment amounts that Sam had previously paid (net of any accommodation contributions he would instead be required to have paid in that period).
Example 3- Phil
Phil has moved into a residential care facility and has been assessed by DHS as a low means resident. However, due to renovations at the residential care facility, the only room available is a room with a published price of $350,000.
Phil’s provider had previously discussed with Phil and his family that Phil will be accommodated in the room priced at $350,000 while renovations take place and he will be moved to another room once renovation is complete. This was also included in the accommodation agreement and Phil had agreed with these conditions. Phil’s provider cannot charge him more than the lower of the maximum accommodation supplement for their facility or the accommodation contribution advised by DHS.
Phil’s provider can now move him into the new room once it becomes available as this move had previously been discussed and agreed to between Phil and his provider.
Q: If a resident who was in care on 30 June 2014 wants to move to a new room within the facility, can they be asked to pay a higher price than the accommodation bond that they have paid (i.e. up to the published price of the new room)?
A: Residents who were in care on 30 June 2014 continue to be covered by the arrangements in force on that date, unless they leave care for more than 28 days (other than on approved leave) or move to a new facility and elect to be covered by the new arrangements.
This means that if the resident was in care on 30 June 2014 and moves rooms within a facility, they continue to be covered by the rules about accommodation charges and bonds in force on that date, and cannot be asked to pay more than the bond that they previously agreed to. The published price of the room the resident wants to move into would be irrelevant, as the new rules about accommodation payments only apply to residents who entered care on or after 1 July 2014.
Q: Can a resident who entered care on or after 1 July 2014 be asked to pay a higher accommodation price if they want to move to a new room with a higher published price?
A: If a resident (who entered care on or after 1 July 2014) moves rooms within a facility, they may be charged an accommodation price that is higher or lower than the amount that they were paying, as long as the move is voluntary. The accommodation agreement must be varied to specify the new price and new room or part of room.
The new agreed price for the new room cannot be more than the maximum price that was published for that (new) room on the day that the agreement was varied. It is the maximum permissible interest rate (MPIR) current on the day that the accommodation agreement is varied that must be used to calculate the equivalence between the refundable deposit and daily payment amounts for the new room. If the accommodation payment for the new room is higher than the amount previously being paid, the resident may choose to pay the additional amount by daily payments, by a refundable deposit, or by a combination of both.
If the accommodation payment for the new room is lower than the amount previously being paid, and the resident has paid a refundable deposit, the provider must refund any excess balance to the resident.
Q: Can a resident be asked to pay a higher accommodation price if the move is not voluntary?
A: No. If a resident (who entered care on or after 1 July 2014) moves rooms, but the move is not voluntary, they cannot be asked to pay a higher accommodation payment than they were previously paying, even if the published price for the new room is higher.
If the price for the room (that was published on the day that the notice to move was given to the resident) is lower than the amount the resident was previously paying, then they cannot be asked to pay more than that published amount. It is the maximum permissible interest rate (MPIR) applicable on the day that the notice to move is given to the resident that must be used to calculate the equivalence between the refundable deposit and daily payment amounts for the new room.
A move is not voluntary if:
- the move is necessary on genuine medical grounds as assessed by:
- an aged care assessment team; or
- at least 2 medical or other health practitioners who meet the criteria below; or
- the place occupied by the person becomes an extra service place and the person elects not to pay the extra service fee; or
- the move is necessary to carry out repairs or improvements to the premises of the service.
- one practitioner must be independent of the approved provider and the residential care service, and must be chosen by the person; and
- both practitioners must be competent to assess the aged care needs of the person.
Refundable Deposit Balance and Accommodation Bond Balance Refund Interest Rates
16 August 2019
Approved providers are required to pay interest on a refundable deposit balance or accommodation bond balance for the period from the day after the resident leaves the care service until the refundable deposit balance or accommodation bond balance is refunded. The requirement to pay interest also applies to approved providers holding entry contributions in the event that an entry contribution balance is refunded after the time specified in the Formal Agreement.
- Interest rates
- The Base Interest Rate
- The Maximum Permissible Interest Rate
- Legislated timeframes for refunding refundable deposit balances and accommodation bond balances
- More information
Relevant rates and thresholds for refundable deposits and daily payments
Maximum Permissible Interest Rate for all new residents from 1 July 2019 - 30 September 2019 5.54%
- for all new residents from
1 October 2019 - 31 December 2019 4.98%
Base Interest Rate - 1 August 2019 3.00%
Minimum permissible asset level - this is the minimum amount of assets a resident must be left with if they pay at least part of their accommodation costs by refundable deposit $49,500
Maximum refundable accommodation deposit Amount that can be charged without prior approval from the Aged Care Pricing Commissioner $550.000
- if a resident dies, the provider must refund the refundable deposit balance or accommodation bond balance within 14 days after being shown probate or letters of administration.
Lump sum deposits operate like an interest free loan to residential aged care providers, accruing no interest income for the resident during their time in care. When the resident departs care, the lump sum deposit begins to attract interest, providing a benefit to the resident or their estate* whilst the lump sum deposit is still held by the provider, and care services are no longer delivered.
https://lasa.asn.au/wp-content/uploads/2019/02/LASA-2019-20-Budget-Submission.pdf
Their estate*
If the resident has passed away, up until 14 days after the approved provider is shown the probate of the will or letters of administration of the estate. If the approved provider does not refund the lump sum payment within the legislated timeframes for repayment, the approved provider must pay interest at the Maximum Permissible Interest Rate for the period commencing from the day after the date the lump sum payment should have been refunded, and ending on the day the lump sum payment is repaid.
Allowing providers to request probate or letters of administration before refunding the lump sum balance provides important legal protection to the provider from refunding the lump sum to a person that is not the legal representative of the estate. Providers are not required to wait for probate or letters of administration however, and they may choose to make the refund earlier if they prefer. Providers can face risks in refunding the lump sum balance prior to probate being provided, such as refunding the lump sum to the wrong beneficiary, or in circumstances where the Will of the deceased resident is contested or the resident has died intestate.
The requirement to pay interest on the lump sum deposit from the date following the resident’s departure ensures that the resident or their estate is compensated for the time that the lump sum deposit is held by the provider whilst care is no longer being provided.
Whilst providers are required to pay interest on the balance of the lump sum deposit held during this period, the provider is able to earn interest income on the amount owing during the whole time the deposit is held which can be used for service provision. The provider’s ability to earn interest needs to be balanced with the requirement for maintaining sufficient liquidity to enable the provider to repay lump sum accommodation balances as and when they fall due for repayment.
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Finding a Residential Care Home in your area:
Have a look here for Nursing Homes in your area: https://www.myagedcare.gov.au/find-a-provider/aged-care-homes
Choose the ones you think you may be interested in and click under “Compare providers”
You will see a comprehensive comparison. Remember, you can go back again and again until you feel you have a good understanding of each. Print out the ones you like.
Now, armed with this knowledge, actually Visit each of your chosen selections
Tip – don’t just ring and ask for an appointment, just turn up unexpectedly, introduce yourself, and ask to see over the place. And SMILE, and remember to ask awkward questions too…
But DON'T go alone. Do have a friend drive you, and come in with you. This IS a highly emotional time. You will feel apprehensive, dread, have the feeling that you are betraying your loved one, and an overwhelming sense of guilt. But you will do it because your loved one Needs YOU to do this.
And as you come out the front door again, immediately write down all your impressions, both good and bad. These notes are what will help guide you and your family to make the best decision; the best outcome for your loved one.
And remember, this decision is Not set in stone. If your loved one does not like the place, they can move...
To immediately find a list of possible vacancies in Your Area, click here.
Inform yourself and your loved one. Your nursing home Checklist.
and
Is what you see, what you get? Ask those awkward questions.
http://www.agedcarecrisis.com/resources/nursing-home-checklist#care-and-services-what-s-included-extra-charges
If your income and assets are over a certain amount you may be asked to make an accommodation payment that you agree with the home. Otherwise the Australian Government will pay for part or all of your accommodation costs.
The Department of Human Services will advise you if you are required to make an accommodation payment.
This tab provides the maximum price (accommodation payment) you may be asked to pay when entering a home after 1 July 2014, you may be able to negotiate a lower price with the home.
This tab also provides details on any additional care or services that may be offered by the home, either as part of the accommodation price or available at an additional cost.
- for example:
- Single Type A: max. refundable deposit $ or max. daily payments of $
- Single Type B: max. refundable deposit $ or max. daily payments of $
- Single Type C: max. refundable deposit $ or max. daily payments of $
- Share Type A: max. refundable deposit $ or max. daily payments of $
- Share Type B: max. refundable deposit $ or max. daily payments of $
How do I work it out?
Residential Care – Fee Estimator
The Residential Care Fee Estimator and click on Aged Care Homes provides an indication of the fees and charges you may be asked to pay while living in an aged care home. Based on the information you provide, it estimates your;
Means Tested Care Fee Your aged care home provider may ask you to pay a means-tested care fee. This will vary based on your assessed income and assets. This is in addition to the:
- basic daily fee
- accommodation costs
- fees for extra and additional services
The actual fees you may be asked to pay will depend on your personal situation, the time you enter care, the information you provide to the relevant Australian Government Departments and your personal and financial information at the time of the assessment.
My Aged Care - Phone 1800 200 422 can assist you with using these fee estimators or can provide you with an estimate over the phone. Before you call you should have your financial information ready, especially details of your various forms of income and assets.
For more information on aged care costs call My Aged Care on 1800 200 422.
You can go to https://www.myagedcare.gov.au/understanding-costs
How do I provide my information for assessment?
You will need to fill out a Department of Human Services form called - Permanent Residential Aged Care - Request for a combined Assets and Income Assessment (SA457) form to provide your income and asset information. Then return the form to the Department of Human Services (Centrelink) or the Department of Veterans' Affairs as per the instructions on the form.
10 February 2020
**** Net market value is NOT the replacement or insured value. It is the amount you would get if you sold the item(s). Even if the Department of Human Services or the Department of Veterans’ Affairs already has information about their value it can be important to update this information to take into account any changes in value. The value of your household contents and personal effects will be taken to be $10,000 if you do not provide an estimate.
If you are a member of a couple, the value of your income will be assessed as half the value of your combined income.
The same applies to assets, with your assets assessed as half the value of your combined assessed assets.
www.myagedcare.gov.au
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Approved providers are required to pay interest on a refundable deposit balance or accommodation bond balance for the period from the day after the resident leaves the care service until the refundable deposit balance or accommodation bond balance is refunded. The requirement to pay interest also applies to approved providers holding entry contributions in the event that an entry contribution balance is refunded after the time specified in the Formal Agreement.
Approved providers are required to pay interest at two different rates:
- at the Base Interest Rate (BIR) for the period between a resident’s departure and the completion of the legislated timeframe for refunding the refundable deposit balance or accommodation bond balance. It is not payable for the day of departure, but for each day after the resident has departed the service until the refundable deposit balance or accommodation bond balance is refunded or the legislated timeframe expires; and
- at the Maximum Permissible Interest Rate (MPIR) for the period after the end of the legislated timeframe (or, for entry contributions, the time set out in the Formal Agreement) until the refundable deposit balance or accommodation bond balance or entry contribution balance is refunded.
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Annual and Lifetime Caps –
Residential Care Overview:
From 1 July 2014 annual and lifetime caps apply to the means tested care fee for residential aged care. Once the annual cap has been reached a care recipient cannot be asked to pay the means tested care fee until the next anniversary of the date they first began receiving aged care. Annual caps reset each year on the anniversary of a care recipient’s entry into aged care. Once this reset occurs the care recipient will be required to pay the means tested care fee until the annual cap is reached again.
A lifetime cap is applied when the total income or means tested care fees paid by a care recipient over their lifetime in aged care reaches the threshold. Once reached, a care recipient cannot be asked to pay the means tested care fee in residential care or the income tested care fees in home care.
Please Note: The Department of Human Services will notify both the provider and care recipient in writing that the cap has been reached once they have processed the claim for the month in which the care recipient has reached the annual cap.
Basic daily fees, accommodation payments, accommodation contributions and fees for extra services are not included in the annual and lifetime caps. These fees remain payable after the caps have been reached. The annual and lifetime caps only apply to care recipients who entered care on or after 1 July 2014.
The new arrangements for caps will only apply to care recipients, who were in care prior to 1 July 2014, if they:
• leave their residential aged care home or home care package for more than 28 days (other than on approved leave) and then re-enter care; or
• choose to 'opt in' to the new fee arrangements when changing home care services or aged care homes after 1 July 2014.
In the case of a care recipient who was receiving home care before 1 July 2014, and moves into residential care after 1 July 2014, only the means tested care fees paid from the time the care recipient enters into residential care will count for the annual and lifetime caps.
Cap Thresholds:
The annual cap for means tested care fees is currently $27,754.52*. The lifetime cap for means tested care fees is currently $66,078.27*. The Department of Human Services calculate the cap by tallying the care subsidy reductions, (which equals the maximum amount of means tested care fees that the department has calculated can be charged for the care recipient) against the caps.
*Figures current as at 20 September 2019. Caps are indexed in March and September.
Does the Government pay the means tested care fee once a cap is reached?
The Department of Human Services will pay the care recipient’s means tested care fee by way of a subsidy increase to the service after the care recipient has reached a cap.
When are the service’s payments adjusted?
Caps are calculated as part of the monthly claim processing. Human Services does this by tallying the care subsidy reductions against the cap at the end of that month. The care recipient and service will be notified after this process in finalised. This means the resident continues to pay a means tested care fee for an interim period after the cap is reached. As part of our monthly claims processing, the subsidy for the month in which the care recipient meets the cap is increased and both the service and the care recipient are notified that the care recipient has reached the cap.
When is any refund payable determined and notified to care recipients?
Any payments made by a care recipient for the part of the month after the cap takes effect (where the subsidy adjustment hasn’t been made yet) will be refunded to the care recipient by the service, following notification to the service at the following quarterly review.
Who is responsible for notifying the care recipients?
The Department of Human Services will notify both the service and care recipient in writing that the annual cap has been reached once the claims for the claim month in which the care recipient has reached the annual cap are processed.
Do the annual and lifetime caps move with a care recipient if they move between providers?
Yes. The annual and lifetime caps follow a care recipient as they move between providers, services and care types. Means tested residential care and income tested home care package fees accrue against a person’s lifetime cap from the date of their first entry into home or residential care on or after 1 July 2014.
How will the provider know when a care recipient’s annual and lifetime caps have been reached?
The Department of Human Services will advise a care recipient and their provider when the recipient has reached their annual or lifetime cap following the processing of their monthly claim. Once the cap is reached, we will pay the means tested fees through subsidy payments to the provider, and the care recipient will pay the basic daily fee and/or any accommodation costs. In the case of the annual cap, means tested fees will commence again on the anniversary of the care recipient’s entry to aged care.
What happens if the care recipient has not had a means test assessment?
If a care recipient does not submit a means test assessment after two reminders from the Department of Human Services, the care recipient will be classified as means not disclosed and asked to pay the maximum fee based on their level of care until such time as they reach a cap. The care recipient may elect to submit a request for an assessment after being notified of the care fees payable. If as a result of the assessment, it is determined that lower fees are payable, these fees will be reconciled as a result of the quarterly review.
What happens if the care recipient elects not to have a means test assessment?
In some circumstances a care recipient may elect not to disclose their means. When this occurs the care recipient will pay the maximum fee based on their level of care until such time as they reach a cap.
What if a means test assessment is delayed due to complex financial affairs?
If a means test assessment is delayed due to complex financial affairs, no fee is set for the duration of the assessment as Human Services will initially pay for the care subsidies. When a care recipient enters residential care the service may choose to charge an interim fee while Human Services are determining the means tested fees. If, as a result of the assessment, it is determined that fees are payable for a backdated period (depending on the scenario), these fees will also count towards the cap. Any overpayments of an interim fee charged would need to be refunded. Similarly, regarding underpayments, the service will be able to seek any amounts owing from the care recipient.
Lump sum deposits operate like an interest free loan to residential aged care providers, accruing no interest income for the resident during their time in care. When the resident departs care, the lump sum deposit begins to attract interest, providing a benefit to the resident or their estate whilst the lump sum deposit is still held by the provider, and care services are no longer delivered.
https://agedcare.health.gov.au/sites/g/files/net1426/f/documents/07_2017/report_of_the_base_interest_rate_project.pdf
Accommodation refund upon departure from residential aged care
If the resident has paid a refundable accommodation deposit or an accommodation bond for their accommodation costs, approved providers are required to pay interest on the lump sum accommodation deposit for each day following the date of the resident’s departure from the service, until the date the lump sum accommodation deposit is refunded.
Interest is not paid for the day of the resident’s departure, but is payable for each day thereafter, including the date of repayment of the lump sum deposit, at two different rates.
1. The Base Interest Rate (currently 3.75 per cent) is applied to the refund of the balance of a lump sum deposit, until the date the lump sum deposit is actually refunded or the legislated timeframe for repayment expires, whichever is earlier; and
2. If the lump sum balance is not refunded within these timeframes, additional interest at the Maximum Permissible Interest Rate (currently 5.70 per cent) is applied until the lump sum is actually refunded.
There is a legislated timeframe for repaying lump sum accommodation payments. Approved providers are required to refund lump sum accommodation payments within the following timeframes:
· Where the resident passes away, the provider must refund the lump sum payment within 14 days after being shown the probate of the will or letters of administration;
· Where the resident moves to another service and the resident gives:
o more than 14 days of notice, the provider must refund the lump sum payment on the day the resident leaves the service; o notice within 14 days of departing, the provider must refund the lump sum payment within 14 days of the day the resident gave notice;
o no notice before departing, the provider must refund the lump sum payment within 14 days of the day the resident leaves;
· Where the resident leaves the service to return home, the provider must refund the lump sum payment within 14 days after the resident leaves the service;
· Where the service ceases to be certified, the lump sum payment must be refunded within 14 days of the date the service ceased to be certified. The BIR can apply for up to 14 days after the resident’s date of departure, or if the resident has passed away, up until 14 days after the approved provider is shown the probate of the will or letters of administration of the estate.
If the approved provider does not refund the lump sum payment within the legislated timeframes for repayment, the approved provider must pay interest at the Maximum Permissible Interest Rate for the period commencing from the day after the date the lump sum payment should have been refunded, and ending on the day the lump sum payment is repaid .
Allowing providers to request probate or letters of administration before refunding the lump sum balance provides important legal protection to the provider from refunding the lump sum to a person that is not the legal representative of the estate. Providers are not required to wait for probate or letters of administration however, and they may choose to make the refund earlier if they prefer. Providers can face risks in refunding the lump sum balance prior to probate being provided, such as refunding the lump sum to the wrong beneficiary, or in circumstances where the Will of the deceased resident is contested or the resident has died intestate .
The requirement to pay interest on the lump sum deposit from the date following the resident’s departure ensures that the resident or their estate is compensated for the time that the lump sum deposit is held by the provider whilst care is no longer being provided. Whilst providers are required to pay interest on the balance of the lump sum deposit held during this period, the provider is able to earn interest income on the amount owing during the whole time the deposit is held which can be used for service provision. The provider’s ability to earn interest needs to be balanced with the requirement for maintaining sufficient liquidity to enable the provider to repay lump sum accommodation balances as and when they fall due for repayment.
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Wanting Financial advice?
You may want to consult with a financial adviser about your finances. There are various Click here for Government services and resources that can help you obtain appropriate financial advice. It’s a good idea to do some research to see what options work best for you. You can also use Centrelink's free Financial Information Service on 132 300. Log onto humanservices website for a list of their upcoming information talks.
There are 2 ways to book a seminar.
You can email the FIS seminars booking team at least 3 days before the seminar. Don't forget to include:
- the title, date and location of the seminar you want to go to
- your phone number, or contact details, in case the seminar is cancelled
- how you found out about the seminar, such as a newspaper, flyer or Facebook.
14 August 2019
Facing Financial Hardship?
If you believe you would face financial hardship in paying the required fees and payments, you can ask to be considered for financial hardship assistance. Each case is considered on an individual basis.
Depending on your personal situation, you may apply for financial assistance with
- your basic daily fees and means-tested care fees and/or
- your accommodation payment
Assessment of financial hardship assistance claims
https://www.humanservices.gov.au/individuals/forms/sa461
Use this form and guide to test your eligibility to receive financial hardship assistance with your fees and charges in Permanent Residential Aged Care.
18 July 2019
or for more information on fees and charges or financial assistance, call My Aged Care on 1800 200 422 or visit myagedcare.gov.au
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The new Aged Care Quality and Safety Commission began on January 1st, 2019.
Who do the Act and Rules apply to?
- Approved providers of residential aged care services, home care services and short-term restorative care services.
- Service providers of Commonwealth-funded aged care services (this includes Commonwealth Home Support Programme and National Aboriginal and Torres Strait Islander Flexible Care Program (NATSIFACP) services).
What changes can services and providers expect?
The new Rules look quite different due to the combined functions under the Act. However, while the Rules have combined a number of previously separate legislative instruments, the core processes are preserved.
Factsheets & FAQs
Aged Care - Flexible
Aged Care – Home and Community
Aged Care – Residential
Assessing services
If you would like to receive an e-mail when those details are available, you can join our mailing list.
Tuesday, 8 January 2019
It will have a budget of almost $300 million over four years, employing dozens of additional senior compliance officers. The new Commission will immediately absorb the roles of the current Aged Care Complaints Commissioner and the Australian Aged Care Quality Agency and, from January 2020, also take over the Department of Health's aged-care compliance responsibilities.
The next hearing will be held in Adelaide from Monday 18 March. It will focus on home care and the community. The following round, focusing on quality, safety and dementia, will be held in Sydney on 6 May.
Key Changes under the new Commission Act and Rules.
The new commissioners of the Royal Commission in to Aged Care Quality and Safety has written to the nation’s top 100 aged care operators, asking them to self-report on details of their operations. The request for information is the first step in the Royal Commission’s information gathering process. The deadline for providing information is January. Smaller operators will also be contacted, and will be given a later deadline.
The letters mark what will be a huge information-gathering process involving every aged care facility in Australia, and also begins a process of review for all operators of their own individual systems and processes.
08 January 2019
Providers need to be an incorporated entity to be registered with government to receive consumers’ government contributions. In a nutshell, all Commonwealth Home Support Program and home care providers will become ‘care at home’ registered providers. Some examples of registration types referred to in the Roadmap are:
- short-term restorative care
- care co-ordination/case management
- clinical and personal care
- services with an accommodation component; and
- financial services (holding payments in trust).
PM announces $662 million funding package for aged care
As a royal commission into Australia’s aged care industry kicks into gear, the federal government has announced funding for the sector to the tune of $662 million. Prime Minister Scott Morrison on Sunday announced every Australian living in residential aged care will have an extra $1800 spent on their care over the next 18 months, with $320 million set to be rolled out to residential facilities.
The funding package includes:
- $282.4 million for 10,000 home care packages across all levels
- A $320 million general subsidy boost in 2018-19 for residential aged care services
- A $4.2 million mandatory national aged care quality indicator program
- $7.7 million to enhance the safety, quality and integrity of home care
- $35.7 million to increase home care supplements for dementia and cognition and veterans
- A $4.6 million trial of a new residential care funding tool to replace the Aged Care Funding Instrument
- A new $7.4 million business advisory service for both residential and home care providers to help them improve their operations and share best practice.
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What if I am having trouble Coping?
If you need to talk to someone immediately, contact Lifeline (24 hours a day) on 13 11 14.
1 July 2021