What are the $ changes in Residential Care?
Aged care and financial planningLast Updated at December 17th 2021
The costs of aged care services can be difficult to navigate if you’ve never been through the process before, but planning ahead can help you to live a more comfortable life in retirement and feel better prepared for the future.
Residential aged care:
Residential aged care has three main costs - the basic daily fee, means tested care fee and accommodation fee.
The basic daily fee covers the cost of services like food, laundry and cleaning.
The means tested fee is for the cost of your personal and clinical care services, which is charged based on how much you can afford to pay. If you can’t afford it the Government will cover the fee for you.
The accommodation fee is the cost of your room and is different in each home as well as being dependent on the location and size of the room. The accommodation fee can be paid as a refundable lump sum before you move in, a daily payment or a combination of a lump sum and daily payment.
As the daily payments are not refundable, you may want to plan ahead to pay the full cost of the accommodation fee up front.
If you are likely to need high level care as you get older, or you simply like the idea of living in an aged care facility, you should start planning as soon as possible to have the right financial strategies to fund this type of aged care. You may be able to afford to choose luxury type extras if you plan ahead - which are paid for through an extra services fee.
Our nursing home fee estimator can give you a guide to residential aged care costs which you might expect to pay.
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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.servicesaustralia.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 300or DVA on 1800 555 254.
Department of Health
19 February 2020
Nov 02, 2020
HEALTH & CAREROYAL COMMISSION
Proposed laws will show how money is spent in aged care
Proposed new laws seeking to bring in greater financial transparency in the residential aged care sector have been referred to a parliamentary Inquiry.
The Private Member’s Bill, which was introduced by Federal Member for Mayo Rebekha Sharkie, if passed, will require aged care providers to disclose their income, costs of food and medication, staff and staff training, accommodation, administration and monies paid to parent bodies in annual financial transparency reports to the Aged Care Quality and Safety Commissioner.
The Bill has been referred to the Standing Committee on Health, Aged Care and Sport but a date for public submissions has not been set.
BE AWARE
Aged care residents to get extra social leave in pandemic
By: Dallas Bastian in News, Top Stories May 14, 2020
Aged care residents who have decided to leave their home due to the coronavirus pandemic will be covered by a new law that would allow them to take additional leave in extraordinary circumstances. It would allow permanent residential aged care residents to take social leave above their current annual allocation of 52 days in situations like natural disasters or, indeed, pandemics. The bill would cover the additional leave any resident may have taken from 1 April.
Currently, when a resident goes over their social leave entitlement, the aged care home no longer receives the government residential care subsidy for that person, and the provider is able to pass those costs onto the resident or their family.
“This bill ensures that permanent aged-care residents and their families are supported to make decisions about personal safety in emergency situations, and not suffer unnecessary financial burden as a result,” Wyatt said. “It also ensures that, following an emergency, residents are still able to use their social leave entitlement to maintain their normal visiting and special events routine with their families and friends, which is important for emotional and mental health.”
“With the COVID-19 pandemic many family members have made the decision to continue caring for their loved ones in their own home and not to return to the residential aged-care facility to receive this care,” Collins said. “The consumer, the resident or their family, is required to pay the government subsidy of $230 per resident per day to save their place in the residential aged-care facility that they are taking leave from, so that they can go back into that facility when the pandemic is over. “For many families and consumers this is a cost that they’re unable to sustain.”
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How to get help for residential aged care
https://www.servicesaustralia.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.
Read about residential aged care and costs and fees on the My Aged Care website.
11 July 2019
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Since 1 July 2014, the distinction between high level and low level care has been removed, giving everyone the choice to pay their accommodation costs as a lump sum, a daily payment amount or a combination of both. You will also be able to select extra services for an additional daily fee in participating facilities.
The reforms will cover both care in the community (Home Care Packages) and care in an aged care facility.
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The Protection of Residential Aged Care Accommodation Lump Sum Accommodation Payments
29 May 2017
https://www.health.gov.au/health-topics/aged-care?utm_source=health.gov.au&utm_medium=redirect&utm_campaign=digital_transformation&utm_content=agedcare
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
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 Residential Care Fee Estimator for people entering residential care from 1 July 2014 onwards:
https://www.myagedcare.gov.au/fee-estimator
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 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.
The Australian Government pays for the bulk of aged care in Australia. But as with all aged care services, it's expected you'll contribute to the cost of your care if you can afford to do so. You will never be denied the care you need because you can't afford it.
Your aged care fees are reviewed quarterly and become effective each year on:
A Tax Justice Network – Australia Report Commissioned by the Australian Nursing & Midwifery Federation (ANMF)
Tax Avoidance by For-Profit Aged Care Companies:
Profit Shifting on Public Funds Proposals for Transparency on Government Spending
Commissioned by the Australian Nursing & Midwifery Federation (ANMF) With over 268,500 members, the ANMF is the industrial and professional voice for nurses, midwives and assistants in nursing in Australia.
May 2018
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The Government has strengthened the means testing arrangements for people entering residential care since 1 July 2014. It will combine the current income and asset tests to ensure a consistent fees policy. This will address the issue of asset-rich, income-poor residents paying for all of their accommodation and nothing for care, and the income-rich, asset-poor residents paying for their care but not for accommodation.
The treatment of the family home will not change. It will continue to be exempt from the aged care assets test if occupied by a spouse or other protected person. An annual cap of $27,754.52 will apply to a resident's mean tested contribution to their care costs, together with a lifetime cap
of $66,610.90. These amounts will be indexed. The maximum Accommodation Supplement Amount is $57.49.
However, note there has been a Change: 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 since 1 January 2017, new aged care residents who rent out their former home will have the rental income assessed for their income support payments.
* 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) will be removed.
New entrants to residential aged care will have their net rental income from their former home assessed under the aged care means test. For more information about the aged care means test.
10 July 2019
Since 1 January 2017, new aged care residents who rent out their former home will have the rental income assessed for their income support payments.
This change will only impact new entrants to residential aged care from 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. Be aware that since 1 January 2017, new aged care residents who rent out their former home will have the rental income assessed for their 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.
Residential care:
Residents are now able to choose to pay for their cost of accommodation through a Lump Sum (known as a Refundable Accommodation Deposit or RAD), a daily charge (known as a Daily Accommodation Payment or DAP), or a combination of the two.
Refundable Accommodation Deposit (RAD) – a lump sum payment for accommodation in an aged care home. This is the price of a room, in lump sum form, that residents have agreed with their aged care home to pay. Residents can pay their accommodation price in full by RAD or they can pay via combination of a smaller RAD and Daily Accommodation Payment (DAP) or they can pay in full by DAP.
Note: RAD is an exempt asset for pension assessment BUT counts when working out means tested care fee for nursing home fees.
If the residents and their aged care home agree, the resident can ask their provider to deduct certain amounts from the lump sum they already paid – for example for care fees. The RAD, minus any amounts deducted (as agreed), is refunded when the residents leaves the aged care home.
Daily Accommodation Payment (DAP) – the daily payment for accommodation in an aged care home. The aged care facility will work out the DAP based on a legislated formula that converts the RAD price to a DAP price. The resident makes this payment on a regular basis, up to a month in advance, similar to paying rent.
Equivalent Daily Payment = (refundable deposit x maximum permissible interest rate) / 365.
The DAP is not refunded when the resident leaves the aged care home or decides to pay a RAD (see above).
The resident can choose to pay a combination of a RAD and a DAP for their accommodation costs. People moving into an aged care home can be asked to pay:
NOTE:
https://www.health.gov.au/health-topics/aged-care?utm_source=health.gov.au&utm_medium=redirect&utm_campaign=digital_transformation&utm_content=agedcare
10 April 2018
Indexation rates for Residential Aged Care and Home Care Packages and changes to the Maximum Permissible Interest Rate (MPIR)
30 June 2020 Subscriber announcement
An update of the schedules for residential and home care fees and charges, as well as subsidies and supplements will take effect from 1 July 2020.
An update of the schedules for residential and home care fees and charges, as well as subsidies and supplements will take effect from 1 July 2020. This is in line with changes to the age pension and indexation rates.
The new rates are now available on the department's website
The quarterly review of fees and charges conducted by Services Australia, for all care recipients will be effective from 1 July 2020. Care recipients and providers will receive letters letting them know if there is a change to a person's fees and charges or if a refund may be due.
Schedule of fees and charges
View the updated Schedule of Fees and Charges for:
View the updated Schedule of Subsidies and Supplements.
Indexation of residential aged care subsidy has been applied to the 1 July 2019 subsidy rates.
The additional temporary increase to subsidy, homeless and viability supplement paid under the Workforce Continuity Funding from 1 March 2020 remains payable until 31 August 2020.
Decrease to MPIR from 1 July 2020
The MPIR decreases from 4.89% to 4.10% for the period 1 July to 30 September 2020 for:
View current and past refundable deposit balance and accommodation bond balance refund interest rates.
Providers must ensure published accommodation prices are accurate and up to date on:
Q. If a person's assets increase after they have entered care (eg through the sale of the home), can they be asked to pay an accommodation payment if they were previously eligible for government help with their accommodation costs?
A. No. A resident's income and assets at entry determines whether they can be asked to pay an accommodation payment agreed with the aged care home. A person who, at entry, was eligible for some government assistance with their accommodation costs can only be asked to make an accommodation contribution determined by Centrelink (supported by a government accommodation supplement). They cannot later be asked to pay an accommodation payment as agreed with the home in the same facility. If a person's assets or income change after entry it will only be the amount of means tested care fee and accommodation contribution payable which will change, and Centrelink will advise the resident and provider of any change. eg. You go into care and your partner/spouse continues to live in the home as a protected person. However, when perhaps some years later, they also need to go into care/downsize and they sell the house, DHS will count each person of the couple to have half of the $ value of the sale. The value of the assets has changed and each will get a New Means Test (Assets & Income). This will affect the calculation of the nursing home fees for the resident and possibly the Age Pension $ for their partner.
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) will be removed.
Since 1 January 2017, new aged care residents who rent out their former home will have the rental income assessed for their income support payments.
New entrants to residential aged care will have their net rental income from their former home assessed under the aged care means test. For more information about the aged care means test.
10 July 2019
Customers who enter aged care before this date will not be affected. However, since 1 January 2017, new aged care residents who rent out their former home will have the rental income assessed for their income support payments.
Note: 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.
Refundable Accommodation Contribution (RAC) – also a lump sum payment for accommodation in an aged care home, just like a RAD. The difference between a RAC and a RAD is that a RAC is the term used when a person who is receiving Australian Government assistance with their accommodation costs makes a ‘contribution’ towards their accommodation costs (with the Australian Government also making a contribution on their behalf).
RAD is the term used when the person making the lump sum payment is not eligible for Australian Government assistance and is meeting the full costs of their accommodation on their own. The RAC, minus any amounts deducted (as agreed) is refunded when the residents leaves the aged care home – just like a RAD.
Daily Accommodation Contribution (DAC) – the daily contribution for accommodation in an aged care home that residents would need to pay, if they also receive Australian Government assistance with their accommodation costs. Residents make this contribution on a regular basis, up to a month in advance, similar to contributing to rent.
The DAC is not refunded when the resident leaves the aged care home or decides to pay a RAC.
Residents can choose to pay a combination of a RAC and a DAC for their accommodation costs.
*** The rental $ from your home is exempt from the nursing home assessment if your home valued at $350,000 or less. However, when you sell your home the $ is now an Asset for pension and nursing home fees for you BOTH ie if you were already in care and now your wife has gone into care also and the home has been sold, BOTH of your Assets will be reassessed by Centrelink who will inform the nursing home, and possibly YOUR fees will increase.
Note: since 1 January 2017, new aged care residents who rent out their former home will have the rental income assessed for their income support payments.
You might like to read the Department of Health https://www.health.gov.au/health-topics/aged-care
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A basic fee – paid by all people who receive residential care. For some people, this is the only fee they may need to pay. This is calculated at 85 per cent of the single person rate of the basic age pension. This figure is the same for singles and members of a couple. This rate increases on 20 March and 20 September each year in line with changes to the Age Pension. A basic daily fee is used to contribute towards your day-to-day living costs such as meals, cleaning, laundry, heating and cooling. Everyone entering an aged care home can be asked to pay this fee.
https://www.health.gov.au/funnelback/search?query=basic%20daily%20care%20fee
How is the basic daily fee rate worked out?
For new residents, the maximum basic daily fee is 85% of the single person rate of the basic Age Pension.
A means tested care fee - an extra contribution towards the cost of care that residents may need to pay, on top of the basic fee, depending on income and assets.
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
Deeming thresholds and rates from 1 July 2019
Threshold (single) $51,800.
Threshold (couple - combined) $86,200.
Lower rate 1.00% From from 1 July 2019.
Higher rate 3.00%
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.
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 additional services such as hairdressing, or pay TV in rooms is elected.
*** Do note that if you choose, you can opt out of the extra or optional services ie. you opt Not to receive them.
Accommodation payments will be subject to a market price model and aged care facilities will need to publish the market price of their accommodation payments on their website and in their brochures. Click here to search the Aged Care Home Finders.
Search in Your Area and then when the Aged Home of your choice comes up, click on "Costs". Each Aged Care Home lists single room rate, couples room rate and shared room with ensuite... This helps you to compare your options and possibilities.
Note:
What are ‘fixed’ costs?
and that Adjustment payment
Market price RAD’s in excess of $550,000 will need to be approved by the Aged Care Pricing Commissioner, as a Refundable Accommodation Deposit (or its equivalent as a Daily Accommodation Payment of up to $99.72 per day, or a combination of both).
Since 1 July 2014 - if the aged care home is considering charging a price above the $550,000 Refundable Accommodation Deposit threshold, or more than $99.72 per day, then they must make an application to the Commissioner for approval of that price.
Relevant rates and thresholds for refundable deposits and daily payments
- for all new residents from 1 October 2019 - 31 December 2019 4.98%
Maximum rate of interest that may be charged on outstanding amount of daily payment from 1 October 2019 - 31 December 2019 4.98%
Base Interest Rate 3.00%
Maximum 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
To calculate the equivalent daily payment, the refundable deposit is multiplied by the current maximum permissible interest rate (MPIR) and divided by 365 days.
For example, a refundable deposit of $400,000 would have an equivalent daily payment of
Refundable deposit x MPIR = $400,000 x 4.98% = $ 54.57 per day
365 365
An example of a combination payment for a $400,000 price may be a refundable deposit of $200,000 and a daily payment of the remaining $200,000 of:
Balance of price x MPIR = $200,000 x 4.98% = $27.28 per day
365 365
Another example of a combination payment for a $550,000 price may be a combination of a Refundable Accommodation Deposit (RAD) of $450,000 and a Daily Accommodation Payment (DAP) of $13.64 per day, with the Daily Accommodation Payment (DAP) determined as follows:
Balance of price x MPIR = ($550,000 - $450,000) x 4.98% = $13.64 per day
365 365
Relevant rates and thresholds for refundable deposits and daily payments
Maximum Permissible Interest Rate
- for all new residents from 1 October 2019 - 31 December 2019 4.98%
Base Interest Rate 3.00%
Maximum 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
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and Do be aware of those "Additional Costs":
Adjustment payment:
Financial hardship assistance for residential aged care
You may be able to get help if you’re having trouble paying your fees for residential aged care.
https://www.humanservices.gov.au/individuals/services/aged-care-means-tests/how-get-help-residential-aged-care/financial-hardship-assistance-residential-aged-care
Financial hardship assistance for Residential Aged Care form (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.
This PDF is fillable. Download this form and complete it on your device, or print it and complete it by hand.
10 July 2019
For aged care homes, complete and lodge the Financial hardship assistance for residential aged care (SA461) application form with DHS.
Assistance for permanent residential care (aged care homes)
https://www.myagedcare.gov.au/financial-hardship-assistance
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
https://www.myagedcare.gov.au/financial-hardship-assistance
You will not be eligible for financial hardship assistance if you have:
Unrealisable assets
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.
The following assets may be considered unrealisable:
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 percent of the basic age pension amount (or $126.54 per fortnight), you may not be eligible for financial hardship assistance.
Residential care
Essential expenses include, but are not limited to:
******* 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.
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Annual and Lifetime Caps:
Annual and lifetime caps have been set to limit how much a person will need to pay in means tested care fees.
The annual cap is $28,338.71. Once a resident reaches the annual cap, they will no longer have to pay any means tested care fee until the next anniversary of the date they first entered the aged care home. The Australian Government will pay for means tested care fees until the next anniversary.
The Department of Human Services (DHS) will let you and your provider know when the annual cap has been reached.
The lifetime cap is $68,012.98. Once a resident reaches the lifetime cap they will no longer have to pay any means tested care fees. The Government will pay for your care costs.
If a resident was paying an income tested care fee for a Home Care Package before they moved into an aged care home, the amount they have paid in income tested care fees will count towards their lifetime cap.
NOTE: The caps only apply to means tested care fees in residential care and any income tested care fees in home care paid. Residents may still need to pay the basic fee and any accommodation costs.
14 February 2022
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Disclaimer Statement
Aged care and financial planningLast Updated at December 17th 2021
The costs of aged care services can be difficult to navigate if you’ve never been through the process before, but planning ahead can help you to live a more comfortable life in retirement and feel better prepared for the future.
Residential aged care:
Residential aged care has three main costs - the basic daily fee, means tested care fee and accommodation fee.
The basic daily fee covers the cost of services like food, laundry and cleaning.
The means tested fee is for the cost of your personal and clinical care services, which is charged based on how much you can afford to pay. If you can’t afford it the Government will cover the fee for you.
The accommodation fee is the cost of your room and is different in each home as well as being dependent on the location and size of the room. The accommodation fee can be paid as a refundable lump sum before you move in, a daily payment or a combination of a lump sum and daily payment.
As the daily payments are not refundable, you may want to plan ahead to pay the full cost of the accommodation fee up front.
If you are likely to need high level care as you get older, or you simply like the idea of living in an aged care facility, you should start planning as soon as possible to have the right financial strategies to fund this type of aged care. You may be able to afford to choose luxury type extras if you plan ahead - which are paid for through an extra services fee.
Our nursing home fee estimator can give you a guide to residential aged care costs which you might expect to pay.
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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.servicesaustralia.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 300or DVA on 1800 555 254.
Department of Health
19 February 2020
Nov 02, 2020
HEALTH & CAREROYAL COMMISSION
Proposed laws will show how money is spent in aged care
Proposed new laws seeking to bring in greater financial transparency in the residential aged care sector have been referred to a parliamentary Inquiry.
The Private Member’s Bill, which was introduced by Federal Member for Mayo Rebekha Sharkie, if passed, will require aged care providers to disclose their income, costs of food and medication, staff and staff training, accommodation, administration and monies paid to parent bodies in annual financial transparency reports to the Aged Care Quality and Safety Commissioner.
The Bill has been referred to the Standing Committee on Health, Aged Care and Sport but a date for public submissions has not been set.
BE AWARE
Aged care residents to get extra social leave in pandemic
By: Dallas Bastian in News, Top Stories May 14, 2020
Aged care residents who have decided to leave their home due to the coronavirus pandemic will be covered by a new law that would allow them to take additional leave in extraordinary circumstances. It would allow permanent residential aged care residents to take social leave above their current annual allocation of 52 days in situations like natural disasters or, indeed, pandemics. The bill would cover the additional leave any resident may have taken from 1 April.
Currently, when a resident goes over their social leave entitlement, the aged care home no longer receives the government residential care subsidy for that person, and the provider is able to pass those costs onto the resident or their family.
“This bill ensures that permanent aged-care residents and their families are supported to make decisions about personal safety in emergency situations, and not suffer unnecessary financial burden as a result,” Wyatt said. “It also ensures that, following an emergency, residents are still able to use their social leave entitlement to maintain their normal visiting and special events routine with their families and friends, which is important for emotional and mental health.”
“With the COVID-19 pandemic many family members have made the decision to continue caring for their loved ones in their own home and not to return to the residential aged-care facility to receive this care,” Collins said. “The consumer, the resident or their family, is required to pay the government subsidy of $230 per resident per day to save their place in the residential aged-care facility that they are taking leave from, so that they can go back into that facility when the pandemic is over. “For many families and consumers this is a cost that they’re unable to sustain.”
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How to get help for residential aged care
https://www.servicesaustralia.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.
Read about residential aged care and costs and fees on the My Aged Care website.
11 July 2019
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Since 1 July 2014, the distinction between high level and low level care has been removed, giving everyone the choice to pay their accommodation costs as a lump sum, a daily payment amount or a combination of both. You will also be able to select extra services for an additional daily fee in participating facilities.
The reforms will cover both care in the community (Home Care Packages) and care in an aged care facility.
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The Protection of Residential Aged Care Accommodation Lump Sum Accommodation Payments
29 May 2017
https://www.health.gov.au/health-topics/aged-care?utm_source=health.gov.au&utm_medium=redirect&utm_campaign=digital_transformation&utm_content=agedcare
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
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 Residential Care Fee Estimator for people entering residential care from 1 July 2014 onwards:
https://www.myagedcare.gov.au/fee-estimator
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 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.
The Australian Government pays for the bulk of aged care in Australia. But as with all aged care services, it's expected you'll contribute to the cost of your care if you can afford to do so. You will never be denied the care you need because you can't afford it.
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 Tax Justice Network – Australia Report Commissioned by the Australian Nursing & Midwifery Federation (ANMF)
Tax Avoidance by For-Profit Aged Care Companies:
Profit Shifting on Public Funds Proposals for Transparency on Government Spending
Commissioned by the Australian Nursing & Midwifery Federation (ANMF) With over 268,500 members, the ANMF is the industrial and professional voice for nurses, midwives and assistants in nursing in Australia.
May 2018
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The Government has strengthened the means testing arrangements for people entering residential care since 1 July 2014. It will combine the current income and asset tests to ensure a consistent fees policy. This will address the issue of asset-rich, income-poor residents paying for all of their accommodation and nothing for care, and the income-rich, asset-poor residents paying for their care but not for accommodation.
The treatment of the family home will not change. It will continue to be exempt from the aged care assets test if occupied by a spouse or other protected person. An annual cap of $27,754.52 will apply to a resident's mean tested contribution to their care costs, together with a lifetime cap
of $66,610.90. These amounts will be indexed. The maximum Accommodation Supplement Amount is $57.49.
However, note there has been a Change: 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 since 1 January 2017, new aged care residents who rent out their former home will have the rental income assessed for their income support payments.
* 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) will be removed.
New entrants to residential aged care will have their net rental income from their former home assessed under the aged care means test. For more information about the aged care means test.
10 July 2019
Since 1 January 2017, new aged care residents who rent out their former home will have the rental income assessed for their income support payments.
This change will only impact new entrants to residential aged care from 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. Be aware that since 1 January 2017, new aged care residents who rent out their former home will have the rental income assessed for their 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.
Residential care:
Residents are now able to choose to pay for their cost of accommodation through a Lump Sum (known as a Refundable Accommodation Deposit or RAD), a daily charge (known as a Daily Accommodation Payment or DAP), or a combination of the two.
Refundable Accommodation Deposit (RAD) – a lump sum payment for accommodation in an aged care home. This is the price of a room, in lump sum form, that residents have agreed with their aged care home to pay. Residents can pay their accommodation price in full by RAD or they can pay via combination of a smaller RAD and Daily Accommodation Payment (DAP) or they can pay in full by DAP.
Note: RAD is an exempt asset for pension assessment BUT counts when working out means tested care fee for nursing home fees.
If the residents and their aged care home agree, the resident can ask their provider to deduct certain amounts from the lump sum they already paid – for example for care fees. The RAD, minus any amounts deducted (as agreed), is refunded when the residents leaves the aged care home.
Daily Accommodation Payment (DAP) – the daily payment for accommodation in an aged care home. The aged care facility will work out the DAP based on a legislated formula that converts the RAD price to a DAP price. The resident makes this payment on a regular basis, up to a month in advance, similar to paying rent.
Equivalent Daily Payment = (refundable deposit x maximum permissible interest rate) / 365.
The DAP is not refunded when the resident leaves the aged care home or decides to pay a RAD (see above).
The resident can choose to pay a combination of a RAD and a DAP for their accommodation costs. People moving into an aged care home can be asked to pay:
NOTE:
https://www.health.gov.au/health-topics/aged-care?utm_source=health.gov.au&utm_medium=redirect&utm_campaign=digital_transformation&utm_content=agedcare
10 April 2018
Indexation rates for Residential Aged Care and Home Care Packages and changes to the Maximum Permissible Interest Rate (MPIR)
30 June 2020 Subscriber announcement
An update of the schedules for residential and home care fees and charges, as well as subsidies and supplements will take effect from 1 July 2020.
An update of the schedules for residential and home care fees and charges, as well as subsidies and supplements will take effect from 1 July 2020. This is in line with changes to the age pension and indexation rates.
The new rates are now available on the department's website
The quarterly review of fees and charges conducted by Services Australia, for all care recipients will be effective from 1 July 2020. Care recipients and providers will receive letters letting them know if there is a change to a person's fees and charges or if a refund may be due.
Schedule of fees and charges
View the updated Schedule of Fees and Charges for:
- residential and home care recipients who started care on or after 1 July 2014
- aged care home residents who started care before 1 July 2014.
View the updated Schedule of Subsidies and Supplements.
Indexation of residential aged care subsidy has been applied to the 1 July 2019 subsidy rates.
The additional temporary increase to subsidy, homeless and viability supplement paid under the Workforce Continuity Funding from 1 March 2020 remains payable until 31 August 2020.
Decrease to MPIR from 1 July 2020
The MPIR decreases from 4.89% to 4.10% for the period 1 July to 30 September 2020 for:
- refundable deposit balances and accommodation bond balances
- accommodation prices.
View current and past refundable deposit balance and accommodation bond balance refund interest rates.
Providers must ensure published accommodation prices are accurate and up to date on:
- the My Aged Care website. If you have any questions call My Aged Care on 1800 836 799.
- their own website including any relevant written materials.
Q. If a person's assets increase after they have entered care (eg through the sale of the home), can they be asked to pay an accommodation payment if they were previously eligible for government help with their accommodation costs?
A. No. A resident's income and assets at entry determines whether they can be asked to pay an accommodation payment agreed with the aged care home. A person who, at entry, was eligible for some government assistance with their accommodation costs can only be asked to make an accommodation contribution determined by Centrelink (supported by a government accommodation supplement). They cannot later be asked to pay an accommodation payment as agreed with the home in the same facility. If a person's assets or income change after entry it will only be the amount of means tested care fee and accommodation contribution payable which will change, and Centrelink will advise the resident and provider of any change. eg. You go into care and your partner/spouse continues to live in the home as a protected person. However, when perhaps some years later, they also need to go into care/downsize and they sell the house, DHS will count each person of the couple to have half of the $ value of the sale. The value of the assets has changed and each will get a New Means Test (Assets & Income). This will affect the calculation of the nursing home fees for the resident and possibly the Age Pension $ for their partner.
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) will be removed.
Since 1 January 2017, new aged care residents who rent out their former home will have the rental income assessed for their income support payments.
New entrants to residential aged care will have their net rental income from their former home assessed under the aged care means test. For more information about the aged care means test.
10 July 2019
Customers who enter aged care before this date will not be affected. However, since 1 January 2017, new aged care residents who rent out their former home will have the rental income assessed for their income support payments.
Note: 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.
Refundable Accommodation Contribution (RAC) – also a lump sum payment for accommodation in an aged care home, just like a RAD. The difference between a RAC and a RAD is that a RAC is the term used when a person who is receiving Australian Government assistance with their accommodation costs makes a ‘contribution’ towards their accommodation costs (with the Australian Government also making a contribution on their behalf).
RAD is the term used when the person making the lump sum payment is not eligible for Australian Government assistance and is meeting the full costs of their accommodation on their own. The RAC, minus any amounts deducted (as agreed) is refunded when the residents leaves the aged care home – just like a RAD.
Daily Accommodation Contribution (DAC) – the daily contribution for accommodation in an aged care home that residents would need to pay, if they also receive Australian Government assistance with their accommodation costs. Residents make this contribution on a regular basis, up to a month in advance, similar to contributing to rent.
The DAC is not refunded when the resident leaves the aged care home or decides to pay a RAC.
Residents can choose to pay a combination of a RAC and a DAC for their accommodation costs.
*** The rental $ from your home is exempt from the nursing home assessment if your home valued at $350,000 or less. However, when you sell your home the $ is now an Asset for pension and nursing home fees for you BOTH ie if you were already in care and now your wife has gone into care also and the home has been sold, BOTH of your Assets will be reassessed by Centrelink who will inform the nursing home, and possibly YOUR fees will increase.
Note: since 1 January 2017, new aged care residents who rent out their former home will have the rental income assessed for their income support payments.
You might like to read the Department of Health https://www.health.gov.au/health-topics/aged-care
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A basic fee – paid by all people who receive residential care. For some people, this is the only fee they may need to pay. This is calculated at 85 per cent of the single person rate of the basic age pension. This figure is the same for singles and members of a couple. This rate increases on 20 March and 20 September each year in line with changes to the Age Pension. A basic daily fee is used to contribute towards your day-to-day living costs such as meals, cleaning, laundry, heating and cooling. Everyone entering an aged care home can be asked to pay this fee.
https://www.health.gov.au/funnelback/search?query=basic%20daily%20care%20fee
How is the basic daily fee rate worked out?
For new residents, the maximum basic daily fee is 85% of the single person rate of the basic Age Pension.
A means tested care fee - an extra contribution towards the cost of care that residents may need to pay, on top of the basic fee, depending on income and assets.
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
Deeming thresholds and rates from 1 July 2019
Threshold (single) $51,800.
Threshold (couple - combined) $86,200.
Lower rate 1.00% From from 1 July 2019.
Higher rate 3.00%
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.
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 additional services such as hairdressing, or pay TV in rooms is elected.
*** Do note that if you choose, you can opt out of the extra or optional services ie. you opt Not to receive them.
Accommodation payments will be subject to a market price model and aged care facilities will need to publish the market price of their accommodation payments on their website and in their brochures. Click here to search the Aged Care Home Finders.
Search in Your Area and then when the Aged Home of your choice comes up, click on "Costs". Each Aged Care Home lists single room rate, couples room rate and shared room with ensuite... This helps you to compare your options and possibilities.
Note:
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
Market price RAD’s in excess of $550,000 will need to be approved by the Aged Care Pricing Commissioner, as a Refundable Accommodation Deposit (or its equivalent as a Daily Accommodation Payment of up to $99.72 per day, or a combination of both).
Since 1 July 2014 - if the aged care home is considering charging a price above the $550,000 Refundable Accommodation Deposit threshold, or more than $99.72 per day, then they must make an application to the Commissioner for approval of that price.
Relevant rates and thresholds for refundable deposits and daily payments
- for all new residents from 1 October 2019 - 31 December 2019 4.98%
Maximum rate of interest that may be charged on outstanding amount of daily payment from 1 October 2019 - 31 December 2019 4.98%
Base Interest Rate 3.00%
Maximum 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
To calculate the equivalent daily payment, the refundable deposit is multiplied by the current maximum permissible interest rate (MPIR) and divided by 365 days.
For example, a refundable deposit of $400,000 would have an equivalent daily payment of
Refundable deposit x MPIR = $400,000 x 4.98% = $ 54.57 per day
365 365
An example of a combination payment for a $400,000 price may be a refundable deposit of $200,000 and a daily payment of the remaining $200,000 of:
Balance of price x MPIR = $200,000 x 4.98% = $27.28 per day
365 365
Another example of a combination payment for a $550,000 price may be a combination of a Refundable Accommodation Deposit (RAD) of $450,000 and a Daily Accommodation Payment (DAP) of $13.64 per day, with the Daily Accommodation Payment (DAP) determined as follows:
Balance of price x MPIR = ($550,000 - $450,000) x 4.98% = $13.64 per day
365 365
Relevant rates and thresholds for refundable deposits and daily payments
Maximum Permissible Interest Rate
- for all new residents from 1 October 2019 - 31 December 2019 4.98%
Base Interest Rate 3.00%
Maximum 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
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and Do be aware of those "Additional Costs":
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
Financial hardship assistance for residential aged care
You may be able to get help if you’re having trouble paying your fees for residential aged care.
https://www.humanservices.gov.au/individuals/services/aged-care-means-tests/how-get-help-residential-aged-care/financial-hardship-assistance-residential-aged-care
Financial hardship assistance for Residential Aged Care form (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.
This PDF is fillable. Download this form and complete it on your device, or print it and complete it by hand.
10 July 2019
For aged care homes, complete and lodge the Financial hardship assistance for residential aged care (SA461) application form with DHS.
Assistance for permanent residential care (aged care homes)
https://www.myagedcare.gov.au/financial-hardship-assistance
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
https://www.myagedcare.gov.au/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 (SA457) form (for permanent residential care) with the Department of Human Services (DHS) or the Department of Veterans’ Affairs
- assets (unless they are unrealisable assets) valued at more than $36,121.80
- gifted:
- more than $10,000 in the previous 12 months, or
- more than $30,000 in the previous 5 years.
Unrealisable assets
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.
The following assets may be considered unrealisable:
- a house that has been on the market for 6 months or more
- jointly owned property
- gifting where the decision to gift was made when the person was incapacitated or was made by a Power of Attorney
- frozen assets.
- rented properties
- private trusts and private companies.
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 percent of the basic age pension amount (or $126.54 per fortnight), 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.
- 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.
******* 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.
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Annual and Lifetime Caps:
Annual and lifetime caps have been set to limit how much a person will need to pay in means tested care fees.
The annual cap is $28,338.71. Once a resident reaches the annual cap, they will no longer have to pay any means tested care fee until the next anniversary of the date they first entered the aged care home. The Australian Government will pay for means tested care fees until the next anniversary.
The Department of Human Services (DHS) will let you and your provider know when the annual cap has been reached.
The lifetime cap is $68,012.98. Once a resident reaches the lifetime cap they will no longer have to pay any means tested care fees. The Government will pay for your care costs.
If a resident was paying an income tested care fee for a Home Care Package before they moved into an aged care home, the amount they have paid in income tested care fees will count towards their lifetime cap.
NOTE: The caps only apply to means tested care fees in residential care and any income tested care fees in home care paid. Residents may still need to pay the basic fee and any accommodation costs.
14 February 2022
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Disclaimer Statement
- The information provided in this document is general in nature and is not financial advice. It does not take into account a person's particular financial circumstances or needs. While all care has been taken in the preparation of this document we accept no liability for errors or omissions. The information is subject to change without notice.
- It is recommended that you consult a financial adviser who specializes in the field of Aged Care whose advice takes into account your particular financial circumstances and needs.